As the total amount of farmland across the country slowly shrinks , accord to the USDA ’s 2007 Census of Agriculture , the note value of the stay farming area has increased , due in part to higher craw demand and rise commodity Price , especially in the wake of the massive drouth that strike much of the country in 2012 .
landowner are responding by raise farmland rental prices , and the project 2013 value are on track to exceed the record high of 2012 . Dennis Stein , farm - commercial enterprise - management pedagog for the Michigan State University Extension , articulate that farmland letting rate have increase an average of 30 percent or more between 2008 and 2012 .
“ We are seeing that the 2011 numbers racket increase for 2012 and will continue [ to do so ] into early 2013 as farm incomes continue to increase , ” Stein says .
Despite the project 2013 rental charge per unit increase , some renter will see either no variety or potentially even a decrease in rent .
“ The farm that will see low numbers will be those farms that are entering into multi - year agreements during 2013 , as we are now facing major changes in the future good market prices , ” Stein notes . “ These change in succeeding food market price will force some farm to readjust body politic rents being offered to stay profitable . ”
Land letting pace are influenced by three primary factors : commodity price , atmospheric condition condition and home tilled land value . Because of 2012 ’s untoward weather conditions , national good prices for three major crops grow dramatically , though they are currently on a little decline .
“ Farm commodity prices that are currently being offered for corn , soybeans and wheat are 25 to 30 per centum downhearted than those farm have been have the last several months , ” Stein say .
Additionally , most states across the nation have view an increase in farmland value between 2011 and 2012 , while some New England and southeastern states have either see no pregnant modification or a decrease in land value , harmonise to the USDA ’s annual Land Values Summary . The Farm Bill , which Congress recently gave a 9 - month extension service as part of its financial drop dialogue at the end of 2012 , also has the potentiality to affect farmland renting rates , depending on the creation and passage of a unexampled visor in 2013 .
Stein advocates farm operators and property owner to participate into a flex letting arrangement , which accounts for fluctuating market time value and unsure crop yield by determining a rental monetary value after a harvest is harvest .
“ Flex rip allow for the [ establishment ] of a clean base soil rental note value that both the landowner and farm operator can live with , adding in a rule that would allow for the rental defrayal to increase if the 2013 craw comes in with a [ higher - than - expect ] gross income , ” he says .
He also advises farm operators and landowners that the projection rate increment does not necessarily mean that single tear agreements have to empale .
“ No trend changes everyone at the same clip , and that is true with land rents and land values , ” he says .
The 2012 USDA Census of Agriculture , which recently had its initial Feb. 4 , 2013 , deadline stretch out to allow for more response , will provide extra data for next rental charge per unit projections once the finding are released . Farmers who pull in or had the voltage to earn at least $ 1,000 from their agriculture trading operations were required by law to fill up out the nosecount .
