Farm operators bidding on new land parcels available for cash rent need to check costs and projected break-even yields and prices carefully. So says Blue Earth County educator Kent Thiesse of the University of Minnesota Extension Service.
"Getting caught up in the desire for more land to farm can lead to unrealistic projections," says Thiesse. "It's important to account for all cash and overhead costs of renting the extra land. There may be times when a farm operator is better off to let someone else rent the land rather than pay a high cash rent."
High rental rates are most likely to occur when a landlord makes land available to multiple potential farm operators, says Thiesse. This makes the rental process more competitive.
"Land rental rates tend to be more stable and closer to average rates in ongoing rental agreements or in new agreements that are quietly worked out between a landlord and a new tenant," says Thiesse.
Average land rental rates for 2002 are likely to stay steady with 2001 rates, according to the annual land rental survey in south-central Minnesota, conducted by the U of M Extension Service.
"There is really no justification for sharp increases in land rental rates for 2002," says Thiesse. "Corn and soybean prices remain at some of the lowest levels in several decades. Yields in 2001 were average or below-average in much of Minnesota. Government farm programs have provided a large portion of farm income in recent years. There are currently no provisions for market loss assistance or oilseed payments for 2002, and it appears doubtful Congress will finalize a new farm bill in time for the 2002 crop."
A land rental survey booklet with survey results from 13 south-central Minnesota counties is available from Extension offices in those counties, or by calling 507-389-8325.