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2014 Cropland Lease Arrangements In Nebraska

May 12, 2015

By Jim Jansen
Extension Educator in Cedar and Knox Counties

By Roger Wilson
Extension Budget Analyst and Farm Management Specialist

Figure 1. Nebraska land rental arrangements with grain storage included as part of the lease.

As part of the Nebraska Farm Real Estate Market Survey, each year panel members are surveyed on new or emerging issues related to the agricultural land market in Nebraska. The special feature recently published as part of Nebraska Farm Real Estate Market Highlights 2013-2014 report evaluated the types of contractual rental arrangements used in Nebraska to lease agricultural land along with the availability of grain storage as part of the agreement.

Panel members were asked to estimate the percent of each style of cropland lease arrangement in their area including:

  • Crop Share: landowner receives percentage of actual crop yield as payment for leasing the agricultural land to tenant. Landowner may share input and production costs of raising the crop.
  • Cash Lease: landowner receives an agreed upon cash payment amount for leasing the agricultural land to the tenant.
  • Cash Lease with Flexible Provisions: landowner and tenant set a base cash rental rate which can flex upon actual crop yields, prices, or a combination of the two. Final cash payment made to the landlord for leasing the agricultural land to the tenant may have premiums or discounts made to the base rate depending upon the agreements set up by the two parties.

Land lease arrangements for 2014 varied widely across Nebraska. On average use was divided among cash lease (48%), crop share (41%) and cash lease with flexible provisions (11%).

The Northwest District had the highest rate of crop share leases at 74% percent while the Northeast District had the highest rate of cash leases and cash leases with flexible provisions at 68% and 14%, respectively. Survey panel members indicated that use of the different types of leases across the state correlated to the primary types of crops historically raised in a district and their yield expectations.

Table 1. Land Lease Arrangements of 2014 Rental Transactions, by Agricultural Statistics District in Nebraska

Average Percent Distribution Cash Lease

Crop
Share

Cash
Lease

Cash Lease
w/Flexible Provisions

 - - - - - Percent - - - - -

Northwest

74

20

6

 

North

39

52

9

 

Northeast

19

68

14

 

Central

33

56

11

 

East

43

46

12

 

Southwest

34

58

9

 

South

49

43

8

 

Southeast

46

44

11

 

State

41

48

11

 

Source: UNL Nebraska Farm Real Estate Market Survey, 2014.