University of Missouri Extension

G427, Revised August 2011

2011 Cash Rental Rates in Missouri

Ronald L. Plain
MU Extension Economist
Department of Agricultural and Applied Economics
Joyce White
Project Coordinator
Department of Agricultural and Applied Economics

2011 ratesNote
Average rents are weighted by number of acres rented. Size is a simple average of the acreage of the parcels reported.

In the summer of 2011, 226 Missourians responded to a mailed survey and provided information on their cash rental arrangements for farm property. A summary of their rates for Missouri cropland, pasture, farm buildings and fee hunting is shown in the following tables. As expected, most rates had increased since our last survey.

This guide should not be used as the sole basis for determining your rent, but it may provide a reference as you consider the factors unique to your situation. The acres of land available for rent (supply) and the number of tenants wanting to rent for cash (demand), as well as production costs and market prices, can affect the amount of rent negotiated.

Table 1. Cash rent paid for Missouri crop and pasture land in 2011.

  Average rent per acre per year Range in rents Normal yield per acre Number of responses
Low Mid High
Cropland
Corn, dryland

$121.75

$35

$110

$250

139 bushels 181
Soybeans

113.88

30

100

230

45 bushels 174
Wheat

68.69

30

65

125

44 bushels 10
Wheat/beans, double crop

90.19

30

68

230

wheat 50 bushels
beans 35 bushels
18
Alfalfa hay

63.69

40

75

4.67 tons 4
Grass hay

32.91

13

30

60

2.66 tons 36
Pasture and grazing land
Good

 

31.43

8

30

75

less than 4 acres per 1,000-pound cow per year 111
Fair/poor

 

24.01

4

25

60

more than 4 acres per 1,000-pound cow per year 52
Timber pasture

 

16.63

9

15

35

 

 

11

Notes
Average rents and yields are weighted based on the number of acres rented. The mid rent in the range has an equal number of responses below and above it.

Table 2. Cash rent paid for Missouri cropland in 2011 by yield and acreage.

Average yield per acre Average rent per acre per year Average size(acres) Number of responses
Corn
100 to 120 bushels

$89

137 24
121 to 130 bushels

96

185 33
131 to 140 bushels

115

216 34
141 to 150 bushels

130

218 35
151 to 160 bushels

147

296 21
161 or more bushels

169

218 13
Soybeans
35 to 39 bushels

$83

216 31
40 to 44 bushels

113

198 54
45 to 49 bushels

114

249 28
50 to 54 bushels

140

241 26
55 or more bushels

135

277 15
Wheat
30 to 49 bushels

$42

63 3
50 to 60 bushels

85

45 7
Grass Hay      
Less than 2 tons

$27

54 10
2 to 2.9 tons

33

81 12
3 or more tons

37

80 10

Notes
Average rents are weighted by number of acres rented. Size is a simple average of the acreage of the parcels reported.

Table 3. Charge for pasturing cattle in Missouri by stocking rate in 2011.

  Average charge Range in charges Average stocking rate (animal units per acre) Average time on pasture Number of responses
Low High
Per cow-calf per month

$9.69

$5.00

$15.00

0.44 7.4 months 12
Per heifer per month

11.00

6.50

18.00

0.47 6.5 months 6
Per yearling per month

9.50

6.00

18.00

0.53 6.5 months 7

Table 4. Rental rates for Missouri farm buildings in 2011.

Type of structure Basis of charge Average charge

 

Range in charges Number of responses
Low High

Grain bin

per bushel per month

per bushel per year

flat rate per year (rate x maximum capacity of bin)

$0.022

0.150

0.126

$0.01

0.10

0.04

$0.03

0.30

0.20

10

19

12

 

 

Machine storage building per square foot per year

0.39

0.167

0.51

9

Table 5. Multiyear comparison of Missouri cash rental rates.

Type of land Average rates per acre per year
2008 2010 2011
Cropland
Corn, dryland

$97.95

$111.99

$121.75

Soybeans

96.91

105.67

113.88

Wheat

86.52

83.29

68.69

Wheat/beans, double crop

104.69

88.64

90.19

Alfalfa hay

61.82

63.69

63.69

Grass hay

 

30.31

30.95

32.91

Pasture
Good

29.95

29.88

31.43

Fair/poor

22.34

23.57

24.01

Timber pasture

7.03

15.59

16.63

Table 6. Hunting leases in Missouri, 2010 to 2011.

Animals to be hunted Total acres in leases reported Averages

 

Acres per lease Rent per acre (annual) Number hunters per lease Acres per hunter Number of responses
Any wildlife 3,215 536

$10.77

2.43

 

189 6
Range in rates   40 to 1,500

$2.50 to $15.00

1 to 6    
Deer only 453 113

$14.81

2.75 41 4
Range in rates   30 to 165

$4.55 to $45.92

2 to 4    
Deer and turkey 5,315 443

$13.69

3.75 118 11

Range in rates

  25 to 1,240

$1.00 to $33.33

1 to 8    

This year’s survey included our first attempt to determine charges for lease hunting (Table 6). The number of responses was small, so the averages may not be an accurate reflection of Missouri rates. Several landlords indicated they do not charge for hunting and therefore were not included in the averages.

Cash renting defined

In a cash rental agreement, a tenant pays a landowner a fixed amount of money per acre (or other unit of measure) for the use of resources, such as land or improvements. No nonmonetary payment or share of production is involved. The rates are commonly expressed as annual rates per acre for cropland and pasture. However, pasture may also be cash rented by charging a fixed rate per animal placed on the pasture for a specific period of time.

Storage facilities, such as grain bins and equipment storage structures, are also rented for cash. Rates are usually based on size or capacity for a specific use and time period, such as grain bins by capacity or a storage rate per bushel per month or per year. Use or availability of auxiliary equipment and utilities may also affect the rate.

A written lease that describes the terms of the agreement is recommended. A cash lease usually includes restrictions on use, such as which crops can or cannot be grown on specific fields and the degree of fertility that must be maintained. Pasture or livestock facilities may specify the number of animal units allowed. Storage facilities may specify type of crop to be stored and payment for utility usage. All cash leases should specify the amount of rent due, the time and method of payment and the duration of the lease. Apart from these terms, the tenant is free to plan production or use of facilities. 

It is common practice for the tenant to pay all costs involved in raising the specified crops during the period of the lease. Landowners normally pay for improvements expected to endure beyond the period of the lease, as well as expenses related to property ownership.

Pros (+) and cons (-) of cash renting

The tenant

+ Is relatively free to make management decisions and develop a business unit

+ Receives all profit resulting from higher yields or higher commodity prices, which adds an incentive for higher production.

+ May enroll in government programs and receive entire payment.

-  Has increased risk because rent is fixed regardless of production.

-  Can have large capital requirements for production expenses.

-  Can have rent increased for doing a good job because as revenue increases, landowner may attempt to negotiate a higher rent.

The landowner

+ Is assured of a specific level of income.

+ Is not required to tie up cash in the production process.

+ Has no worries about storing or marketing crops.

-  In good years, does not receive as much money as he or she would in a crop-share arrangement.

-  Worries that the tenant will not maintain the property.

-  Has little chance to do income tax management.

High rents increase the tenant’s risks but benefit the landowner. A variable or flexible cash rent based on yields, prices or both can help distribute risk. It is suggested that a proposed flexible agreement be reviewed by the local USDA Farm Services Agency office for classification before it is finalized.

For information on other types of rental arrangements and lease forms, contact the agriculture business management specialist at your local MU Extension center.

 

G427 2011 Cash Rental Rates in Missouri | University of Missouri Extension

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