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Is the land rent bubble starting to boil?


Thu, Dec 22nd, 2011
Posted in Agriculture

Last year, I started out by asking if we were looking at a land rent bubble. A couple of weeks ago I completed the Houston County Land Rent Survey, and now have results from the Fillmore County Land Rent Survey. In those two surveys, not one landlord or renter projected rents to decline from 2011 to 2012. With the new Fillmore County Land Rent Survey results, I may have been premature thinking we had a land rent bubble last year.

In addition to those that responded to the land rent survey, I would like to thank Tammy Martin, FSA Director, for doing the mailing with the FSA newsletter. The response numbers were down slightly with 118 usable parcels which totaled 11,697 tillable acres.

In the survey, I asked for both the 2011 actual rent paid and a 2012 projected price per acre. To jump to the bottom line, the average rent reported paid in 2011 was $189.08 per tillable acre. Rent for 2012 is projected at $210.00 per acre. We also had a huge range, from $50 - $420 per acre.

This is the sixteenth consecutive year for the Fillmore County Land Rent Survey. In eleven of those years the actual rent reported in the following years survey was higher than projected, in five years, it was less than projected. I'm looking forward to next year's survey to see what happens.

The last few years, I have sorted by acreage size and have seen similar discounts. Parcels 20 acres or less received $172.10 per acre. Those from 21-up to 80 acres averaged $163.40 per acre. For 2011, that is about a $17 discount for small parcels. I was surprised and have no explanation why the mid-sized parcels were discounted $26 so a greater discount than the small parcels.

When rental payments are made is also of interest. Remaining the most common by far is the first half payment in the spring and the second half in the fall.

Completed responses included:

½ spring, ½ fall 65 percent

All spring 18 percent

All fall 5 percent

Other 11 percent (monthly, 1/3-2/3, quarterly, etc.)

When I look at the 2011 cash rent reported at $189.08 and compare it to the 1996 cash rent reported in the original survey of $75.00 per acre, it works out to an average increase of $7.13/acre/year. Much of that increase came in the last few years.

Other information gathered with the survey include: 13 percent rent from a family member, and averaged $145.05 /acre; 9 percent have other facilities such as grain bins or pole .....
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64

Winter Crops Day returns to Caledonia

Fri, Dec 16th, 2011
Posted in Agriculture

Ag Producers in southern Minnesota just finished a season that included a wet spring, a hot summer, and a dry fall. No one knows what is in store for the 2012 season, but crop management decisions are underway now, and that will be the focus of the ..... 
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Winter Crops Day returns to Caledonia

Fri, Dec 16th, 2011
Posted in Agriculture

Ag Producers in southern Minnesota just finished a season that included a wet spring, a hot summer, and a dry fall. No one knows what is in store for the 2012 season, but crop management decisions are underway now, and that will be the focus of the ..... 
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Houston County land rent survey mirrors national trend

Thu, Dec 15th, 2011
Posted in Agriculture

Based on the results of the recently completed Houston County Land Rent Survey, the farmland rent trend mirrors the rest of the nation. Participation increased to sixty-eight usable parcel surveys representing 4,935 acres of tillable crop land. I es ..... 
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AgStar Financial Services making changes in Preston

Fri, Dec 9th, 2011
Posted in Agriculture

Preston, Minn.- There's a new look in downtown Preston. The AgStar Financial Services awning has been replaced by a Lookout Ridge Consulting awning. Not to worry, Lookout Ridge Consulting is a division of AgStar that covers tax, accounting, successi ..... 
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2011 Research results available

Fri, Dec 9th, 2011
Posted in Agriculture

The results from a number of University of Minnesota 2011 research trials are becoming available. I have received individual results on MN Corn Hybrid Performance Trials, Corn Response to Micronutrients across Minnesota, Soybean Response to Micronut ..... 
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Farm service agency news

Fri, Dec 9th, 2011
Posted in Agriculture

Foreign persons must report U.S. agricultural land holdings

Preston, MN - Nov 25, 2011 - Fillmore County USDA Farm Service Agency (FSA) Executive Director, Tammy Martin, reminds foreign persons with an interest in agricultural lands in the U ..... 
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Fillmore County farmer tells his story

Fri, Dec 9th, 2011
Posted in Agriculture

Chatfield, MN-December 5, 2011-Fillmore County farmer Eric Thorn can't imagine working any career other than farming, and he wants to share his passion for the farming lifestyle with others. That is why he has joined a group of Minnesota farmers in ..... 
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Ag statistics has many stories to tell

Fri, Nov 25th, 2011
Posted in Agriculture

Russ Krech was right! Years ago, I would often bring up the fact that Fillmore County was Number One in beef cows. Russ Krech, retired Houston County Ag Agent, would always come back with the statement that on a tillable acre basis Houston County ha ..... 
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