Purdue Center for Commercial Agriculture producer survey graph via Farm Journal |
Michael Langemeier, an agricultural economist with Purdue University, says the Ag Economy Barometer is revealing "the sticker shock of solar leasing rates," Morgan writes. "The survey of 400 agricultural producers is now asking farmers how many have actively engaged in discussions with companies about leasing farmland you own for solar installation, and the response was surprising."
April's survey showed a substantial increase in the number of farmers who engaged in talks with a solar company representative over the past six months. Morgan reports, "In April, 19% of farmers said they’ve had discussions, up from 12% in March. The bigger surprise may be in the high rates solar companies are offering farmers."
While top-dollar solar lease prices may offer a good return for landowning farmers, the cost of cash-rent agreements will also increase. Langemeier told Morgan, "That's going to put upward pressure on cash rents, and it's probably going to put upward pressure on land values, given that it's local. . . . And so it probably impacts a fairly local area, depending on whether your area has solar leasing or not, but it certainly has pretty wide ramifications on what's going on in agriculture.”
Crop prices that don't meet production inputs also tempt farmers to consider solar leases.
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