By Ryan Drolette
With over half of Iowa’s farmland under some form of lease agreement, leasing is a key issue for the state’s tenants and landowners to understand. Because of this prominence, Iowa State University Extension and Outreach has made leasing a key component to its educational efforts.
After a peak in the statewide average for cash rents on cropland acres of $270 in 2013, cash rents have been slowly declining. Even with prices down, an estimated $3.6 billion changed hands through rental agreements in 2015.
The decline in cash rent prices has not decreased to the same degree as agricultural revenues. Because of this there is increased pressure on farm operations with a large portion of their acres under a rental agreement. ISU Extension and Outreach farm management specialists provide an unbiased look at the current farm situation for all parties involved in farmland lease agreements.
ISU Extension and Outreach will hold 2016 Farmland Leasing Meeting sessions during the months of July and August across Iowa. This year’s meetings will focus on land values and cash rent trends, cost of production, methods for determining a rental rate, legislative updates regarding leases and communicating with tenants or landlords.
The 2.5 to 3-hour workshop is designed to assist landowners, farm tenants and other agri-business professionals with current issues related to farmland ownership, management and leasing arrangements. Attendees will gain a better understanding of factors driving next year’s rents such as market trends and input costs.
A 100-page workbook is provided for the programs, with resources regarding land leasing agreements such as surveys, sample written lease agreements and termination forms along with many other publications.
The leasing meetings being held across Iowa are facilitated by farm management specialists with ISU Extension and Outreach. A listing of county extension offices hosting the meetings is available on the Ag Decision Maker website.
For registration information, contact local ISU Extension and Outreach county offices. Pre-registration is encouraged as an additional $5 fee may be added if registering less than two calendar days before the meeting date.
The Ag Decision Maker leasing section also provides useful materials for negotiating leases, information on various types of leases, lease forms, and newly updated Decision Tools.
Because of leasing’s importance in the ag economy, ISU Extension and Outreach held over 80 meetings focused on farm leasing during the summer of 2015 and will do so again over the coming weeks. Over 1,800 people participated in the meetings last year. ISU Extension and Outreach online resources were also extensively used, with the ISU Cash Rent Survey having 164,234 downloads and example cash lease forms being downloaded 138,820 times.
Six months after the 2015 meetings concluded, attendees were surveyed in an effort to gain additional insight into rental markets and trends. The farm management team found that 21 percent of attendees participated to gain information for communicating with other parties involved in the rental agreement. Additionally, 95 percent said they were happy with the effectiveness of the leasing programing being done by ISU Extension and Outreach.
The data collected showed on-going satisfaction with 61 percent of respondents having attended a farmland leasing meeting in a prior year, with 44 percent attending multiple times in the past.
The survey asked for changes attendees planned to make in their lease agreements. Nearly one third – 30 percent – of respondents said they planned to decrease rent. Nine percent decided to move from an oral lease to a written lease agreement while nine percent also pledged to implement new conservation strategies.
Source:iastate.edu