Jim JansenNebraska Extension Educator

jjansen4@unl.edu

1

Cropland Rental Rates and Leases in 2020

Jim Jansen

Agricultural Economist

jjansen4@unl.edu

402-261-7572

DISCLAIMER

• Land values and rental rates shown and discussed in this presentation are excerpts from the UNL Nebraska Farm Real Estate Market Survey.

• Information provided in this presentation are averages from these surveys. Actual land values and rental rates may vary depending upon the quality of the parcel and local market forces for an area.

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

2

Nebraska Farm Real Estate Survey

• Annual survey conducted since 1978 of Nebraska agricultural appraisers, professional farm managers, and bankers engaged in the land industry.

• Preliminary results for land values and rental rates published the second week of March.

• Full report published in June.

• Nebraska Farm Real Estate website full access to these resources: http://agecon.unl.edu/realestate

Nebraska Agricultural Statistics Districts

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

3

Nebraska Cropland ValuesLand Averages and Annual Percent Changes

Nebraska Agricultural Average All Land Value – Feb. 1, 2019

North

$1,050/ac

-4%Northwest

$680/ac

-5%

Southwest

$1,565/ac

-5%

Central

$3,090/ac

-2%

Northeast

$5,230/ac

-3%

East

$6,185/ac

-1%

Southeast

$4,700/ac

-2%

South

$3,535/ac

-6%

State

$2,645/ac

-3%

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

4

Dryland Cropland (No Irrigation Potential)Average Value – Feb. 1, 2019

North

$1,495/ac

-1%Northwest

$645/ac

-4%

Southwest

$1,445/ac

-9%

Central

$2,755/ac

1%

Northeast

$5,300/ac

-4%

East

$5,765/ac

2%

Southeast

$4,130/ac

-2%

South

$2,880/ac

-3%

State

$3,040/ac

-2%

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Dryland Cropland (Irrigation Potential)Average Value – Feb. 1, 2019

North

$1,915/ac

-4%Northwest

$680/ac

-7%

Southwest

$1,585/ac

-3%

Central

$3,055/ac

-1%

Northeast

$5,640/ac

-3%

East

$6,145/ac

-2%

Southeast

$5,265/ac

-1%

South

$3,450/ac

-5%

State

$4,010/ac

-3%

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

5

Gravity Irrigated CroplandAverage Value – Feb. 1, 2019

North$3,570/ac

-2%Northwest$2,245/ac

-4%

Southwest$3,700/ac

-5%

Central$5,860/ac

1%

Northeast$6,510/ac

-3%

East$7,585/ac

2%

Southeast$5,900/ac

-6%

South$5,365/ac

-7%

State$5,690/ac

-2%

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Center Pivot Irrigated CroplandAverage Value – Feb. 1, 2019

North

$3,905/ac

-3%Northwest

$2,565/ac

-5%

Southwest

$4,110/ac

-4%

Central

$6,390/ac

-2%

Northeast

$7,210/ac

-1%

East

$8,485/ac

-2%

Southeast

$7,470/ac

-3%

South

$6,150/ac

-6%

State

$5,970/ac

-3%

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

6

Nebraska Cash Rental RatesDryland Cropland

Rental Rates

Dryland CroplandAverage Rental Rates – 2019 Season

North

$50/ac

-6%Northwest

$27/ac

-4%

Southwest

$38/ac

-7%

Central

$84/ac

-5%

Northeast

$205/ac

-2%

East

$200/ac

5%

Southeast

$155/ac

-3%

South

$73/ac

-4%

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

7

Dryland Cropland Rental Rate Ranges – 2019 Season

North

H: $74/ac

A: $50/ac

L: $36/ac

Northwest

H: $40/ac

A: $27/ac

L: $21/ac

Southwest

H: $55/ac

A: $38/ac

L: $31/ac

Central

H: $110/ac

A: $84/ac

L: $67/ac

Northeast

H: $245/ac

A: $205/ac

L: $170/ac

East

H: $230/ac

A: $200/ac

L: $160/ac

By Region

High Grade (H)

