Farmland rental prices in the Northwest changed significantly from 2020 to 2021.
In Oregon, Washington and Idaho, according to a USDA report released Monday, irrigated cropland is more expensive to rent in 2021 compared to last year, which experts attribute to high specialty crop prices and demand for land with water rights.
However, rental prices for non-irrigated cropland have stagnated or decreased due to drought and poor dryland crop yields. Pastureland rental costs have changed little.
Most farmers say they prefer flat or falling rental rates.
“Just personally, from what I’m hearing, with the margin of profit as narrow as it is, any time any expense goes up, that’s going to impact (farmers) negatively,” said Randy Welk, USDA’s state statistician for Idaho.
According to USDA’s 2021 cash rent report, Oregon producers on average paid $181 per acre to rent cropland this year, $21 more per acre than in 2020 — a 13% increase.
Irrigated Oregon cropland is $245 per acre, up $25 from 2020. The rental price of non-irrigated cropland, in contrast, went down $5, from $80 to $75 per acre.
Dave Losh, USDA state statistician for Oregon, said demand for irrigated cropland on the west side of the state appears to be pushing this year’s irrigated cropland prices up.
“I think the demand for land in the Willamette Valley is really driving the price,” he said.
Rental prices per acre exceed state averages in some agritourism and specialty crop regions, including Hood River, where prices this year are $717 per acre.
The contrasting drop in rental costs for non-irrigated cropland can be attributed in part to low-yield expectations for dryland crops.
“I think drought plays a part in it, too,” said Losh.
According to the University of Nebraska’s Center for Agricultural Profitability, drought can hold down the price of non-irrigated cropland, which relies on rainfall.
In Washington, the average cropland rental expense is $222 per acre for 2021, up $15 — or a 7% increase — from 2020.
Irrigated Washington cropland, estimated at $395 per acre this year, is up $5. Non-irrigated cropland, in contrast, is down $5 from $80 per acre last year to $75 this year.
In Idaho, cash rent expenses for all cropland are at $180 per acre, up $9 per acre from 2020. Irrigated cropland is up $11 per acre in price this year, at $236, while non-irrigated cropland rental, at $63 per acre, is up $1 per acre from last year.
“(Higher prices are) not a surprise,” said Sean Ellis, Idaho Farm Bureau Federation spokesman. “It’s not welcome news, but it’s not a surprise either.”
As with Oregon, experts say drought, markets and demand for irrigated farmland have impacted rental price changes in Washington and Idaho.
This year’s pasture cash rent expense in Idaho is estimated at $13 per acre, up $1 from 2020.
Washington producers are paying $8 per acre for pasture rent, unchanged from 2020.
Oregon has seen a decrease in pasture rental costs: from $15 per acre in 2020 to $11 per acre in 2021. Losh, of USDA, said this can likely be attributed to a decrease in the number of dairy cows and dairy farms in Oregon along with drought making pastures less productive.