Fillmore land rent continues upward trend!

By Jerrold Tesmer

Fri, Dec 7th, 2012
Posted in All Agriculture

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While preparing for the Land Rent Workshops held last month, I looked at average increase in Fillmore County land rent. From 1996-2007 the average increase was $2.69/ acre/year, or about the rate of inflation. Since 2008, the increase has averaged $21.75/acre/year or about 10 percent. I question whether a 10 percent yearly increase is sustainable!

Like many government agencies facing a budget crunch, FSA is no longer sending out newsletters. That required a change in how we distributed the land rent survey. I would like to thank those that did respond! We had slightly fewer responses this year with 101 usable parcels which totaled 10,174 tillable acres.

In the survey, I asked for both the 2012 actual rent paid and a 2013 projected price per acre. The average rent reported paid in 2012 was $210.94 per tillable acre, very close to the $210.00 projected in last year’s survey. Rent for 2013 is projected at $234.25 per acre. We also had a huge range, from $59 - $450 per acre.

This is the seventeenth consecutive year for the Fillmore County Land Rent Survey. In twelve of those years the actual rent reported in the following years survey was higher than projected, in five years it was less than projected.

1996-2012 Fillmore County Land Rental Survey Results

1996 Average Cash Rent Reported: $75.00 /tillable acre

1997 Average Cash Rent Expected: $78.00 /tillable acre

Range of Responses: $52.00 - $100.00 /tillable acre

1997 Average Cash Rent Reported: $81.00 /tillable acre

1998 Average Cash Rent Expected: $82.00 /tillable acre

Range of Responses: $50.00 - $110.00 /tillable acre

1998 Average Cash Rent Reported: $84.95 /tillable acre

1999 Average Cash Rent Expected: $85.29 /tillable acre

Range of Responses: $17.00 - $120.00 /tillable acre

1999 Average Cash Rent Reported: $86.95 /tillable acre

2000 Projected Cash Rent: $85.77 /tillable acre

2000 Average Cash Rent Reported: $89.85 /tillable acre

2001 Projected Cash Rent: $91.64 /tillable acre

Range of Responses: $39.00 - $135.00 /tillable acre

2001 Average Cash Rent Reported: $93.22 /tillable acre

2002 Projected Cash Rent: 95.81 /tillable acre

Range of Responses: $50.00 - $135.00

2002 Average Cash Rent Reported: $98.10 /tillable acre

2003 Projected Cash Rent: $101.71 /tillable acre

Range of Responses: $38.00 - $135.00

2003 Average Cash Rent Reported: $98.91 /tillable acre

2004 Projected Cash Rent: $101.15 /tillable acre

Range of Responses: $70 - $150

2004 Average Cash Rent Reported: $100.60 /tillable acre

2005 Projected Cash Rent: $102.09 /tillable acre

Range of Responses: $18.18 - $145.00

2005 Average Cash Rent Reported: $110.09 /tillable acre

2006 Projected Cash Rent: $112.49 /tillable acre

Range of Responses: $75.00 - $140.00

2006 Average Cash Rent Reported: $106.95 /tillable acre

2007 Projected Cash Rent: $108.56 /tillable acre

Range of Responses: $75.00 - $140.00

2007 Average Cash Rent Reported: $104.62 /tillable acre

2008 Projected Cash Rent: $110.32 /tillable acre

Range of Responses: $73.00 - $150.00

2008 Average Cash Rent Reported: $133.62 /tillable acre

2009 Projected Cash Rent: $145.43 /tillable acre

Range of Responses: $50.00 - $250.00

2009 Average Cash Rent Reported: $152.89 /tillable acre

2010 Projected Cash Rent $156.48 /tillable acre

Range of Responses: $60.00 - $230.00

2010 Average Cash Rent Reported: $150.62 /tillable acre

2011 Projected Cash Rent: $168.28 /tillable acre

Range of Responses: $50.00 - $400.00

2011 Average Cash Rent Reported:$189.08 /tillable acre

2012 Projected Cash Rent: $210.00 /tillable acre

Range of Responses: $50.00 - $400.00

2012 Average Cash Rent Reported: $210.94 /tillable acre

2013 Projected Cash Rent: $234.25 /tillable acre

Range of Responses: $59.25 - $400.00

The last few years I have sorted by acreage size and have seen similar discounts for smaller parcels. Those parcels 20 acres or less received $137.60 per acre rent for 2012. Those from 21-up to 80 acres averaged $186.82 per acre. For 2012, that is about a $73.34 discount/acre for small parcels. The mid-sized 21-81 acre parcels were discounted $24.12/acre.

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. There has been a trend for more spring or upfront payments, when the survey was started in 1996, six percent was paid in the spring.

Completed responses included:

½ spring, ½ fall 61%

All spring 24%

All fall 6%

Other 9% (monthly, 1/3-2/3, quarterly, etc.)

Other information gathered with the survey include: 18 percent rent from a family member, and averaged $145.05 /acre; 16 percent have other facilities such as grain bins or pole sheds included. 22 percent report having some sort of flex-lease.

For those townships with three or more responses, I do a township average and range. To discuss these results or receive a copy, contact the Fillmore County Extension Office at 507-765-3896 or tesme001@umn.edu, or check the University of Minnesota Extension website at www.extension.umn.edu scroll down the page, near the bottom it says “Offices,” click and the Minnesota map will appear, click on Fillmore County.

Another source of land rent information is at the Center for Farm Financial Management at www.cffm.umn.edu click on Publications, then Farm Management, and finally “Rental Rates for MN Counties – 2012.” These numbers are extracted from FINBIN -- a database of farm record summaries of nearly 2,400 Minnesota farmers. The farmers participate in the Minnesota State Colleges and Universities (MnSCU) Farm Business Management program as well the Southwestern and Southeastern Minnesota Farm Business Management Associations.

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