Iowa Land Rental Prices Up
An authoritative annual survey of cash rental rates for Iowa farmland, a bellwether for the national market, shows cost per acre have increased, but by no more than the rate of inflation. However, farmland rental prices for the lower quality land are up the fastest, suggesting someone has found a way to make use of low-grade farmland.
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This is the fourth successive year of relatively stable rates at levels around 18% lower than the historical peak reached in 2013 at $270 per acre. The survey was carried out in early spring so the effect of the lockdown may yet change results later in the year.
In comparison, corn and soybean prices received by farmers in Iowa declined by 49% and 45%, respectively, since mid-2013. So the underlying value of the land could be said to have increased, while yields per acre are falling in cash terms.
The 2020 Iowa cash rental rate survey was conducted this spring by Iowa State University. Iowans supplied 1,592 responses, reporting typical cash rental rates in their counties for land producing corn, soybeans, hay, oats and pasture. Of these responses, 43% came from farmers, 32% from landowners, 13% from professional farm managers and real estate agents, 6% from agricultural lenders, and 6% from other professions and respondents who chose not to report their status. Respondents indicated being familiar with a total of 1.6 million cash-rented acres across the state.
Different regions experienced different changes in cash rents: from a 4.6% increase in Crop Reporting District (CRD) 3 to a 2.4% drop in CRD 9. Northern and central Iowa (CRD 1 to 6) have, on average, 21% higher cash rents than southern Iowa (CRD 7 to 9). The chart accompanying this article compares the results for 2020.
Results available by county
The survey compares farmland rental prices for each district by the quality of land — high, medium and low. Not all land qualities have seen their average cash rents increase proportionately. Looking at statewide averages, high-quality land experienced a 0.4% increase, from $256 per acre in 2019 to $257 in 2020. Medium-quality land experienced a 1.4% increase, from $220 per acre in 2019 to $223 in 2020. Low-quality land experienced a 2.7% increase, from $183 per acre in 2018 to $188 in 2020.
Average cash rents in Iowa, in $ per acre (nominal)
Detailed results by county and crop are provided on the ISU Ag Decision Maker article Cash Rental Rates for Iowa 2020 Survey, C2-10. There was considerable variability across counties in year-to-year changes, as is typical of survey data, but 59 counties experienced increases in average rents for corn and soybeans. The report also shows typical rents for alfalfa, grass hay, oats, pasture, cornstalk grazing and hunting rights in each district.
Some renegotiations expected
Federal government payments from the Market Facilitation Program and expectations of higher …
