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Cash rents keeping up with values, one survey shows
Farm land prices have gotten a lot of attention lately, namely the around one-quarter gains in value over the last year in states like Iowa and Nebraska. It's spawned questions about land rental rates, namely cash rent. Is it keeping up?
The results of one recent survey show yes. Though the lower end of the cash rent increase range over the last year is a ways off the overall pace in land value gains in Nebraska, the higher end is closer, according to the 2011 version of the University of Nebraska (UNL) Farm Real Estate market Developments survey, the results of which were released late last week.
Overall, cash rental rates have risen between 13% and 25% over the last year in that state, according to the results of the survey of farm land owners, buyers and renters led by UNL ag economist Bruce Johnson. That's alongside general farm land values that have risen 22% in the last year.
"Given current commodity price levels and the likelihood of record shattering income levels for the crop sector this year, these significant cash rental rate increases look to be not only economically justified, but even conservative," says Johnson in a recent report on the survey's findings.