Cropland Rental Rates for Minnesota Counties

Prepared by: Gary Hachfeld, Extension Educator, Extension Regional Office Mankato William Lazarus, University of Minnesota Extension Economist, Farm Management Dale Nordquist and Rann Loppnow - Center for Farm Financial Management 7/2011-2

Introduction Land rental rates continue to be of interest to landowners and operators. It is a challenge to determine what rents might be or should be. This publication provides some historical perspective on rental rates actually paid by a group of farms and rental trends over the past five years. This information is meant as a guide and starting point. The information and data is not meant to establish, determine, set, fix, or even hint at what actual rents should be. It is simply a reporting of historical land rental rates in Minnesota. Historical rental data is included for years 2006 through 2010. Average rental rates are listed by county for each year. The 2010 data also includes the th th median cash rent and the 10 and 90 percentile range. There is really no way to statistically project future rental rates. Keep in mind the numbers listed are averages. That means there are rents both above and below the numbers listed. Again, these numbers are merely a starting point. Added new for this year is a column on the right side of the data tables. It includes 2010 county rental data gathered by the USDA National Ag Statistical Service (NASS) in cooperation with the Minnesota Department of Agriculture. The NASS data is collected by mail survey in February and March, with later telephone follow-up. You will notice that most of the numbers align closely with the rental numbers in the preceding columns. The 2012 column in the document is included so you can list your anticipated 2012 land rent. Data Source The land rental data shown in the data tables is extracted from FINBIN, a database of farm record summaries of over 2,400 Minnesota farms. The farmers participate in the Minnesota State Colleges and Universities (MnSCU) Farm Business Management program as well the Southwestern Minnesota Farm Business Management Association. The rental rates reported are their actual rents paid for the years listed. Analysis Method Staff from the Center for Farm Financial Management used FINBIN data to compile the rent data for the years 2006 through 2010. All row crop acres, small grain acres, canning crop acres, etc. are included in the data analysis. Not included in the analysis are acres allocated to pasture, aftermath grazing, all hay and haylage acres, CRP acres, fallow, and prevented planted acres. All normal farming practices for the regions were included in the analysis. The NASS numbers are for row crops only. Data was analyzed by county. Counties with a minimum of 10 farms reporting land rent data for FINBIN are included in the analysis. If a given county does not have rent data listed for 2006-2010, there were not enough farms reporting data. Counties with only partial FINBIN data for 2006-2010 and a NASS number have been included because they now meet the 10 farm minimum criteria. Counties with only a NASS number have less than 10 farmers reporting FINBIN data. Data Results The following two pages show the county data arranged in eight regions consistent with the Minnesota Department of Agriculture, Agricultural Statistics Service districts.

Page 1 of 4

Minnesota Cropland Rental Rates Per Acre

Average 2006 Northwest Becker Clay Clearwater Kittson Mahnomen Marshall Norman Pennington Polk Red Lake Roseau West Central Big Stone Chippewa Douglas Grant Lac qui Parle Otter Tail Pope Stevens Swift Traverse Wilkin Yellow Med. Central Benton Carver Kandiyohi McLeod Meeker Morrison Renville Scott Sherburne Sibley Stearns Todd Wadena Wright n/a 78 n/a n/a 56 41 67 n/a 56 n/a n/a 71 104 65 88 87 44 n/a 80 81 n/a 71 n/a n/a n/a n/a 106 n/a 38 122 120 n/a 125 77 n/a n/a 84 2007 n/a 79 n/a n/a 56 43 69 n/a 58 n/a n/a 78 108 n/a 90 92 65 n/a 85 84 n/a 77 n/a n/a n/a n/a 124 n/a 44 121 109 n/a 130 79 n/a n/a 91 2008 n/a 83 n/a n/a 59 45 73 n/a 62 n/a n/a 81 125 76 102 97 60 n/a 90 98 n/a 87 n/a 39 131 126 135 n/a 43 152 131 n/a 149 89 43 n/a 107 2009 n/a 87 n/a n/a 61 46 79 n/a 61 n/a n/a 87 140 70 117 110 68 n/a 98 106 n/a 87 n/a 44 144 142 152 n/a 35 164 148 n/a 172 105 46 n/a n/a Avg n/a 92 n/a n/a 64 51 85 n/a 63 42 n/a 98 149 76 120 112 82 94 104 105 100 94 n/a 49 161 149 155 128 52 157 140 n/a 192 93 49 n/a n/a

