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Farmland rent roundup

Jeff Caldwell 08/01/2013 @ 1:07pm Multimedia Editor for Agriculture.com and Successful Farming magazine.

If you're renting farmland, a critical time of year is beginning -- the time when lease terms are nailed down for the next crop year. This year, the crystal ball is a little foggier than normal, though with many expectations for lower crop incomes based on lower grain prices, some experts say the land rent market, for the first time in decades, could be poised for a downturn.

What do you think? Do you anticipate lower cash rental rates heading into next year?


The latest land rent news and features

Crop budgets may signal lower land rents

One economist is calling for lower crop incomes based on continued strong input costs -- both land and nonland -- and an expected drop in grain prices. That may signal a shift away from a decades-long trend in cash land rental rates.

 

Normal weather, lower grain incomes

Certainly the weather has been a lot more friendly, in general, than it was a year ago in much of corn and soybean country. That's the main driver behind expectations for a dip in grain farm incomes once it's all said and done for 2013.


Will land follow the grains lower?

With such a grain price and farm income projection, it signals lower cash rents. But is it happening? Many farmers say price projections like these are just part of the equation. Another big element -- one that's also very much in flux right now -- is farm policy and what kind of revenue guarantees farmers can glean from utilizing federal crop revenue insurance products.

 

Returns and land rents given lower grain prices

The U.S. Department of Agriculture recently updated its World Agricultural Supply and Demand Estimates (WASDE), with the midpoints of 2013/2014 price estimates at $4.80 per bushel for corn and $10.75 per bushel for soybeans. These prices are significantly below prices in recent years, suggesting that agricultural returns may be lower in 2013 and 2014.



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