Average (A)

Low Grade (L) South

H: $105/ac

A: $73/ac

L: $47/ac

Southeast

H: $185/ac

A: $155/ac

L: $125/ac

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

USDA-National Agricultural Statistics Service Cash Rent Survey

• Biennial survey conducted by the USDA-National Agricultural Statistics Service (NASS) of farmers and ranchers

• Survey starts in late-winter and conducted through mid-summer of odd-numbered years

• Analysis published around the second week of September

• Nebraska county estimates in addition to other resources may be found at: www.nass.usda.gov/Statistics_by_State/Nebraska/Publications/County_Estimates/

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

8

Dryland Cropland Rental Rates – 2019 Season

Source: Farmland Rental Rate Survey, USDA-NASS, Sept 10, 2019

Counties with Declines in USDA-NASS Cash Rents on Dryland Cropland – 2017 to 2019

Source: Nebraska Farm Bureau, November 4, 2019

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

9

Counties with Increases in USDA-NASS Cash Rents on Dryland Cropland – 2017 to 2019

Source: Nebraska Farm Bureau, November 4, 2019

Nebraska Cash Rental RatesIrrigated Cropland

Rental Rates

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

10

Gravity Irrigated CroplandAverage Rental Rates – 2019 Season

North

$165/ac

-3%Northwest

$110/ac

-4%

Southwest

$155/ac

-6%

Central

$195/ac

-5%

Northeast

$255/ac

2%

East

$245/ac

-4%

Southeast

$220/ac

-2%

South

$190/ac

-5%

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Gravity Irrigated CroplandRental Rate Ranges – 2019 Season

North

H: $190/ac

A: $165/ac

L: $115/ac

Northwest

H: $135/ac

A: $110/ac

L: $88/ac

Southwest

H: $195/ac

A: $155/ac

L: $120/ac

Central

H: $245/ac

A: $195/ac

L: $160/ac

Northeast

H: $285/ac

A: $255/ac

L: $215/ac

East

H: $285/ac

A: $245/ac

L: $210/ac

By Region

High Grade (H)

Average (A)

Low Grade (L) South

H: $230/ac

A: $190/ac

L: $155/ac

Southeast

H: $260/ac

A: $220/ac

L: $185/ac

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

11

Center Pivot Irrigated CroplandAverage Rental Rates – 2019 Season

North

$185/ac

-8%Northwest

$145/ac

-3%

Southwest

$175/ac

-8%

Central

$215/ac

-2%

Northeast

$280/ac

-3%

East

$285/ac

2%

Southeast

$250/ac

-4%

South

$205/ac

-5%

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Center Pivot Irrigated CroplandRental Rate Ranges – 2019 Season

North

H: $225/ac

A: $185/ac

L: $140/ac

Northwest

H: $180/ac

A: $145/ac

L: $110/ac

Southwest

H: $220/ac

A: $175/ac

L: $150/ac

Central

H: $260/ac

A: $215/ac

L: $175/ac

Northeast

H: $325/ac

A: $280/ac

L: $240/ac

East

H: $325/ac

A: $285/ac

L: $240/ac

By Region

High (H)

Average (A)

Low (L) South

H: $250/ac

A: $205/ac

L: $185/ac

Southeast

H: $300/ac

A: $250/ac

L: $205/ac

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

12

Irrigated Cropland Rental Rates – 2019 Season

Source: Farmland Rental Rate Survey, USDA-NASS, Sept 10, 2019

Counties with Declines in USDA-NASS Cash Rents on Irrigated Cropland – 2017 to 2019

Source: Nebraska Farm Bureau, November 4, 2019

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

13

Counties with Increases in USDA-NASS Cash Rents on Irrigated Cropland – 2017 to 2019

Source: Nebraska Farm Bureau, November 4, 2019

Agricultural Land LeasesTrends in Lease Arrangements for 2020

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

14

Methods for Setting Cash Rental Rates

• Methods for estimating a cash rental rate in 2019 or 2020:• Adjusting survey data

• Cash equivalent from crop share

• Return on investment

Estimating Cash Rental Rates by Adjusting Survey Data

• Land rental rate survey data:• Evaluate available cash rental survey data to establish a baseline in the landlord

and tenant negotiation process.

