Skip to main content

Posts

Showing posts from October, 2017

USDA Average County Rents Published in September

By David Bau, Extension Educator

The National Agricultural Statistic Service with the USDA released the county farmland rental rate estimates for 2017.  After increasing continuously since 2007, statewide average rents went down for the third year in a row. The state average cropland rental rates declined from $185 in 2014 to $180 in 2015 to $170 in 2016 to $166 in 2017, as indicated in Chart 1 below.  This represented a 2.4% decrease from 2016 to 2017 and 5.5% decrease from 2015 to 2016 and 2.7% decrease from 2014 to 2015  Previously rental rates had a 4.5% increase from 2013 to 2014, 18% from 2012 to 2013 and 11.1% from 2011 to 2012.

Statewide Irrigated rental rates declined from $210 in 2015 to $185 in 2017 almost a 12% drop.

Pasture rent average increased from $26 per acre in 2014 to $28 per acre in 2015 to $30 in 2016 and 2017 or an increase of 7.1%.


Table 1 below lists the actual farmland rental rates by county from Adult Farm Management Records.  Since farmers and landlords are …

What is a Fair Farm Rental Agreement?

By David Bau, Extension Educator

Landlords, Farmers, Agri-Business Professionals should make plans to attend one of the informative meetings being held across Central and Southern Minnesota.  These free meetings are being provided by the University of Minnesota Extension.  Farmer profits are low or negative and farm land rental rates declined slightly while commodity prices have decreased significantly. Determining a fair profitable farm rental agreement is a challenge in today’s economy with recent record corn and soybean prices and record farm land values as recently as 2012 but commodity prices continued to decline since then.

Negotiating a fair rental agreement that satisfies the land owner and the farmer is a challenge.  David Bau and Nathan Hulinsky, Extension Educators in Ag Business Management, will provide several ways; by examples, factsheets and worksheets to determine a fair farm land rental rate for both parties.

Topics covered at the meetings will include local historic …

What Direction will 2018 Farmland Rent Go? Stay the Same? Up? or Down?

By David Bau, Extension Educator

Each year I put together tables listing actual farmland rental rates by county from Adult Farm Management Records.  Unfortunately farmers and landlords are starting to negotiate 2018 farmland rental rates and the last actual numbers available are for 2016 so I am forced to estimate figures for 2017 and 2018.  When I did this last year I used an estimate of a 10% decline and the actual figure came in at 2.5% decline statewide.  For 2017 I heard many times that rents were down, although some rents went up and some remained the same, in table 1 below I estimated a 2.5% decline in 2017 from 2016.

But what direction should 2018 farmland rental rates go?  How do I determine an estimate for 2018 farmland rental rates?

Should they stay the same? 
Landlord property taxes continue to increase. While the state legislature help with some of the school referendum costs they still increase taxes.  If rents stay the same, a landlord’s income will go down if taxes incr…

2016 ARC-CO Payments for Minnesota

By Curtis Mahnken and Bob Craven, Center for Farm Financial Management, Applied Economics

The Farm Service Agency (FSA) recently released 2016 county yields for corn, soybeans and wheat. These yields along with the marketing-year-average (MYA) prices which were released in September provide the information needed to calculate Agricultural Risk Coverage-County (ARC-CO) payments. These payments will be made in October 2017.

ARC-CO triggers a payment based on a crop’s base acres if the actual county revenue for that crop is less than 86% of the “benchmark” revenue. For corn, the MYA price (Table 1) is almost 30% lower than the benchmark price. Payments will be made in counties where the 2016 yield is up to 22% above the county benchmark yield. For wheat, payments will be triggered in counties where their yields are up to 48% above the benchmark yield.

Table 2 includes the payments per base acre by county for corn and wheat. These numbers have been adjusted to reflect the 6.8% reduction f…

New Opportunities for Minnesota Beginning Farmers and Farm Asset Owners Who Want to Help Them

By Don Nitchie, Extension Educator

Beginning in 2018, there are two new opportunities available which can be very helpful to beginning farmers in Minnesota. These programs are the Beginning Farmer Incentive Credit for existing farm asset owners who rent or sell assets to beginning farmers and the Beginning Farmer Management Credit for the beginning farmer enrolled in an approved farm business management program. These tax credits can reduce an individual’s Minnesota income tax. The programs were created by the Minnesota Legislature during the 2017 Special Session. According to MDA, current legislation funds these programs through 2023.

According to the Minnesota Department of Revenue posting of June 6, 2017, the beginning farmer incentive credit is a tax credit for owners of agricultural assets. Such assets may be land, livestock, facilities, or machinery located in Minnesota. The assets must be sold or rented to a beginning farmer who is not a family member of the asset owner, as def…