There have been a lot of questions and concerns about 2015 land rental rates. David Bau, Extension Educator in Farm Business Management is presenting over 40 meetings in the next two months to address this hot topic. See more below.
Farmland Rental Rates for 2015 that Work for Both Parties
By David Bau, Extension Educator
I have completed two of 44 farmland rental workshops with most scheduled for November and December. The budgets for 2015 are ugly using current 2015 forward contract prices offered with both corn and soybean budgets in the red. Corn is negative by more than the average rent paid in 2014 and the farmer receiving no labor and management payment. The 2013 average rents in Southern Minnesota were $243 in the FINBIN database and the data provided by the Minnesota Agricultural Statistic Service in September listed the average rents as $227 per acre in 2013 and $237 in 2014.
Today's 2015 forward contract corn price is $3.27 and soybean price is $8.84. The record corn and soybean prices of recent years have significantly impacted land rents. Crop production expenses, farm profits and cropland rental rates all increased during the recent golden era of farming. Projected average input costs for 2015 based on adult farm management numbers for Southern Minnesota in the FINBIN database project to $639 for corn and $306 for soybeans before paying rent and paying no income for farmer labor and management. The numbers are in the red, using 180 bushels of corn per acre at $3.27 per bushel provides a gross income of $588.60 compared to $639 expense leave a loss of over $50 per acres before paying any rent. Using 50 bushels for soybeans at $8.84 generates $442 gross income, leaves $136 after $306 of expenses, to share between the farmer for labor and landlord for rent. Read more at: http://z.umn.edu/pz0
Meeting dates are at: http://z.umn.edu/pz1