Leasing Firm's Survey Shows Farmland Rent Has Really Jumped

Leasing Firm's Survey Shows Farmland Rent Has Really Jumped

Midwest cropland is being leased to tenant operators for an average of $351 per acre in 2011, according to an analysis of 22 leases by an online leasing firm.

Midwest farmland is being leased to tenant operators for an average of $351 per acre in 2011, according to results released June 29 by US Farm Lease of Ames, Iowa. US Farm Lease is an on-line farm leasing company linking farm owners with potential tenants.

This latest increase represents a 54% jump in land rental rates from September 2010 to March 2011. The findings are based on an analysis of 22 leases in Iowa, Missouri and Nebraska.

According to Mark Gannon, president of US Farm Lease, "Lease rates increased from fall 2010 to spring 2011 due to a rise in commodity prices and crop insurance guarantees. In addition, farm operators are hungry for land and are willing to provide any reasonable considerations that benefit the owner."

Here is a summary of the US Farm Lease findings:

Average Agreed Rental Rate               $351/acre

Average High Bid                                 $356/acre

Average Size of Farm Offering             198 Acres

Average Increase in Rental Rate/farm      54%

The jump in the per-acre lease rate also reflects the fact that most landowners have been severely under the market in the rental rates they have been receiving for their land, he says. "Most landowners have very little knowledge about farm commodity prices, input costs, government programs or federal crop insurance ramifications. We give the landowner options for tenants who will pay a fair rent and offer the terms and conditions in the lease necessary to preserve the land."

The lease rate increase shows that landowners can adjust their profitability and also require better records on fertility, yield history, drainage and other pertinent data, he adds. "Many farms have land use considerations that should be specifically spelled out in a lease to properly care for their land."

US Farm Lease was founded in 2008 as an on-line tool to link landowners with tenants. More than 300 landowners and 1,000 operators from eight states are registered with US Farm Lease. For more information visit www.usfarmlease.com or call 888-233-4002.

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