ISU Extension economist Ann Johanns says cash rents seem to be following land values instead of expected farm profitability.
“I think it will surprise people that it’s gone up…with these lower grain prices,” Johanns said. “But, just because the survey went up doesn’t mean every rental agreement in the state went up.” A little more than half of the farmland in Iowa is rented. This year, the average statewide rental rate is $222 per acre, an increase of just 1.4 percent over last year.
“The last six months to a year, land value prices have stabilized in other surveys and so we kind of expected rents to be stable to slightly lower. It did come out, statewide, to be just a few dollars higher. It was the first increase since 2013,” Johanns said. The survey shows the highest average cash rent in Grundy County at $290 per acre. The lowest rental rate is in Clarke County at $126.
“Grundy County has higher quality soils, higher yields, and a larger percentage of rented acres. Whereas, Clarke County…we don’t have as much rented acres in that south-central area,” Johanns said. Average rental rates increased in all regions of Iowa except the south-central and southeast regions. Statewide, Iowa farmland rental rates peaked in 2013 at $270 per acre. Since then, they’ve dropped by just under 18-percent. The survey notes, over the same time period, corn and soybean prices received by Iowa farmers declined by 52 and 37-percent, respectively.