Finding a fair cash rent for non-irrigated farmland is hard enough, but what about pasture land, irrigated farmland, hay ground and on-farm storage?
In the February 2017 issue of Purdue Agricultural Economics Report, Craig Dobbins, professor of Agricultural Economics, along with research associate, Kim Cook, authored an article on this subject, based on data collected in 2016.
Dobbins reiterated the difficulty in obtaining data in sufficient quantities to report reliable findings.
“Estimates for the rental value of irrigated farmland, pasture land, hay ground and on-farm grain storage in Indiana are often difficult to locate,” he said. “For the past several years, questions about these items have been included in the Purdue Farmland Value Survey.”
He cautioned that the figures he reported came with relatively few responses. Dobbins reported averages for pasture rent, the market value and cash rent for irrigated farmland, and the rental of on-farm grain storage.
“The rental rate for grain bins includes the situation where there is just a bin and the situation where there is a bin and utilities,” he said.
He also reports rental rates for established alfalfa-grass, and grass, hay ground.
Information from prior years’ surveys can be found in the Purdue Agricultural Economics Report archive, ag.purdue.edu/agecon/Pages/Purdue-Agricultural-Economics-Report-Archive.aspx. This information can generally be found in the August issues beginning in 2006.
For the purposes of this article, I will primarily report data that Dobbins offered for northeast Indiana. Other areas of Indiana were included in the full report, available at: ag.purdue.edu/agecon/Pages/Purdue-Agricultural-Economics-Report.aspx. Northeast Indiana in this report would include counties from LaGrange south to Delaware, then north and east to the Michigan and Ohio borders. It would include Noble and Whitley counties.
For pastureland, Dobbins received only 10 responses in northeast Indiana.
The average annual rent from those responses was $98 per acre. The state average, with 76 total responses, was $74 per acre. The lowest average rental rate for pastureland was in the southeast at $48/acre.
For irrigated farmland, Dobbins received just eight responses in northeast Indiana.
The average corn yield for these fields was 220 bushels per acre, with an average cash rent per acre of $255. The state average, with only 34 total responses, was $288/acre.
For on-farm grain storage rental, 14 responses came from northeast Indiana. The average rent for bins only (no electric utilities) was 14 cents per bushel. Rates for bins and electric utilities garnered 12 responses, at a rate of 21 cents per bushel.
State averages, with 76 and 66 responses, respectively, mirrored these rates.
Rental of established alfalfa or alfalfa/grass hay fields in northeast Indiana received 11 responses, with an average rent per acre of $159. Nine responses for established grass hay saw an average rental of $112 per acre.
Again, with a small sampling number, these figures may not accurately reflect local rates.
John Woodmansee is an Extension Educator in Whitley and Noble counties.