Fall is generally a time when farmers and ranchers begin thinking about next year’s business decisions. During the fall, farmland and pasture leases are typically agreed to for the following year. We generally field several questions on this topic so a discussion on some resources to help with the decision-making process is in order.
One common question is “What does crop or pasture land rent for?” Unfortunately, there is no short answer to this question, other than the standard reply of “It depends.” Pasture leases can be extremely variable, depending on what different parties bring to the table. If the landlord basically provides a place for animals to roam around during the summer, rental rate should be relatively low. The more the landlord provides, such as fertilizer, working facilities, high quality pasture, high quality fencing, multiple water sources, management or labor assistance, etc., the higher the rental rate should be.
MU Extension has several publications that provide useful data on leasing and rental rates for agriculture enterprises. The most current rental rates for cropland and pastureland are reported in MU Guide G427 entitled “2018 Cash Rental Rates in Missouri”.
The MU Custom Rate Survey, MU Guide G302, was updated during the winter of 2019-2020. This publication provides information on crop planting and harvesting, hay harvesting and hauling, and other farming related activities. Lowest, highest and average rates are listed for the various activities.
The Missouri Farm Land Values Opinion Survey, MU Guide G401, was last conducted during the summer of 2019. Survey respondents included ag lenders, rural appraisers, and farmers. Land value estimates are made for differing types of farm land, categorized as good, average, poor, and irrigated. The estimates are also broken out by various regions across the state. Separate information for cropland, pastureland and timber and hunting/recreation land is provided.
These publications can be accessed on the MU Extension website: extension.missouri.edu and typing the appropriate guide sheet number into the search bar located at the top of the page.
Once some idea of prices is obtained, the next step is to get the lease written down. AgLease101.org is a website that was developed by the North Central Farm Management Extension Committee and contains information on lease agreements as well as sample lease forms. The North Central Farm Management Extension Committee is comprised of 16 Extension Educators located at universities from the North Central Region of the United States, including the University of Missouri.
The bottom line is that agriculture leases are extremely situation specific. The above resources can help you formulate the lease to the benefit of both parties. Finally, be sure to get the lease agreement in writing. If you need additional assistance, refer to the above publications or call your local University of Missouri Extension office.