Average cost of renting farmland in Iowa is at all-time high

Getting ready for planting (Photo by Zach Boyden-Holmes, Des Moines Register)

The cost to rent Iowa farmland has continued to increase over the past few years and "this year reached a 10-year high, driven by rising land values and recent strong farm income," reports Donnelle Eller of the Des Moines Register, citing an Iowa State University survey. "This year's average farmland rent climbed 9% to $279 an acre, according to the survey. That beat the record set in 2013, when the average reached $270 an acre. . . . At the time, Iowa and other states struggled with an extended drought that drove corn and soybean prices to new highs."

ISU Extension economist Alejandro Plastina, "expects farmland rents to decline," Eller reports. "While farm income has climbed over the past two years, the Department of Agriculture said in February that farmers will likely see it decline 16% this year with lower prices for most crops and livestock." Plastina told Eller, "Lower projected crop prices, along with sustained input inflation in 2024, would result in lower net farm income and put downward pressure on cash rents."
 
Rental costs "vary depending on the land's ability to produce corn and soybeans, ISU said. The rent for low-quality land climbed 6% to $230 an acre; medium-quality land jumped 8.6% to $277 an acre; and high-quality land spiked 11.1% to $330 an acre," Eller writes. "Experts said farmers will likely get squeezed this year, with the cost to raise a crop rising while prices for corn and soybeans, Iowa's dominant crops, decline. Production costs are expected to rise 20%, driven by rising interest rates and higher seed, fertilizer, chemical and land costs."