USDA Average County Rents Published In September

By David Bau

The National Agricultural Statistic Service with the USDA released the county farmland rental rate estimates for 2016.  After increasing continuously since 2007, statewide average rents went down for the second year in a row. The state average cropland rental rates declined from $185 in 2014 to $180 in 2015 to $170 in 2016 as indicated in Chart 1 below. This represented a 5.5% decrease from 2015 to 2016 and 2.7% decrease from 2014 to 2015.  Previously rental rates had a 4.5% increase from 2013 to 2014, 18% from 2012 to 2013 and 11.1% from 2011 to 2012. Statewide Irrigated rental rates declined from $210 in 2015 to $185 in 2016 almost a 12% drop. Pasture rent average increased from $26 per acre in 2014 to $28 per acre in 2015 to $30 in 2016 or an increase of 7.1%.

 Table 1 below lists the actual farmland rental rates by county from Adult Farm Management Records. Since farmers and landlords are starting to negotiate 2017 farmland rental rates and the last actual numbers available are for 2015, I have listed estimated rental figures for 2016 and 2017.  For 2016 I heard many times, that rents were down $20 to $25 per acre, although some rents went up and some remained the same.  In Table 1 below, I estimated a 10% decline in 2016 from 2015. What direction should 2017 farmland rental rates go? In the table is an estimated 7% decline in rental rates from 2016 to 2017 due the continued decline in corn prices.

The column third from the right in bold is the latest 2016 USDA county estimate.  Property taxes continue to increase while profits are being squeezed by low commodity prices. It will be a very challenging year for both the landlord and farmer to determine where the 2017 farmland rental rate should be? Up? Down? or Constant?

Source:umn.edu