Farmland rental rates fall 5 percent

Low crop prices and small-to-negative margins forecast for this year's corn and soybean crops have led to a second straight year of declining average estimated farmland cash rents in Iowa.

Iowa State University Extension's annual survey of landowners, lenders and professional farm managers found average rents were lower in all nine crop reporting districts.

'The average estimated cash rent for corn and soybean land in the state for 2015 was $246 per acre, a decrease of $14 per acre or nearly 5 percent from last year,” said Alejandro Plastina, ISU assistant professor and extension economist.

This is the second consecutive year of declining rates after 15 consecutive years of increasing rental rates, accumulating a 9 percent loss since 2013.

'It isn't a trend yet, but it certainly is a reversal of the trend we've seen of land rental rate increases,” Plastina said. 'Land rates and other input costs take time to adjust to lower levels of crop revenue. If corn and soybean prices don't improve soon, we can expect land rental rates to continue to decline.”

The largest declines in land rental rates occurred in central Iowa ($24 per acre) and west central Iowa ($23 per acre). Northeast Iowa reported the highest average in 2015 at $273 per acre, and the lowest district value was $187 in south central Iowa.

Linn County's overall average cash rental rate was $271 per acre in 2015, down from $280 per acre in 2014. The average cash rental rate in Johnson County was $234 per acre in 2015, down from $249 per acre in 2014.

Responding to the low crop prices forecast for this season, the Cedar Rapids Airport Commission earlier this year reduced the cash rent from $400 per acre to $380, or 5 percent, for farmers who lease land owned by The Eastern Iowa Airport. The municipally-owned airport is one of the largest farmland owners in Linn County with more than 2,000 acres leased to five farmers for the production of corn and soybeans.