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CASH RENTS EXPECTED TO BE EVEN WITH LAST YEAR
Nov. 27, 2013
BrownfieldAgNews reports:
It's that time of year when landowners and tenants sit down to renew or update their farm land rental agreements.
So, in light of much lower commodity prices this fall, will those rental rates be coming down? Jim Farrell of Farmers National Company doesn't see that happening.
"If last year's lease was at the market, then what we're seeing right now is a market that's steady going into 2014," Farrell says. "So we really haven't seen any backing up on cash rents or lease terms on share crops, and that sort of thing."
Iowa State University Extension farm management specialist Melissa O'Rourke says that while most rental agreements have increased in recent years, she also sees many situations where rental rates are "far too low" considering the value of the land and the recent profitability in farming. But for many landowners, O'Rourke says, it's about more than just dollars-and-cents.
"Most land owners aren't saying, 'I'm trying to get every last dollar out of this land, in terms of cash rent, that I can'," says O'Rourke. "Other factors are important to them-stewardship, how the land is cared for, just the legacy of the land-that is important in a lot of those families."
Another factor supporting rental rates in many areas is the continued strong demand for farmland from local farmers.
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