If you are looking to lease farmland, you probably wonder what the going rate is in your area. Each area’s leasing rates can drastically differ. You will even find different rental rates within the same areas as it depends on the status of the local market, the type, and condition of the land rented, and of course, the person that owns the land.
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The Top Factors
While there are many factors that can determine a farmland’s leasing rate, you’ll want to focus on these top three factors to get the average cost of leased land in your area.
- Look at similar lands – If you are trying to get an idea of the land leasing rates for farmland, make sure you only look at the rental rates for other farmlands. Comparing farmland to hay land would not be equivalent. Farmers usually pay a higher premium for land they can plant crops than land filled with hay. Looking at the same
types of land will give you a better idea of what to expect and better ground for negotiations with your landlord.
- Determine your type of operation – Certain operations pay higher rental costs than others. Again, research the operations that are similar to yours in order to get a good idea of the going rate in your area. If you are a pasture farmer, look at the rent paid by other pasture farmers in the area, rather than crop farmers.
- Look at what’s on the land – Are you leasing just the land or are there other infrastructures present? This will determine if your leasing rates will be higher or lower than the others in the area. Again, for comparison purposes, research land that is very similar to the land you intend to lease to get an idea of the going rate.
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Resources You Can Use
Aside from your own research, you can utilize any of the following resources to help you get the most out of your lease:
- The
USDA National Agriculture Statistics Service offers ‘Quick Stat’s which allows you to view the rent by year in your county.
- You can also search your ‘state name’ + farmland lease rates to get the latest information regarding farmland lease rates in your area.
- Consult with your local state extension service to inquire if they have information on the average lease prices in the area.
Your best bet is to do your research. Use all of the resources at your disposal to get an idea of the average farmland leasing rates for the area. The more information you have at your disposal, the better your chances of successful negotiations with a potential landlord.
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