• Average yields:

County Value Farm Value

County Rental Rate $135/ac.County

Rent/Bushel$1.13/bu.

Corn Yield 120 bu./ac. APH Yield x 105 bu./ac.

County

Rent/Bushel$1.13/bu. Farm Level Rent $118.13/ac.

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

15

Cash Equivalent From Crop Share

• Rent paid to landlord by tenant based off owner’s share of net returns per acre.• Example 50/50 split:

Value Corn Soybeans

Yield (50% share) 80 bu./ac. 25 bu./ac.

Price/bushel x $3.50/bu. x $8.40/bu.

Income $280/ac. $235/ac.

Owner Expenses -$155/ac. -$95/ac.

Net Return to Owner

(Effective Rent)$125/ac. $115/ac.

Return on Investment

• Multiply the estimated current market value by the expected rate of return to determine the rental rate per acre.

*Estimated net rates of return by land type are available in Table 5

of the Nebraska Farm Real Estate Market Highlights Report 2018-2019.

Dryland Irrigated

Cropland Cropland

Land Value $5,000/ac. $8,500/ac.

Rate of Return x 2.4-2.8% x 2.5-2.9%

Rental Rate per Acre $120-$140/ac. $213-$247/ac.

Farm

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

16

Entity Responsible for Maintaining Irrigation System as Part of Cash Lease in Nebraska

Source: Nebraska Farm Real Estate Market Development Survey, 2018.

Discount on Cash Rent per Acre When Tenant Owns Pivot for Irrigation System in Nebraska

Source: Nebraska Farm Real Estate Market Development Survey, 2018.

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

17

Discount on Cash Rent per Acre When Tenant Owns Power Unit for Irrigation System in Nebraska

Source: Nebraska Farm Real Estate Market Development Survey, 2018.

Reasons for Planting Cover Crops onCropland in Nebraska

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

18

Cover Crop Practices in Nebraska by Agricultural Statistics District

Source: 2017 Census of Agriculture, National Agricultural Statistical Service, USDA.

- - - Percent - - - - - - Percent - - -

Northwest 52,884 2,904,637 1.8 274 3,682 7.4

North 57,989 1,820,397 3.2 306 2,686 11.4

Northeast 133,885 3,630,051 3.7 960 6,717 14.3

Central 98,485 2,048,103 4.8 585 3,949 14.8

East 186,216 4,214,043 4.4 1,102 9,695 11.4

Southwest 60,853 2,489,757 2.4 265 2,686 9.9

South 83,247 1,878,089 4.4 343 2,431 14.1

Southeast 73,203 3,257,522 2.2 584 6,238 9.4

State 747,903 22,242,599 3.4 4,419 38,084 11.6

- - - - - - Acres - - - - - - - - - - - - Numbers - - - - - -

Agricultural

Statistics

District

Planted Acres Cropland Acres

Planted to

Cover Crops

Number of Operators Cropland

Operators Planted

Cover CropsCover Crops Cropland

Planted

Cover Crops

Planted

Cropland

Rental Discount in Dollars per Acre on Land Lease When Tenant Plants Cover Crops in Nebraska

Source: Nebraska Farm Real Estate Market Development Survey, 2019.

Jim JansenNebraska Extension Educator

jjansen4@unl.edu

19

Fillable PDF Leases – AgLease101.org

Click Document

Library

Fillable PDF Forms

Lease Publications

Questions?

