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CASH RENT

I'm getting $19,050 for 80 acres of which 77.65 acres is tillable, so that comes out to $245.33 an acre, It's in East Central Illinois. 1/2 beans and 1/2 corn. He rotates every year. I don't live close (700 mi) but come once a year or more. He wanted to pay me a little more but, I told him I put some value on his care of the land and he lives close, 3 or 4 miles away so he's looking out for his crops and the land. Taxes, a little over $2000 a year.
DWF
 
$20,000 a year isn't a great return on a $640,000 investment. No brainer to get 5% (32K) on your money in an investment portfolio.
And who knows what income and capital gains taxes will be 5 years from now? Consensus opinions are at least 20% more.
 
This year several people are paying what appears to be the new demand. 250-350 an acre. Thats up from 60-100 just last year. Lots of demand for row crop ground, of which we dont have a lot. Thats on land thats selling 4000-6000 an acre and up, tax rate is about a dollar a thousand on ag value, which is normally 60-80 percent of cash value.
 
Here in SE Lower Michigan it's going anywhere from 35/40 acre to beyond $200.

The problem is, everyone hears how this person or that person just got $175/acre on a "open field" with good dirt and tiled well (so should be a decent farm), so they think their 15 acres (broke into 5 little fields with narrow ditch crossings, and what isn't "high blow-sand" is "low-lying swamp" with no tile) is worth the same money..

My uncle works right around 1,000 acres. Most is "family owned" and rented on 1/3 shares.. The "cash rent" is somewhere around $125/150, IIRC.

It's been a few years since I stopped farming (or trying to).. Most of my ground I was renting for 35-50/acre, but, I was renting the small pieces (5-7 acres) or the previously mentioned sandhills and swamps.. The stuff no one else wanted, and I found out why they didn't want it the hard way.

Brad
 
My brother has been getting my 120 acres for $35 an acre....he did give me a $1200 bonus last year for not raising his rent. I am a good brother LOL!
 
I've been getting $115 per acre for dryland, but that's going to go up to $140 or $150 for next year. (Eastern Nebraska).

Our lease states payment be made in advance between January 1 and January 10, so I've already received payment for this year. Our lease also states if either party proposes to change the terms for the upcoming year, it must be announced by September 1 of the preceding year. So, I have until September 1 to do my homework.

I really don't want to rock the boat with my current renter. He's rented it since I quit farming in 1992. And his wife is a distant cousin of mine. And he and his wife, his wife's sister and her late husband, his wife's late brother and his wife, and my wife and I all ran around together 45-50 years ago before any of us were married.
 
Here in North east Iowa it is going crazy. The farm right next to me just rented for $1000 now for three years use. So they front paid $333 per acre. I quit renting any ground five years ago. My brother still rents about four hundred acres. His average rent is about $175. He has a lot of long term farms and he has always front paid the rent April 1st. He tries to treat the land like his own. It must work because he has turned down two farms this year alone. The owners found out that the big money renters don"t take much care of anything.
Have one big shot around here that farms a farm for a few years and moves on. He never puts any lime on and the last year no fertilizer. Has big equipment and a loader on several of his tractors. If your gate is too small for him he just takes a loader and pushes the gates and post out into a pile. He pushed several trees over into one of my fields. They where on his side of the fence but he just shoved them over on me. Damaging the fence in the process. So I cut them up into fire wood lengths and put them back into his field. Made cutting his soybeans real interesting that fall. LOL
 
So sell the land and invest!
How much do you think that farmer has "invested" in farm equipment, seed, fertilizer, fuel, insurance and labor?
 
So how much of that comes from the FSA base? From what I have read the base heavily influences the going rent on a parcel at least in the past. We here in the Northeast never had the high bases like the folks in the Mid-West. Anybody care to comment?
 
I don't know about other states, but here in Iowa, Iowa state university does both a land rent and land sale survey. It's located at http://www.extension.iastate.edu/agdm/wholefarm/html/c2-10.html if you want to dig into it further. Kinda helps reduce the BSers so to speak.
 
Lower mid-michigan 50-70/acre. Little higher on big fields 100 acres or more.

Over in the thumb I know a few guys that have "lowlands" without tile, 35-40 acre. Wet the majority of the year.
 
The other side of that coin... or perhaps the logical, forseeable, conclusion is that if he's going to be paying those kind of dollars... and there's no stipulation on care... then he's going to plunder it for all it's worth. He's being plundered at that kind of rental rate too... You could more than buy land here for that kind of 3 year deal.
Unreasonable works both ways.

Rod
 
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