LANDOWNER RESOURCES_Land Value Surveys

Cash Rent Data

2021 Cash Rent Survey Reports

 

Every land parcel has unique characteristics and should be evaluated on an individual basis. Still, opinion surveys can be useful for discerning trends. Farmland Investor Letter offers exclusive analysis of USDA's 2021 survey of 280,000 active farmers who use their best professional judgment to determine average county cash rental rates for non-irrigated cropland, irrigated cropland and pastureland. Farmers who participate in this survey are in a unique position to offer insights on local market conditions.

Our data set includes cash rents on a county-by-county basis for every state, except Alaska. Data is omitted for some land classes in those counties where an insufficient amount of a specific land type exists to provide a reasonable estimate. Individual state reports are available in PDF-format sent via email.

All Cash Rent Survey Reports include our in-depth 2021/22 Rent Report User Guide and Lease Practices Update.

This 11-page bonus report includes an overview of four commonly used metrics for establishing cash rent rates, which can serve as useful tools to help ensure your lease rate is aligned with historical relationships to farm productivity and crop revenue. In addition, we offer our latest look at key lease provisions such as soil fertility maintenance requirements, rent payment dates, lease length (number of years), the importance of farm production reports, late charges and lease termination clauses.

To view a sample rent rate report in spreadsheet format, click here.

To view a sample rent rate graphical analysis map, click here.

img-land-value

Data Costs

The cost of a rent rate report or graphical analysis map is $69 each. You may purchase reports by printing and completing an Order Form and mailing with your payment.

Or, purchase your land rent rate report now online. Your report will be sent via email within two business days. (Includes rates for non-irrigated cropland, irrigated cropland and pasture in spreadsheet format; User Guide and Lease Practices Update; and crop district map.)

State

Purchase a cash rent rate analysis map for non-irrigated cropland now online. Your report will be sent via email within two business days. (Includes Rent Report User Guide and Lease Practices Update)

State

 

Cash Rent Combination Analytics Package

Save $5 and get better insights into rent price points by accessing both our 2021 Cash Rent Survey Report and 2022 Expected Cash Rents® Report. This $148 data package includes:

  • County-level report of average cash rental rates for non-irrigated and irrigated cropland and pastureland.
  • County-level Expected Cash Rents® report for non-irrigated cropland. Expected Rents® report includes average county corn yields; low, high and average Expected Rents® for each county.
  • 2021/22 User Guide and Lease Practices Update.

Your report will be sent via email within two business days.

State:
Base Crop (Expected Rents Report)
Yield Type (Expected Rents Report)

 

Subscribe to our research with confidence: If you are not completely satisfied—for whatever reason—simply contact us and we will promptly issue a refund.

*For subscriptions, we will refund the unused portion of your subscription term.

Smarter Data for a Smarter Investor

Why our market intelligence is unique and how you can leverage it to maximize your farmland investment returns.

Federal and state governmental agencies and private groups regularly conduct opinion-based surveys to estimate agricultural land values and lease rates. Economists have studied the accuracy of opinion-based land value surveys by comparing them with actual agricultural market sales. A 1995 study by Gertel which appeared in the Journal of the American Society of Farm Managers and Rural Appraisers concluded that agricultural market sales were consistently higher than values from several different opinion-based surveys in both Illinois and Maryland.

Our competitive-bid lease data offers the clearest window into current lease market rates. We conduct original research to collect rental rates for actual competitive-bid leases as well as lease auctions. Mercator MarketVu offers a powerful tool for ensuring your cash rent rate reflects current market conditions, and helps put landowners and tenants on an equal footing¹.

Mercator MarketVu includes:

  • Rent bid date (Offers insight into the influences of grain prices and other market conditions that existed when rent bids were made.)
  • Number of bids received (Offers insight into whether winning bid represents a valid local market test.)
  • Current rent rate
  • Prior rent rate
  • Rental rate percent change
  • Tract size (Offers insight as to potential rate differentials between large and small tracts.)
  • Lease Term (Years)
  • Parcel Location (County; Section, Township, Range coordinates)

In addition, we are also collecting productivity data on each tract such as historic average yield data (when available) and Corn Productivity Index values to calculate rent paid/bushel and rent paid/CPI point metrics. This will enable landowners and operators to compare the productivity of tracts in our report to their land.

The Illinois report currently includes rent rates for more than 275 competitive-bid leases. Click here for subscription information.

2022 Expected Rents Reports

Timely. Exclusive. Insightful.

With projected 2022 crop prices significantly above prices received from 2014 to 2019, many landowners and operators are wondering how rental rates for cropland have been affected. Our Expected Rents® Reports offer a timely, quantitative tool for uncovering the true market rent for your land.

