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Extension > Agricultural Business Management News > January 2018

Wednesday, January 17, 2018

Comparing Corn and Soybean Cash Prices with Average Southern Minnesota Farmland Rental Rates

By David Bau, Extension Educator

The average cash price for corn and soybeans each calendar year since 2000 is listed in Table 1 below.  Columns 2 and 3 list the average cash prices each year in Worthington for corn and soybeans.  The Column 4 lists the average percent change in corn and soybean prices from the prior year.  Column 5 lists the average rent paid by 1200 farmers in Southern Minnesota who are part of an Adult Farm Management Programs.  Column 5 multiplies the price percent change by previous year’s actual average rents to determine the farmland rent each year.  Column 7 starts with the average rent $98.31 in 2000 and then multiplies this by the corn and soybean price change (-3.21) to determine a rental rate of $95.16 for 2001.  To determine the 2002 rental rate, start with the 2001 rate of $95.16 and multiply this by the price change (15.06) and to determine an average rent of $109.49 for 2002.  This process was repeated to determine rentals rate through 2017. There are two question marks for 2017 as the average rent will not be available until March of this year.
The last three columns vary quite significantly. If the change in corn and soybean prices was the main factor determining Southern Minnesota farmland rental rates, you would expect the actual rental rates to be similar to the Column 6. Comparing these figures the estimated rents using the price change factor were $29.26 lower than the actual rents listed in Column 5 over sixteen years or an average of $1.83 per acre per year, very close. Using the second calculation of starting with the 2000 average ($98.31) and adding or subtracting the price change each year to the previous calculation, there is much more variability and with calculated rents in Column 7 were higher by $752.89 over the sixteen years or $47.05 per acre per year, a significant difference. This more reactive rate is closer to what was called “the coffee shop rates”.

Rent had been on a steady increasing trend of less than $10 per from 2000 through 2005 then started increasing more rapidly from 2006 through 2010 and then increased only slightly in 2011 due to lower prices in 2009 and 2010, with $6.00 plus corn and $12.00 plus soybean prices, rents took off in 2012 and 2013 before beginning to decline in 2014 as corn and soybean prices moved lower.

Many factors effect rental rates including property taxes, input costs, yields, prices and gross income, but there does seem to be a relatively close tie to corn and soybean prices and southern Minnesota farm land rental rates.

Farm Resource Guide Available

By David Bau, Extension Educator

The Farm Resource Guide for 2018 is now available at many University of Minnesota Extension County offices across the state.  This resource guide includes a wide variety of useful farm business management information including the following items:

  • Custom rates
  • Average farmland rental rates by county
  • Flexible Rental Agreements 
  • It includes lease forms for Cash Rent and Share Rent arrangements
  • Farmland sales information for all counties in Minnesota
  • Information on charges for custom feeding, commodity storage, leasing buildings and various bin rental rates 
  • Current information on pasture rental rates, tree timber values
  • Marketing information along with recent cost trends for Minnesota
  • Commodity price probabilities for corn, soybeans, alfalfa hay, straw, grass hay, hogs and cattle
  • Corn and soybean yields by county 
  • Feedlot Rule Highlights and information on Manure Agreement and Easements 
  • Examples of Manure Spreading Lease and Land Application Agreement forms

This Resource Guide is available for a $25 fee plus postage and sales tax if you would like to have your own copy.  I can provide you the information in your preferred format: e-mail cost $25 plus sales tax; CD cost $28.50; or hard copy cost $30.00.

If you would like your own copy of the Farm Resource Guide, please e-mail me at bauxx003@umn.edu or give me a call at 507-372-3900 ext. 3906 and let me know what format you would like.  I will send out the materials and an invoice as soon as possible.  I hope you find the Resource Guide useful and would welcome your feedback on what you would like to see included in next year’s Guide.


For more farm business information, please see the University of Minnesota Extension website:  www.extension.umn.edu/agriculture/business/farm-financial-management/

Friday, January 12, 2018

Third Annual Women in Ag Network Conference on February 15

By Megan L. Roberts, Extension Educator

The Women in Ag Network is excited to announce our third annual conference on February 15, 2018 in St. Cloud, MN at the Holiday Inn and Suites. Registration begins at 8:45 a.m. with conference programming from 9:15 a.m. to 3:30 p.m. This third annual event will be a day of learning and networking for women involved in agriculture. Our theme is “Overcoming Adversity.” The theme was selected to be a relevant and timely topic as farmers and agriculture face lower commodity prices and economic challenges.

Katie Pinke, publisher of AgWeek and blogger of The Pinke Post, is our keynote speaker.  Her presentation, “Accepting Interruptions to Define Your Path Forward,” will highlight that even the most well-orchestrated plans aren’t exempt from interruptions on the farm or off the farm. In this time of agricultural adversity, Katie will help attendees define their best path forward through life’s pivotal moments. Katie will draw upon trials and triumphs in her personal life and ag business career throughout her presentation.

Breakout sessions will feature five diverse tracks for attendees to choose from: farm business planning, stress management on farms, consumer advocacy, risk management, and farm safety and health. The day will end with a panel discussion with panelists sharing how they have overcome adversity, whether it be a health challenge, weather event, farm transition, or other farm challenge. Below is a list of our breakout sessions and speakers.

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