Houston County land rent shows slight increase

By Jerrold Tesmer

Fri, Dec 14th, 2012
Posted in All Agriculture

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Jerrold Tesmer, Extension Educator for Fillmore/Houston Counties

Based on the results of the recently completed Houston County Land Rent Survey, farmland rent continued to increase. There were seventy usable surveys exactly the same as last year. However, there were considerable more acres this year with 7,241 compared to 4,935 acres of tillable crop land last year. I want to thank all those that responded to the flyer. Due to budget cuts at USDA, the Houston County FSA Office was unable to do the traditional newsletter mailing.

The range of survey responses for 2012, were from $50 to $375 /tillable acre. The 2012 average rent per tillable acre reported was $159.32 /acre, slightly lower than the 2012 projection of $162.45 in last year’s survey. The projection for 2013 is $173.75 /acre. No one projected a rental decrease.

While preparing for the Land Rent Workshops held last month I looked at average increase in Houston County land rent. From 2005-2007 the land rent basically had no change. The increases have been in the last five years, 2008 - 2012 Since 2008, the increase has averaged $11.88/acre/year or close to 10 percent. I question whether a 10 percent yearly increase is sustainable!

75 percent of those who filled out the survey form responded to the question, Operator or Landowner. Of those that did fill in that box, 83 percent were landowners.

I started breaking out the results by parcel size a few years ago. The survey showed parcels of less than 20 acres averaged $137.46 /acre, while those parcels from 20-79 acres in size averaged $169.81. It would appear small parcels are discounted $22/acre while the mid-size parcels were not discounted at all.

Other information gathered with the survey include: 24 percent rent from a family member, and averaged $142.29 /acre; 16 percent have other facilities such as grain bins or pole sheds included. Grain bins were the most common item mentioned.

When rental payments are made is also of interest. The most common remains a first half payment in the spring and the second half in the fall.

Completed responses included:

½ spring, ½ fall 73%

All fall 14%

All Spring 12%

Other Schedules 1%

2005-2013 Houston County Land Rental Survey Results

2005 Average Cash Rent Reported: $98.55 /tillable acre

2006 Average Cash Rent Expected: $98.45 /tillable acre

Range of Responses: $22.00 - $130.00 /tillable acre

2006 Average Cash Rent Reported: $101.97 /tillable acre

2007 Average Cash Rent Expected: $ 99.43 /tillable acre

Range of Responses: $16.00 - $135.00 /tillable acre

2007 Average Cash Rent Reported: $99.88 /tillable acre

2008 Average Cash Rent Expected: $98.83 /tillable acre

Range of Responses: $40.00 - $180.00 /tillable acre

2008 Average Cash Rent Reported: $124.53 /tillable acre

2009 Average Cash Rent Expected: $129.38 /tillable acre

Range of Responses: $40.00 - $200.00 /tillable acre

2009 Average Cash Rent Reported: $126.42 /tillable acre

2010 Average Cash Rent Expected: $126.08 /tillable acre

Range of Responses: $22.00 - $200.00 /tillable acre

2010 Average Cash Rent Reported: $138.46 /tillable acrre

2011 Average Cash Rent Expected: $142.45 /tillable acre

Range of Responses: $10.00 - $210.00 /tillable acre

2011 Average Cash Rent Reported: $157.17 /tillable acre

2012 Average Cash Rent Expected: $162.45 /tillable acre

Range of Responses: $37.50 - $300.00 /tillable acre

2012 Average Cash Rent Reported: $159.32 /tillable acre

2013 Average Cash Rent Expected: $173.75 /tillable acre

Range of Responses: $50.00 - $375.00 /tillable acre

This is my eighth year for the Houston County Land Rent Survey. Each year, something unique appears. This is only the second time that the reported rents came in lower than the projected rents from the previous year’s survey.

There were responses from sixteen townships, so a good cross section of Houston County. 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 Houston County Extension Office at 507-725-5807 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 Houston 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.” They do not list Houston County separately due to a lack of Farm Management participants in Houston County, but you can see results from other counties. 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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