Farmland Rental Resources

What cash rental rate is fair? - by Greg LaBarge, Fulton County Ag & Natural Resources Educator

One of the most frequently asked questions is "What cash rental rate is fair?" The question is asked by both landlords and tenants. The issue has two side that should be viewed as exactly that a question with two answers, with each party figuring out cost and returns for their investment. While everyone would like it to be one rate that fits all, the reality is every situation is different. It truly is a negotiation that needs to happen with each transaction.

For the landlord, the DIRTI five cost of ownership provide a baseline. The ownership costs are Depreciation, Interest, Return on investment, Taxes and Insurance which provides a starting point for negotiations. Considerations should also be given for things a tenant might do such as weed control on non-tillable acres, snow removal and other task that have value to the landlord.

From a tenant view, input cost of producing the crop, transportation, marketing, plus returns to the capital investment in machinery, management and labor need to be covered. The tenant will want to know the value of extra things they may do that adds or maintains the value of the land for the owner.

Below is a listing of resources from The Ohio State University and other land grant universities you will find useful as you evaluate a fair rent for your farm.

Some general legal requirements for lease enforceability that both a tenant and landlord should be aware of based on Ohio law are based on the length of the agreement:

 

 

 

 

Term

Legal Requirements
Up to 1 year Verbal can be enforceable
1 to 2 years Must be in writing and signed by the parties
2 to 3 years Must be in writing, signed by the parties, notarized, and recorded in the county where the land is located
3 years or more Must be in writing, signed by the parties before two witnesses, notarized, and recorded in the county where the land is located

 

 

 

Determining Cash Rental Rates


Surveys of Cash Rental Rates

Ohio Farmland Cash Rental Survey 2008-09 State Summary from Ohio State University Extension

2008 Ohio Average Rental from National Ag Statistics Service

Ohio Farmland Cash Rental Survey 2007-08 from Ohio State University Extension

Ohio Farmland Cash Rental Survey 2006-07 from Ohio State University Extension
Ohio Cash Rents-2008 from Ohio Agricultural Statistics Service 8/2008
Ohio Cash Rents-2007 from Ohio Agricultural Statistics Service
Indiana Cash Rental Survey-2007
Iowa Cash Rental Survey-2007

Surveys of Land Prices

Ohio Land Value Survey 2006-07 from Ohio State University Extension
Ohio Land Value 2008 from Ohio Agricultural Statistics Service 8/2008
Ohio Land Values 2007 from Ohio Agricultural Statistics Service
An Overview of US Farm Real Estate Markets-October, 2006 publication of Ohio State University Ag Economics
Ohio Farm Real Estate Markets, 2003 publication of Ohio State University Ag Economics

Computer Programs to Determine Lease or Land Values

Excel Spreadsheet-Rent Calculator from Ohio State University Extension
Landbid-Land Value Calculator from Ohio State University Extension
Fair Rent  from Center for Farm Financial Management

Crop Production Cost and Yields

Corn Production Budgets
Soybean Production Budgets
Wheat Production Budgets

Crop Yields by County in Ohio from Ohio Agricultural Statistics Service
Fulton County Ohio 10 year Crop Yield History

General Land Rental Agreement Information

Legal and Management Aspects of Ohio Farmland Leases, FR-0001-01
Flexible-Cash Rents for Farmland, FR-0002-01 
Farm Rental Agreement Checklist, FR-0003-01
Managing Landlord-Tenant Relationships: A Strategic Perspective, FR-0004-01
Crop Share Leasing in Ohio, FR-0005-01
Tax Issues for Farm Rental Agreements, FR-0006-02
Leasing Farm Buildings and Livestock Facilities, FR-0007-02
Establishing a Fair Pasture Rental Rate, FR-0008-06
Flexible Cash Rents Based on Crop Insurance Parameters

Sample Agreements and Other Information

Fixed and Flexible Cash Rental Arrangements for Your Farm-General Information
Cash Farm Lease-sample agreement
Crop Share or Crop Share-Cash Rental Agreements for Your Farm-General Information
Crop Share or Crop Share-Cash Lease-sample agreement

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