According to a new Iowa State University survey, the cost to rent farmland in Iowa this year increased to a 10-year high as a result of growing land values and recent solid farm revenue.
According to the report issued on Friday, the average agricultural rent increased 9% to $279 per acre this year. That broke the previous record, which was $270 per acre, set in 2013.
The prolonged drought that Iowa and other regions were experiencing at the time caused corn and soybean prices to reach record highs. According to numbers not adjusted for inflation, Iowa corn prices are 2.8% higher than in 2013 while soybean prices are 4.4% lower, according to ISU.
Alejandro Plastina, an economist with ISU Extension, anticipates a fall in farmland rents despite this year’s record.
Plastina said in an analysis of the poll data that “lower projected crop prices, along with sustained input inflation in 2024, would result in lower net farm income and put downward pressure on cash rents.”
As rents rise, farm income expected to fall
Despite an increase in farm income over the previous two years, the U.S. Department of Agriculture predicted in February that farmers will likely experience a 16% loss in income this year due to lower prices for the majority of crops and livestock.
For owners of farmland, however, this year brought significant rises in rental prices. According to ISU, just eight of Iowa’s 99 counties—Des Moines, Jefferson, Lucas, Muscatine, Van Buren, Wapello, Warren, and Woodbury—saw a fall in population.
According to ISU, the ability of the land to generate maize and soybeans affects the rent for agricultural land. Low-quality land now rents for 6% more at $230 per acre, medium-quality land for 8.6% more at $277 per acre, and high-quality land for 11.1% more at $330 per acre.
Farmers in Iowa went out to the fields despite record-high production costs and falling corn and soybean prices.
According to experts, farmers will undoubtedly feel the pinch this year as crop costs rise and the prices of corn and soybeans, Iowa’s two most important commodities, decrease. Rising loan rates, as well as increased expenses for land, chemicals, fertilizer, and seeds, are predicted to produce a 20% increase in production costs.
Farmland prices in Iowa increased 17% in 2017 to around $11,400 per acre over 2021.
See how farmland rents are faring in your Iowa county.
The study was done by Plastina and Ann M. Johanns, a program specialist for the ISU Extension, and it is based on 1,306 relevant responses about the typical cash rental rates in Iowa counties for property used for pasture, hay, oats, and maize and soybean production.
42% of the responses came from farmers, 37% from landowners, 9% from realtors and professional farm managers, 7% from agricultural lenders, and 5% from people who did not specify their occupation or status.