There's no simple or easy way of arriving at the right farmland rental rate, experts say.
"It's more art than science. There's no formula you plug numbers into," says Gary Hachfeld, extension educator in agricultural business management with the University of Minnesota.
But he offers these suggestions for landlords:
- If the lease is up and the rental rate hasn't risen in the past two years, it's probably time for an increase.
- Consider giving a below-market-average price to a farmer who takes care of the land and does things the right way.
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- Consider giving a below-market-average price to a tenant, possibly a family member, who helps the landlord with jobs such as blowing snow.
- Check county farmland rental surveys. Consider talking with an agricultural banker in your area.
"The bottom line is, it (the farmland) is worth what you can get for it. The way to find that out is to put it out for bids," Hachfeld says.
However, landlords with a long relationship with a tenant may not want to do that, he says.
