Agricultural commodity prices have risen sharply over the past two years, fueling significant increases in cash rent bids. We advise both landowners and tenants to make inquiries with local farm loan officers and county Extension agents to inquire what rental rates they’re seeing both on leases in which there is no change in the owner or tenant, and in leases in which there is no legacy relationship.

Surveys of market conditions through this year’s first half indicate pasture rents are up 10-31% from a year ago across the West Central Plains, while rates softened 4% in Colorado, New Mexico and Wyoming. Ranchland lease rates range from $62/acre in Nebraska, $50/acre in western Missouri, $24/acre in Kansas, $17/acre in Oklahoma, and average $13/acre across Colorado, northern New Mexico and Wyoming, according to bankers surveyed by the Federal Reserve.

At midyear, bankers say pasture lease rates in the North Central U.S. ranged from up 9-12% year over year in South Dakota and Minnesota, to down 6% in North Dakota. Bankers says rents averaged $75/acre in Minnesota, $50/acre in South Dakota, and $19/acre in North Dakota.

Across the Midwest and Mid-South, pasture rents range from $65/acre in southern Illinois, $58/acre in western Tennessee, $55/acre in western Kentucky, $53/acre in eastern Missouri, $41/acre in Arkansas, and $40/acre in northern Mississippi, according a June survey by the St. Louis Federal Reserve Bank.

A midyear survey by the Illinois Society of Professional Farm Managers and the University of Illinois estimated the average statewide charge for pasture rents at $40/acre. We’ve seen hay ground leases ranging from $84/acre in Montgomery County to $130/acre in DuPage County.

A final caveat: Every land parcel has unique characteristics, so don’t rely on survey data as a precise benchmark for establishing rent rates on individual land parcels. These results are more useful as a guide to local trends.

Mike Fritz is editor and publisher of Farmland Investor Letter®. Reach him at m_fritz@charter.netor visit www.farmlandinvestorletter.com.