Cash rental rates typically adjust slowly to changes in farmland income. More worrisome for landowners, research suggests that cash rents are more likely to lag when land prices are rising, than when land prices are declining [1].

This is because landowners are the primary impetus for rent increases, and their understanding of the changing economics of crop production lags farm operators.

Conversely, tenants are the primary drivers of rent reductions, and they are quick to press their case when they foresee declining crop profit margins.

In the current environment of increased volatility in crop prices, newly negotiated cash rents are still substantially higher than the average rental rates reported in survey data. This is because many rental agreements are not updated annually to reflect changes in the profitability of crop farming. As a result, the average may be slow to adjust as leases are updated.

Our new Expected Cash Rents® Reports offer unparalleled insights for setting new lease rates, and for comparing your existing lease with the expected lease rate based on local crop yields and grain futures prices.

To view a sample Expected Rents report in spreadsheet format, click here.

How we calculate expected rents

We calculate Expected Rent Rates® based on established historical relationships between rents and crop revenues. This concept is now gaining currency among agricultural economists.[2]

In many regions of the country, corn and soybean production are now often the highest value annual row crops for grain and oilseed production. As a result, our 2017 Expected Rent® analysis can be ordered by specifying either corn or soybeans as the base revenue crop to calculate Expected Rents®.

To calculate Expected Rents®, we begin by calculating expected revenue. This is derived by multiplying the average expected crop yield times the expected crop price. For expected crop yield, we obtain 10 years of historical county-level yield data. We remove the high and low yields and calculate the average yield of the remaining eight years. This is commonly called an "Olympic Average."

To calculate the expected crop price, we use the current price of the December 2017 corn future contract for rents based on corn production. For soybeans, we use the current price of the November 2017 soybean futures contract. If you order this report after February 2017, we will use the Projected Harvest Price as calculated by the Risk Management Agency, which oversees the government subsidized federal crop insurance program. For corn, this is the February average price of the December 2017 corn futures contract. For soybeans, this the February average price of the November 2017 soybean futures contract.

To calculate Expected Rents®, we multiply the expected revenue times a rent factor that represents the historical relationship of cash rents to gross crop revenue. For corn and soybean production, our research indicates that on average, farmers pay cash rent equal to 35% of gross crop revenue. In less competitive farming regions, or fields that are cut up with creeks, waterways or otherwise inefficient to farm, this rent factor can range as low as 25% of expected revenue.

Conversely, in highly competitive farming regions, or situations where farmers actively compete in lease auctions for the right to lease productive land, cash rents range up to 45% and higher of expected county average revenue. Farm operators who are above average in terms of their production skills or cost efficiencies may also bid cash rents up relative to what the average producer can pay over the long run. In addition, if a landowner is concerned that a tenant may not maintain the quality of land with regards to fertility or weed control, the landowner should require a cash rent above the 35% average historical relationship.

Our Expected Rents® reports include county-level Average Expected Rents® based on a 35% landowner share of expected revenues, as well as a high and low range of Expected Rents®, based on 45% and 25%, respective landowner shares of expected crop revenue.

Our Expected Rents® report is a valuable companion tool to our Cash Rent Survey Reports, which include county-level estimates of cash rental rates for non-irrigated and irrigated cropland and pasture for the last four years from USDA's annual cash rent survey.

--------------------------------------------------------------------------------
[2] Mykel R. Taylor and Kevin C. Dhuyvetter, "2012 Kansas County-Level Cash Rental Rates for Non-Irrigated Cropland", Department of Agricultural Economics, January 2013 http://bit.ly/KS2013 [^]


If you have additional questions about this product, email us.

img-land-value

Our data set includes Expected Cash Rents for non-irrigated cropland on a county-by-county basis for every state. Data is omitted for some land classes in those counties where an insufficient amount of a specific land type exists to provide a reasonable estimate. Individual state reports are published in PDF format and sent via email.

Each Expected Rents® Report Includes:

  • County-level Average Expected Rents® based on a low, average and high landowner share of expected crop revenues. You choose the crop yield type (All cropland, non-irrigated cropland or irrigated cropland) and the base crop (For example, corn or soybeans).
  • Rent Report User Guide and Lease Practices Update. This 11-page bonus report includes an overview of four commonly used metrics for establishing cash rent rates, which can serve as useful tools to help ensure your lease rate is aligned with historical relationships to farm productivity and crop revenue. In addition, we offer our latest look at key lease provisions such as soil fertility maintenance requirements, rent payment dates, lease term (number of years), the importance of requiring tenant crop yield reports, late charges and lease termination clauses.

