"If you add up the revenues and subtract the cost estimates, which should include operating costs such as fertilizer, seed, chemicals, as well as labor and machinery overhead, you are left with an estimate of the amount of money remaining for the land," Dobbins says. "Economists like to think about land as being the residual claimant, so it gets what's leftover after everything else has been paid. This is one way to arrive at an estimate of what one can afford to pay for a cash rent."

For landlords who don't have access to that much information, simpler methods are used to determine a cash rent, such as collecting information from surveys, Dobbins says.

The U.S. Department of Agriculture conducts an annual survey of cash rents for the state of Indiana. Purdue's department of agricultural economics also conducts an annual land values and cash rents survey.

"Using survey data doesn't require as much information as trying to estimate what the returns are going to be, so this is an approach used by many," Dobbins says. "The surveys provide a general sense of the direction cash rents are going, as well as the level that rents are at in broad general geographical areas."

He also said people can use the first method to try and calculate the cash rent and then compare that number to a survey.

"If you end up with a number similar to what the survey shows, you can feel pretty good that it's a reasonable number," Dobbins says.

Another approach is to talk with other local landowners whose farms are of similar productivity and find out what their cash rent agreements are.

"If you want to know what the market would provide, there is always the option to put your farm up for bids," Dobbins says. "This could generate more interest than you want, but is probably the most precise way of knowing what the market is willing to provide for your particular property."