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 2020 Purdue Farmland Value Survey found the average value of bare Indiana cropland improved. The average value of bare Indiana cropland ranged from $5,746 per acre for poor quality land (a 6.3% increase from 2019) to $8,579 per acre for top quality land (a 4.5% increase from 2019). The average corn yield for poor quality land was 152 bushels per acre and 207 bushels per acre for top quality land.
The 2020 survey average for Indiana cash rent increased. On average, cash rents ranged between $175 per acre for poor quality land and $259 per acre for top quality land. Cash rents increased by 5.4% for poor quality land and 4.0% for top quality land since June of 2019.
The value for farmland moving out of agriculture (transition land) increased this year. The survey revealed there was a 14.2% increase in the average value of transition land since June of 2019. The average value of transition land in June 2020 was $15,127 per acre. The average value of recreational land increased by 5.5% since June of 2019. The average value of recreational land in June 2020 was $3,876 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 $6,707 per acre for poor quality land and $9,308 per acre for top quality land. Cash rents for the West Central Region varied from $212 per acre for poor quality land to $293 per acre for top quality land (average quality land was $252 per acre). For the West Central Region, cash rent values increased from 2019 to 2020. The average corn yield for poor quality land was 163 bushels per acre and 217 bushels per acre for top quality land in this region.
Producers may also want 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 $4,967 per acre for poor quality land and $9,150 per acre for top quality land. Cash rents for the Southwest Region varied from $161 per acre for poor quality land to $269 per acre for top quality land (average quality land was $216 per acre). For the Southwest Region, cash rent values increased from 2019 to 2020. The average corn yield for poor quality land was 148 bushels per acre and 211 bushels per acre for top quality land in this region.
The current COVID-19 pandemic has had significant impact on many industries within the United States and around the globe, including our local agricultural community. With that said, the 2020 Purdue Farmland Value Survey did notice a slight decline in farmland prices since December, which may reflect changes within the economy due to COVID-19. In fact, many survey respondents emphasized the uncertainty related to the current pandemic and expect declines to continue.
To obtain your own copy of the 2020 Purdue Farmland Value Survey, contact your local Extension Office or go to: <https://ag.purdue.edu/agecon/Pages/Purdue-Agricultural-Economics-Report-Archive.aspx>. As a reminder, the values and information found within the survey should be adjusted for your individual situation when determining your rental agreement.
Visit our homepage at www.extension.purdue.edu/putnam or you can contact the local Purdue Extension Office by calling 765.653.8411 for more information regarding this week’s column topic or to RSVP for upcoming events. It is always best to call first to assure items are ready when you arrive and to RSVP for programs. While many publications are free, some do have a fee. Purdue University is an equal access/equal opportunity institution. All times listed are Eastern Time.
August 29 – Life Cycles Bicycle Donation Day – Greencastle Farmer’s Market – 9AM-12PM
September 1, 8, 15, 22, 29 – Steps in September – Big Walnut Sports Park – 9AM
September 4 – Jr. Leader Manual Due to Extension Office
September 4 – My Record of Achievement Due to Extension Office
September 7 – Extension Office closed in observance of Labor Day
September 19 – Life Cycles Bicycle Donation Day – Greencastle Farmer’s Market
September 28 – ServSafe Food Managers Exam – limited space – 9AM-12PM – register