Jim Jansen

Agricultural Economist

jjansen4@unl.edu

402-261-7572

CherrySioux

Morrill

Brown

Grant

Kimball

Arthur

Blaine

Banner

Hooker

Logan

Thomas GarfieldScotts Bluff

Holt69.50

Custer76.00

Lincoln52.50

Sheridan23.50

Garden38.00

Dawes28.00

Keith46.00

Rock43.50

Knox199.00

Dundy43.00

Buffalo108.00

Chase49.50

Frontier56.00

Dawson99.50

Gage152.00

Perkins50.50

Cheyenne34.00

Hayes55.00

Box Butte32.00

Cedar220.00

Furnas71.50

Loup60.00

Boone177.00 Platte

198.00

Antelope134.00

Otoe174.00

Harlan75.00

Butler194.00

Saline136.00

York165.00

Pierce178.00

Clay134.00

Valley100.00

Cass204.00

Thayer120.00

Adams125.00

Hall122.00

Dodge208.00

Saunders198.00

Phelps96.50

McPherson54.00

Seward166.00

Deuel37.00

Howard130.00

Cuming244.00

Hitchcock52.00

Greeley100.00

Burt221.00

Fillmore136.00

Franklin105.00

Keya Paha59.00

Webster98.00

Wheeler96.00

Nuckolls125.00

Madison190.00

Wayne231.00

Red Willow59.00

Sherman94.50

Jefferson134.00

Kearney113.00

Colfax209.00

Pawnee136.00

Lancaster173.00

Boyd107.00

Dixon218.00

Merrick116.00

Nance148.00

Polk171.00

Gosper74.00

Hamilton154.00

Stanton220.00

Richardson198.00

Nemaha179.00

Thurston233.00

Johnson155.00

Douglas203.00

Dakota240.00

Sarpy199.00

Washington222.00

¯0 30 60 90 12015Miles

Cash Rent PaidDollars Per Acre

179.01 - 244.00136.01 - 179.0076.01 - 136.0046.01 - 76.0023.50 - 46.00Not Published

2019 Non-Irrigated Cropland Cash Rent Paid Per AcreNebraska

Source: USDA National Agricultural Statistics ServiceSeptember 10, 2019

Garden

Grant

Otoe

Arthur

Cheyenne

Blaine

Cass

Boyd

Banner

Hooker Thomas

Deuel

Keya Paha

Wayne

Pawnee Richardson

Thurston

Sarpy

Lancaster

Stanton

DakotaCherry176.00

Custer224.00

Lincoln198.00

Holt218.00

Sioux165.00 Sheridan

145.00

Morrill156.00

Dawes150.00

Brown162.00

Knox262.00

Keith183.00

Rock160.00

Buffalo244.00

Dundy170.00

Chase199.00

Kimball135.00

Frontier179.00

Dawson223.00

Gage256.00

Perkins183.00

Box Butte185.00

Cedar288.00

Hayes227.00

Furnas190.00

Boone267.00 Platte

273.00

Antelope256.00

Butler270.00

Saline240.00

York261.00

Pierce248.00

Harlan217.00

Clay253.00

Logan180.00

Loup175.00

Valley229.00

Thayer246.00

Adams254.00

Hall242.00

Dodge261.00

Saunders257.00

Phelps239.00

McPherson136.00

Seward279.00

Howard218.00

Cuming294.00

Hitchcock181.00

Garfield216.00

Greeley220.00

Burt248.00

Fillmore260.00

Franklin220.00

Webster229.00

Wheeler221.00

Nuckolls258.00

Madison262.00Scotts Bluff

175.00

Red Willow186.00

Sherman224.00

Jefferson230.00

Kearney236.00

Colfax266.00

Dixon289.00

Merrick234.00

Nance247.00

Polk263.00

Gosper214.00

Hamilton245.00

Nemaha233.00

Johnson251.00

Douglas235.00

Washington283.00

¯0 30 60 90 12015Miles

Cash Rent PaidDollars Per Acre

267.01 - 294.00240.01 - 267.00199.01 - 240.00165.01 - 199.00135.00 - 165.00Not Published

2019 Irrigated Cropland Cash Rent Paid Per AcreNebraska

Source: USDA National Agricultural Statistics ServiceSeptember 10, 2019