Farmland rent risesAverage rent is $270 per acre this year
AMES — According to a press release from the Iowa State Extension and Outreach the price for leased farmland has increased this year.
The press release said the average rate for District Six, which includes Washington County, will average about $270 an acre this or a 7 percent increase from last year.
Iowa State Extension and Outreach offices did the survey earlier this year. They had 1,703 people respond to the survey. Fifty percent were from farmers, 27 percent from landowners, 13 percent from professional farm managers, 8 percent from agricultural lenders, and 2 percent from other professionals.
Federation Bank Senior Vice President Terry Engelken said this is comparable to what he has seen leased farmland go for in Washington County.
He also said the price of grain is the main reason for the increase.
“Back in May of 2010 the corn price was around $3.60 a bushel,” he said. “In May of 2011 we were looking at a corn price that was around $7.40. This is the actual price of what farmers have been paid.”
This isn’t the highest price he has seen corn sell for.
“I know people that last year sold some corn for over $8 a bushel even with the drought,” Engelken said.
He saw increases in the price up until September and then a trend downward because farmers had more grain than predicted.
Another item that contributes to the increase is the land.
“It depends on the quality of the land,” Engelken said. “The lower quality land goes cheaper and some of the real flat black ground goes higher.”
The bank tries to help farmers work on a cash flow plan to see what they will need to do to make a profit, he said.
“We visit with people and work through the cash flow to try to help them see what they need to break even with it and we kind of zero in on that,” Engelken said. “At the current prices with input costs and cash rents where they’re at, a lot of people generally would say if we don’t get $5 for corn there will be a lot of farmers that will be losing money.”
The weather this year has been problematic for setting corn prices. Last year most farmers had their prices already set, Engelken said.
“If we don’t get the corn planted here in the next couple of weeks then we’re going to start seeing a potential for the price to come up,” Engelken said, “because the yields aren’t probably going to be as good.”
Washington State Bank Senior Trust Officer and Vice President Larry Fishback also has seen the increases.
“It’s pretty well known the land is in high demand,” he said.
There are a number of things that play into setting crop prices, like the yield farmers could see come from their crops, Fishbank said. He has seen farmers be cautious when it comes to setting their prices.