In 2014, the most recent year for which statistics are available, more than 50 percent of cropland and 25 percent of pastureland was rented, according to the U.S. Department of Agriculture’s Tenure, Ownership, and Transition of Agricultural Land survey. Combined, almost 40 percent of agricultural land was rented that year. Rental agreements are generally made in the fall of the year before planting. The use of cash-rental agreements is more prominent in areas with a great concentration of grain, oilseed or cotton production. Almost 70 percent of all leasing agreements are fixed cash-rental agreements, for which the rental rate is not based on crop productivity.

During 2020 the average cash-rental rate for cropland was $139 per acre, a decrease of $1 per acre or 0.7 percent from 2019, according to the USDA’s most recent August Cash Rents survey. Across the United States cash-rental rates for cropland were the greatest in areas with excellent crop productivity. Almost 70 percent of the counties across Illinois and Iowa had cash-rental rates of more than $200 per acre. At $294 per acre, Macon County, Illinois, had the greatest cash-rental rates in the country; eight out of the most-expensive-10 counties in the United States with the most inflated rental rates were in Illinois. Grundy County, Iowa, had the greatest rental rate in the state at $272 per acre.

Reduced expected productivity and revenue per acre kept rental rates significantly less outside of the Corn Belt. For example in portions of Texas such as Kimble, Webb and Sutton counties, the average cropland-rental rates were less than $10 per acre.

The average cash-rental rate for irrigated cropland in the United States was $216 per acre, a decrease of $4 per acre or 2 percent from the prior year. Irrigated-cropland rental rates were the greatest in areas with increased concentrations of fruit, vegetable and tree-nut production. In Ventura County, California, the average cash-rental rate for irrigated cropland was the greatest in the country at $2,550 per acre. Monterrey County, California, had the second-greatest rental rate at $2,220 per acre. Figures 1 through 3 highlight the average county cash-rental rate for cropland, cash rents for irrigated cropland and the year-over-year change in cropland cash rents for 2020.

For pastureland the average pasture-rental rate was $13 per acre, unchanged from 2019. Across the United States pasture-rental rates ranged from less than $10 per acre across much of the western United States to more than $80 per acre in portions of Illinois and Iowa. Pasture ground across portions of Appalachia also had among the greatest rates in the country, well more than the national average. Tillamook County, Oregon, and Snohomish County, Washington, led the country with an average cash-rental rate of $105 per acre for pasture. Figures 3 and 4 highlight the average county cash-rental rate for pasture during 2020 and the year-over-year change.

Summary

For the most part farmers use a fixed cash-rental-rate agreement to rent cropland. During 2020 the average cash-rental rates for cropland, irrigated cropland and pastureland were $139 per acre, $216 per acre and $13 per acre, respectively. Those rates were mostly in line with prior-year levels.

The stability in cash-rental rates is likely due to a variety of factors including Market Facilitation Program payments, designed to help farmers recover from retaliatory tariffs; ad hoc disaster aid to help producers impacted by wildfires, hurricanes and flooding in recent years; and increased off-farm income. All those factors allow farmers to remain competitive when bidding for cash lease agreements.

Moving into 2021, the farm economic outlook is uncertain. Off-farm income is certain to be less given the increased levels of unemployment following COVID-19. However ad hoc support through the Coronavirus Food Assistance Program for livestock, specialty livestock, specialty crops, non-specialty crops, dairy, aquaculture, nursery and floriculture producers could help farmers remain competitive when bidding for cash-rental agreements this fall and into the spring.

John Newton is the chief economist with American Farm Bureau Federation Market Intel; visit www.fb.org/market-intel for more information.