2010 Median n/a 92 n/a n/a 50 45 81 n/a 68 44 n/a 92 124 62 98 115 47 87 99 90 103 90 n/a 31 151 147 150 114 45 160 111 n/a 171 76 41 n/a n/a 10 Pctile n/a 69 n/a n/a 29 25 65 n/a 44 34 n/a 60 93 30 70 75 20 61 61 61 62 70 n/a 21 65 82 105 42 16 117 49 n/a 63 30 25 n/a n/a
th

90 Pctile n/a 110 n/a n/a 74 74 102 n/a 95 50 n/a 148 175 95 125 149 91 116 133 134 112 126 n/a 56 186 185 200 154 69 200 162 n/a 226 145 68 n/a n/a

th

2010 NASS Est. 59 90 26 62 66 62 73 43 72 44 35 94 151 75 98 125 77 85 103 126 102 94 148 50 138 164 164 128 49 163 150 43 168 100 44 27 111

2012 Est. _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____

Page 2 of 4

Average 2006 East Central Aitkin Anoka Carlton Chisago Crow Wing Hennepin Isanti Kanabec Mille Lacs Pine Washington North Central Beltrami Cass Hubbard Itasca Koochiching Lake of Woods Southwest Cottonwood Jackson Lincoln Lyon Murray Nobles Pipestone Redwood Rock South Central Blue Earth Brown Faribault Freeborn Le Sueur Martin Nicollet Rice Steele Waseca Watonwan South East Dakota Dodge Fillmore Goodhue Houston Mower Olmsted Wabasha Winona n/a n/a n/a n/a n/a n/a n/a 32 n/a n/a n/a n/a n/a n/a n/a n/a n/a 107 111 83 92 94 103 n/a 98 n/a 128 113 122 126 103 121 112 109 122 113 114 100 119 117 110 n/a 126 109 117 117 2007 n/a n/a n/a n/a n/a n/a n/a 34 n/a n/a n/a n/a n/a n/a n/a n/a n/a 108 119 107 100 100 117 n/a 104 n/a 136 119 134 n/a 121 133 127 120 129 126 122 n/a 128 130 127 n/a 130 121 n/a 137 2008 n/a n/a n/a n/a n/a n/a n/a 31 n/a n/a n/a n/a n/a n/a n/a n/a n/a 143 146 120 119 120 132 n/a 122 n/a 163 133 152 143 149 158 150 145 146 136 148 121 142 153 144 n/a 153 143 n/a 154 2009 n/a n/a n/a n/a n/a n/a n/a 35 n/a n/a n/a n/a n/a n/a n/a n/a n/a 139 145 152 137 143 140 n/a 140 n/a 171 148 168 171 153 177 161 156 158 145 146 125 155 157 154 n/a 165 145 n/a 152 Avg n/a n/a n/a n/a n/a n/a n/a 37 39 n/a n/a n/a n/a n/a n/a n/a n/a 148 157 n/a 140 154 146 n/a 158 n/a 174 154 173 192 169 181 169 167 166 160 165 185 167 150 163 n/a 178 164 162 148

2010 Median n/a n/a n/a n/a n/a n/a n/a 31 33 n/a n/a n/a n/a n/a n/a n/a n/a 135 156 n/a 140 150 138 n/a 140 n/a 172 150 172 163 142 173 168 152 179 142 150 144 162 134 153 n/a 174 151 151 143 10 Pctile n/a n/a n/a n/a n/a n/a n/a 21 10 n/a n/a n/a n/a n/a n/a n/a n/a 85 100 n/a 106 103 97 n/a 111 n/a 100 115 113 89 89 120 105 84 111 85 114 90 88 89 82 n/a 133 101 79 87
th

