Home Nation/World Profit Center

Farmland cash rents mixed in region

Rents are impacted by property values, but can vary from one year to the next based on changes in crop rotations, rainfall totals, commodity prices and other factors.

By Brad Carlson

Published on August 10, 2018 10:30AM

A field near Nampa, Idaho, is planted to seed peas. Farmland cash rents have been up this year in Oregon and Washington, and mostly flat in Idaho, the USDA National Agricultural Statistics Service reported in early August.

Sean Ellis/Capital Press

A field near Nampa, Idaho, is planted to seed peas. Farmland cash rents have been up this year in Oregon and Washington, and mostly flat in Idaho, the USDA National Agricultural Statistics Service reported in early August.

Buy this photo

Capital Press

Farmland cash rents have been up this year in Oregon and Washington, and mostly flat in Idaho, the USDA National Agricultural Statistics Service reported in early August.

Drew Eggers, a farmer in Meridian, Idaho, said the rents he pays are in line with his state’s averages. He doesn’t expect much change as he starts to arrange leases for next year.

“Lately, with commodity prices softening, landlords haven’t felt like they want to raise the rent — unlike six or seven years ago when the commodity prices were stronger and farmers had better income off their crops,” he said. “Landlords felt like they ought to share in that and take advantage of increases in the prices of the crops.”

Eggers leases ground for three or more years, or for a year with a renewal option. He grows mint, a crop he said is suited to a multi-year lease since it is a perennial that is not planted every year and comes with much of its input cost up front.

“Now I run into land that maybe will sell and go out of ag,” he said. “So I also even have buyout clauses in mint leases.” Such buyout or “make-whole” clauses could come into play where a mint crop is somewhere in the middle of a three- to five-year growing cycle, he said.

NASS said Idaho cropland overall this year rented for $160 per acre for the full growing season, unchanged from 2017. Cash rent for irrigated cropland rose a dollar to $216. Non-irrigated cropland rented for $56 per acre, down $2. Pasture rents dropped by an average of a dollar to $11.

Eggers said he does not lease for a “growing season” timeframe, which can come into play for statistical reporting purposes to reflect leases that expire immediately after harvest.

From 2017 to this year, NASS said, Oregon cash rents went from $152 to $159 for all cropland, irrigated cropland increased by $10 to $215, non-irrigated cropland rose $3 to $93, and pasture rents rose by a dollar to $12. After falling in 2015 and ’16, all-cropland and irrigated cropland rents in Oregon increased last year and this year.

In Washington from 2017 to this year, cash rents went from $198 to $203 for cropland overall, $350 to $358 for irrigated cropland, and $73 to $75 for non-irrigated cropland, NASS said. A pasture rent comparison was not listed.

Christopher Mertz, Washington-based NASS director for the Northwest, said that in addition to traditional drivers of demand, cash rents can vary from one year to the next based on changes in crop rotations, rainfall totals, hay prices and other factors.

Changes in cash rent can follow changes in farm real estate values but do not do so always, he said. For example, as Idaho all-cropland rents went unchanged from a year ago, all-cropland real estate values increased by 3.5 percent.

All-cropland real estate values from 2017 to 2018 went up by 2.4 percent and 1 percent in Oregon and Washington, respectively.



Marketplace

Share and Discuss

Guidelines

User Comments