-----------------------------------------------------
[1]Gregory A. Ibendahl, “The Connection Between Cash Rents and Land Values,” Selected Paper prepared for presentation at the Southern Agricultural Economics Association Annual Meeting, Birmingham, Alabama, February 4-7, 2012 http://bit.ly/yAu3o7 [^]

Report Costs

The cost of an Expected Rents® report is $90 each. You may purchase reports by printing and completing an Order Form and mailing a check.

Or, purchase your report now online. Your report will be sent via email within two business days. (Includes spreadsheet of average county-level Expected Rent® rates for non-irrigated cropland, average county corn or soybean yields, map of crop districts, and 11-page 2021/22 Rent Report User Guide and Lease Practices Update.)

State
Base Crop
Yield Type:

 

Cash Rent Combination Analytics Package

Save $5 and get better insights into rent price points by accessing both our 2021 Cash Rent Survey Report and 2022 Expected Cash Rents® Report. This $148 data package includes:

  • County-level report of average cash rental rates for non-irrigated and irrigated cropland and pastureland.
  • County-level Expected Cash Rents® report for all cropland, non-irrigated or irrigated cropland (one yield-type per report.). Expected Rents® report include average county crop yields; low, average and high Expected Rents® for each county for the base crop you select.
  • 2021/22 Rent Report User Guide and Lease Practices Update.

Your report will be sent via email within two business days.

State:
Base Crop (Expected Rents Report)
Yield Type (Expected Rents Report)

 

Subscribe to our research with confidence: If you are not completely satisfied—for whatever reason—simply contact us and we will promptly issue a refund.

*For subscriptions, we will refund the unused portion of your subscription term.

Competitive-Bid Cash Rent Reports

Timely. Exclusive. Insightful.

Mercator MarketVu© is a subscription-based proprietary dataset that offers unparalleled insight into current cash rent market rates. In contrast to opinion-based surveys which often under report lease rates due to the influence of legacy leases, below-market rates negotiated between family members and other factors, MarketVu offers a timely quantitative, fact-based tool for uncovering the true market rent for your land by tracking the actual rates farmers pay for land during competitive-bid offerings. To learn more why our data is unique and how you can benefit from our market intelligence, click here.

img-land-value

Subscriptions to our single state cash rent rate reports—initially available for Illinois—are sold on a calendar-year basis. For example, if you subscribe in January, your subscription runs through December of the current year. If you subscribe in September, your subscription still runs through December of the current year. Lease data is updated within 15 days after the close of each quarter.

Annual subscriptions are $249 for the digital edition delivered in an Excel spreadsheet file via email, or $269 for the print edition delivered via First Class U.S. Mail. You may purchase reports by printing and completing an Order Form and mailing a check to:

Mercator Research LLC
PO Box 6052
Monona, WI 53716-6052

Also purchase a rent rate report quickly and securely online:

Investment returns from farmland are derived from two sources: annual income and the change in the property’s market value. The annual income return comes from directly growing crops on the land or leasing the parcel to an operator.

img-land-value

Many investors opt to limit their risk by leasing their land to experienced, well-capitalized local operators rather than grow crops themselves, hire custom operators or employ crop-share leases.

Institutional investors typically target a 5% initial gross income yield when investing in U.S. row-crop land, though less informed landowners settle for income yields of 3% and sometimes lower. You can easily calculate the income yield for a tract of land by dividing the annual farm profit or rent revenues by the market value of the land. For example, if a tract with an estimated market value of $9,000/acre is being leased for $270/acre, the annual income yield is $270/$9,000 or 3%.

If you lease your land to a local farm operator, it’s important to gather as much timely lease market intelligence as possible to ensure your lease rate reflects current market conditions. This can be increasingly difficult during volatile farm commodity markets. Gaining access to current lease market data helps put you on a more equal footing with prospective tenants who typically negotiate multiple leases and are more in tune with local market rates and crop production economics.

The Cash Rent Data section offers two resources to increase your lease market knowledge:

Our Cash Rent Survey Reports are customized summaries of average county-level cash rent rates for cropland and pasture presented in an easy-to-read format. Data for these reports comes from USDA’s annual cash rents survey, and Conservation Reserve Enhancement Program rental rates paid to landowners. CREP program lands are typically low lying, productive parcels.

Our Expected Cash Rent Reports, are a novel forward-looking analysis tool to gain insights into expected county-level average rents based on crop production revenues. This exclusive analysis offers unparalleled insights for setting new lease rates, and for comparing your existing lease with expected rents based on local crop yields and grain prices.

Subcategories