90 Pctile n/a n/a n/a n/a n/a n/a n/a 48 61 n/a n/a n/a n/a n/a n/a n/a n/a 174 200 n/a 178 180 201 n/a 189 n/a 212 190 210 285 200 203 236 222 210 206 210 219 214 186 231 n/a 250 238 198 202

th

2010 NASS Est. 21 42 10 49 17 83 42 32 47 24 81 32 17 19 20 24 23 146 155 132 146 158 148 136 156 172 155 148 164 169 154 172 160 160 169 157 166 126 201 141 154 128 184 151 151 147

2012 Est. _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____

Page 3 of 4

Under the 2006-2009 Average data columns, there is historical rent data for those four years. The land rental data listed is an average of all the farms reporting land rent for a specific county and year. Under the 2010 crop year columns, the average rent th is listed. The median or 50 percentile is also presented with half of the rent being less than this amount and half the rents being greater than this th amount. In addition to these numbers, the 10 and th 90 percentile are included to reflect the range of cash rents. Ten percent of the farmers reporting rents th paid less than the rent number listed in the 10 percentile column. Similarly, ten percent of the farmers reporting rents paid more than the rent listed th in the 90 percentile column. The 2010 NASS Estimate data for each county listed is included as a comparison. Every MN county is listed except Ramsey County and the counties in the Northeast Region. Average Annual Change in Rent 2006-10 Following is a table showing average annual changes in land rental rates for the years 2006 through and including 2010 and the one-year change from 2009 to 2010. The calculations are weighted averages to compensate for differences in acres and rental rates from the various counties in each region. The land rental numbers used to calculate the percent change values are also from FINBIN. They are from the same data set used to calculate the county-level average land rental rates for 2006-2010 shown on the previous pages, but they also include farms in all counties in each region. The 2009-2010 annual change data shows a lesser increase than in past years in all but one region. There is no definitive way of determining the cause for this. Therefore, the land rental rates listed are again merely a starting point or guide and not an absolute rental rate. The percentage figures are not meant to predict future increases but are merely to document how regional rental rates have changed over the years. Please note that the land rental rates shown here may not align with rents being paid for new land coming on the market. These rates are the average

amounts actually paid and no doubt include various family and long-term relationships. Average Annual Change in Land Rental Rates Northwest West Central Central East Central Southwest South Central Southeast Summary The land rental rates listed in the data tables are not meant to dictate or determine actual land rental rates. They are simply a listing of the historical land rental data from years 2006-2010 as reported in FINBIN. Keep in mind that these rental rates include both family as well as un-related party land rental contracts as well as long-term rental contracts. Rental rates between family members are generally lower than those between un-related parties. Long-term rental contracts generally do not change dramatically during the length of the contract and therefore may affect the average numbers used in the data calculations. Those who wish to search FINBIN for land rental data specific to a county or region (assuming there are enough farmers reporting rent values) as well as other farm data can do so by going to the following website: www.finbin.umn.edu. Once there, select one of the data categories on the left side of the page for whole farm, crop, or livestock information. Simply select the data you want to retrieve by using the drop-down menus. There are a number of help buttons across the top of the page as well. Once your data choices are selected, click on Generate Report and await your results. If a sufficient number of farms meet your criteria, you will receive a report.

2006-2010 4.4% 7.6% 9.6% n/a 11.4% 9.9% 9.4%

2009-2010 5.0% 6.4% 5.8% n/a 8.2% 5.4% 7.3%

2011 Regents of the University of Minnesota. All rights reserved. University of Minnesota Extension is an equal opportunity educator and employer. In accordance with the Americans with Disabilities Act, this material is available in alternative formats upon request. Direct requests to the Extension Store at 800-876-8636. Printed on recycled and recyclable paper with at least 10 percent postconsumer waste material.

Page 4 of 4