Iowa Farm Cash Rents 2021
Feb 1, 2022
Farmers know that in addition to hard work, the right conditions are crucial for success. Obviously, this includes the weather and commodity prices, but lease rates cannot be overlooked. Not only does it influence the amount a farmer has to spend for the land he or she is leasing, but it also impacts the amount landowners can count on receiving for their property. This is a major consideration for those farming in Iowa, as more than 80% of the land used for agriculture in the state is being leased from non-operator landlords.
As one of the nation’s largest agricultural centers with more than 30.6 million acres of land being utilized for farms, Iowa is a hotbed of farm cash rent activity. Whether used for growing corn or soybeans, or for raising livestock, the state’s abundant and fertile topography makes for some of the most attractive real estate for the agriculture sector. As such, those hoping to take advantage of this are rightfully interested in knowing what they should expect from Iowa farm cash rent in 2021. According to a recent survey, those engaged in farming in the Hawkeye State can expect to spend more on their leases this year. Even though the prices of commodities such as corn and soy have risen, it may not be enough to offset the added expense. Read on to learn more about the numbers and what they signify.
Breaking Down the Numbers
As it does every year, Iowa State University recently prepared a survey detailing typical cash rental rates for farmland. According to the university, the information was compiled from more than 1,300 responses provided by farmers, landowners, farm managers, lenders and other respondents. Altogether, these individuals account for approximately 1.5 million cash-rented acres throughout the state.
Overall, the survey found that there has been a substantial uptick in land rents this year compared to 2020. This year marked the first time since 2013 that there had been a substantial increase in rents, according to the survey. The state’s average per-acre rent has increased to $232, up from $222 the previous year.
Breaking down the figures in terms of land quality, acreage that fell into the “low quality” category experienced the highest rate of increase, rising from $188 per acre last year to $197 in 2021. This represents a rise of 4.8%, whereas “medium quality” land rose in value by 4.5% and “high quality” property increased by an average of 3.9%.
These increases are expected to put farmers in a tight spot, even as the prices of crops are much higher than in recent memory. According to the university, the USDA Economic Research Service is projecting that net farm income will decline this year. This is due primarily to the loss of government payments that came in the form of emergency funding due to the COVID-19 pandemic and its impact on global markets.
Achieving Cash Rent Efficiencies
At times such as these, it is more crucial than ever for farmers looking to lease farmland to find the most advantageous conditions. That’s why many of them look to CommonGround. Our online marketplace helps them find tillable land that fits their preferences and makes it easy to establish relationships with landowners. We provide them with aerial and soil maps that allow them to make the most informed decisions about the quality of these parcels and the potential yield they can expect. In addition, our CashRentstimate tool gives property owners a more accurate and fair assessment of what their acreage is worth.
To learn more, browse our available listings here, or click here to try the CashRentstimate tool for yourself. If you have any further questions about how our marketplace works, get in touch with us today.
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