Farmers and landlords have a new resource to help them determine farmland rental rates.
The U.S. government has released county-level statistics of per-acre cash rental rates for irrigated farmland, nonirrigated farmland and pasture in 2014. The statistics complement the state-level cash rental rates released previously by the National Agricultural Statistics Service, an arm of the U.S. Department of Agriculture.
The county-level statistics, in particular, can be useful in determining what renters should pay for farmland. Typically, landlords and renters begin thinking about rental rates for the next crop season soon after harvest.
In determining rental rates, it's important to "have an understanding of what the going rates are in your area," says Kim Dillivan, crops business management field specialist with South Dakota State University Extension Service.
Landlords and would-be renters have several potential sources of information, including other landlords and producers, ag lenders, Farm Service Agency employees and ag real estate agents, he says.
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Some state extension services, including South Dakota's, have information on rental rents, too.
Though useful, the annual NASS county-level data has limitations, Dillivan says.
The county-level statistics are only averages, which can obscure big differences in rates across a county. So, landlords and farmers shouldn't base their rental rates solely on the newly released statistics, he says.
Landlords might consider basing their rental rates on land values -- i.e., charging a percentage of what the land is valued at per acre, Dillivan says.
Agricultural economists also suggest farmers and landlords consider a flexible payment, or one based on how well the farmer does financially that growing season, instead of a fixed amount of cash per acre.
The state-level rental rate survey issued previously found cash rental rates continued to rise in 2014, despite the downturn in crop prices.
The newly released county-level survey also found generally higher rates. For instance, the average rental rate for nonirrigated cropland in North Dakota's Burleigh County rose from $51.50 per acre in 2013 to $52 per acre in 2014.
Information in the NASS report comes from more than 200,000 ag producers nationwide. Congress directed NASS to collect the information to help farmers and ag officials make better decisions.
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For more information, look for "quick stats" at www.nass.usda . gov.
