Wendong Zhang. (ISU photo.)

A survey finds Iowa had the highest cash rent average for cropland this year at $233 dollars an acre, $3 an acre higher than last year.

Farmers across the country are paying an average of $141 per acre to rent cropland. That’s up $2 from last year. Iowa State University Extension ag economist Wendong Zhang says cash rents closely follow farmland values.

“Iowa has seen about 20% growth, evidenced by many of the auction prices as well as the expert opinion survey,” Zhang says. “Iowa land values have shown about 18% growth from last July to July 1st of this year.” He says having cash rents follow farmland values is supported by their recent survey of farm managers and ag lenders.

“Typically, the cash rent to land value ratio, regardless of the change over the past decade, people have all anticipated this to be around 3.1%,” Zhang says. “In general, when the land markets goes up, then land prices goes up, then the cash rent typically tracks that as well.”

Zhang expects the farmland values and cash rents to remain high. “In the near future, we will likely see this level of high land value, high cash rent to stay because the interest rate is still fairly low,” Zhang says. “Even though we have seen some increase in supply, in general, it’s still limited due to COVID payments and other things.”

Of the top five states, Iowa had the highest cash rent average followed by Illinois, Indiana, Nebraska and Minnesota.

(By Jerry Oster, WNAX, Yankton)