County Ag News

Land Rent in 2016

One of the more frequent questions I receive concerns how much people should charge or much can farmers pay for land rent. 

Following the drought in 2012 land rent rose dramatically. With corn prices around $6 or $7 per bushel and soybeans up around $14 a bushel there was sufficient cash income to pay higher amounts for rent. Now with corn around $3.60 per bushel and soybeans around $8.35 the gross income does not leave enough for these high rental amounts. 

In The Central Wisconsin area with our sandy soils it makes land rent for unirrigated acreage very hard if not impossible to cash flow. Unirrigated yields of 100 bushels or less for corn and 30 bushels or less for soybeans makes it very hard to balance a budget.

So the question is, can I afford to pay the rent or should I just back away from that acreage.

Many farmers are very reluctant to give up rented farmland because of high cash rents. Doing so forgoes future returns it economic conditions improves, as farmers giving up farmland have almost no chance of renting that farmland in the future.

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