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Purdue University releases results of 2021 land rent survey
Throughout the year, many individuals ask what the “going rate” is for farmland rental prices. That is a difficult question to answer. The rate fluctuates and is highly dependent on the individual farm ground being discussed.
That is why when asked, Purdue Extension provides a range of values based on the annual Purdue Farmland Value Survey and stresses the importance of not simply utilizing the values given. Instead, landlords and tenants are told the final rental amount will need to be adjusted based on numerous items, including the size of the field, drainage, soil fertility, ease of access for farm equipment and much more.
As a whole, the 2021 Purdue Farmland Value Survey found the average value of bare Indiana cropland improved. The average value of bare Indiana cropland ranged from $6,441 per acre for poor-quality land (a 12.1-percent increase from 2020) to $9,785 per acre for top-quality land (a 14.1-percent increase from 2020). The average corn yield for poor-quality land was 153 bushels per acre and 212 bushels per acre for top-quality land.
The 2021 survey average for Indiana cash rent increased. On average, cash rents ranged between $183 per acre for poor-quality land and $269 per acre for top-quality land. Cash rents increased by 4.6 percent for poor-quality land and 3.9 percent for top-quality land since June 2020.
The value for farmland moving out of agriculture (transition land) increased this year. The survey revealed there was a 17.4-percent increase in the average value of transition land since June 2021. The average value of transition land in June 2021 was $17,759 per acre. The average value of recreational land increased by 93.1 percent since June 2021. The average value of recreational land in June 2021 was $7,486 per acre. It is important to note that transition and recreational land values are quite volatile and have a wide range of values.
For individuals in our area, it is probably of more importance to look at the results for the West Central Region. The West Central Region (consisting of Benton, Carroll, Fountain, Montgomery, Parke, Putnam, Tippecanoe, Vermillion, Warren and White counties), had cropland values that ranged from $7,849 per acre for poor-quality land and $10,970 per acre for top-quality land. Cash rents for the West Central Region varied from $222 per acre for poor-quality land to $302 per acre for top-quality land (average quality land was $262 per acre). For the West Central Region, cash rent values increased from 2020 to 2021. The average corn yield for poor-quality land was 165 bushels per acre and 217 bushels per acre for top-quality land in this region.
Producers may also want to look at values for the Southwest Region due to the similarities in topography and soil productivity. The Southwest Region (consisting of Clay, Daviess, Dubois, Gibson, Greene, Knox, Martin, Owen, Pike, Posey, Spencer, Sullivan, Vanderburgh, Vigo and Warrick counties), had cropland values that ranged from $5,965 per acre for poor-quality land and $11,696 per acre for top-quality land. Cash rents for the Southwest Region varied from $164 per acre for poor-quality land to $288 per acre for top-quality land (average quality land was $225 per acre). For the Southwest Region, cash rent values increased from 2020 to 2021. The average corn yield for poor-quality land was 145 bushels per acre and 219 bushels per acre for top-quality land in this region.
To obtain your own copy of the 2021 Purdue Farmland Value Survey, contact your local Extension office or go to https://ag.purdue.edu/agecon/Pages/Purdue-Agricultural-Economics-Report-Archive..... As a reminder, the values and information found within the survey should be adjusted for your individual situation when determining your rental agreement.
Visit www.extension.purdue.edu/putnam or contact the local Extension office at 653-8411 for more information regarding this week’s column topic or to RSVP for upcoming events. Office hours are Monday through Friday from 8 a.m.-noon and 1-4 p.m. Evening and lunch appointments are available upon request.
Upcoming Events
Aug. 24 – State Fair project pick-up (Extension office dropped off), Extension office
Sept. 2 – Staying Scam-Safe, 6 p.m., Putnam County Fairgrounds, register at 653-8411
Sept. 7, 14, 21, 28 – Fall walking group, 9 a.m., Big Walnut Sports Park, register at 765-301-7641
Sept. 22 – Recognizing Hazards Around the Farm webinar, 12 p.m., register at https://tinyurl.com/WIAWebinars21
Sept. 27 – ServSafe one-day class and online exam, 9 a.m.-4 p.m., Putnam County Fairgrounds, register at https://purdue.edu/servsafe/workshops