Cash rents in Iowa are down 1.4% to an average of $219 per acre for the 2019 crop year, according to an annual survey conducted by Iowa State University (ISU). The slight drop from 2018’s average rate of $222 aligns with the softening of the ag market.
Average cash rent topped at $270 per acre in 2013. This year’s average represents a $51, or 19%, decrease from 2013.
Since the high-water mark of 2013, cash rents have steadily declined, along with farmland values. For example, farmland values in Iowa have dropped nearly 17% since 2013.
Compared to farmland values and cash rental rates, corn and soybean prices have dropped 50% and 45%, respectively, since mid-2013, according to Alejandro Plastina, assistant professor and extension economist at Iowa State.
“Cash rents declined slightly in 2019 but won’t offset lower prices for farmers who are renting land,” Plastina says. “It will be tough to break even with these cash rents if you are renting land.”
The 2019 survey showed a range from a 3.4% increase in southeast Iowa (District 9), to a 2.7% drop in north central Iowa (District 2). The lowest rents are in the south-central counties, where most averages are below $200 an acre.
This survey data can be used as a reference point in negotiation rental rates, Plastina says.
“These are averages so I always say that they should not be used as off-the-shelf truths to avoid negotiations between tenants and landowners,” he says. “Both parties have to figure out what actually works for them in terms of the land quality, historic yields, what kind of improvements are being made to the land and other factors unique to their situation.”
Other factors that can affect rental rates include: size and shape of fields, field access, fertility levels, contracts for growing seed or specialty grains, USDA programs or longevity of the lease.
More resources on rental agreements can be found on the Ag Decision Maker leasing page.
The survey is based on 1,262 responses across the state for cash rent prices received to grow corn, soybeans, hay, oats and pasture. The rate of change varied by county and by region, with 65 counties experiencing a decline in the average rent for corn and soybeans.