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Farm Leasing Arrangements
The Farm Leasing Arrangements booklet offers many farmland leasing publications and
resources in a single document. It is designed for use by farmland owners, tenants, and
agricultural professionals. The book complements farmland leasing meetings, the Farm
Leasing Arrangements online course, and offers a compact package for those wanting a
current comprehensive set of leasing publications.
August 2009
Table of Contents
Improving Your Farm Lease Contract 3
Surveys
2008 Farmland Value Survey 15
March 2009 Realtors Land Institute Farmland Value Survey 20
Cash Rental Rates for Iowa 2009 Survey 22
Iowa Farmland Rental Rates, 1994-2008 36
Iowa Farm Building Rental Rate Survey 37
2009 Iowa Farm Custom Rate Survey 38
Survey of Iowa Farm Leasing Practices 40
Iowa Cattle Grazing Survey 47
Leasing Documents
Iowa Cash Rent Farm Lease (Short Form) 55
Iowa Farm Leases – Legal, Economic, and Tax Considerations 57
Iowa Fence Law 66
Notice of Termination of Farm Tenancy 70
Worksheets
Computing a Cropland Cash Rental Rate 71
Computing a Pasture Rental Rate 75
Flexible Farm Lease Agreements 77
Custom Farming: A Share of the Crop 81
Estimated Cost of Crop Production in Iowa – 2009 84
Appendix:
AMES (Ag Management e-School), Home Study Course 96
ISU Extension Farm and Agribusiness Management Specialists 97
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on
the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation,
and marital or family status. (Not all prohibited bases apply to all programs.) Many materials can be made
available in alternative formats for ADA clients. To file a complaint of discrimination, write USDA, Office
of Civil Rights, Room 326-W, Whitten Building, 14th and Independence Avenue, SW, Washington, DC
20250-9410 or call 202-720-5964.
Issued in furtherance of Cooperative Extension work, Acts of May 8 and June 30, 1914, in cooperation
with the U.S. Department of Agriculture. Jack M. Payne, Vice-President for Extension and Outreach, Iowa
State University of Science and Technology, Ames, Iowa.
Improving Your
Farm Lease Contract
A guide to help you better understand the business of farmland leases
FM 1564 Revised June 2003
3
Table of Contents
Importance of Leasing ......................................................................... 2
Reasons for Farm Leases ..................................................................... 2
Common Types of Leases .................................................................... 3
Advantages and Disadvantages of Different Types of Leases .............. 4–5
Factors that Influence Leasing Terms ................................................. 6
Key Areas of Decision Making ............................................................. 6–7
Economic and Legal Considerations ................................................... 8–9
Communication ................................................................................... 9
Termination of a Farm Lease .............................................................. 10
Summary ............................................................................................. 10
Additional References.......................................................................... 11
4
Importance of Leasing
Over one-half of Iowa’s farmland is rented and operated by someone other than the owner. In parts of central, north
central, and northwest Iowa, two-thirds of the land is tenant operated. On the other hand, less than one-half of the land
in southern Iowa is farmed by a tenant.
Leasing farmland involves a business agreement between the owner and the tenant operator who rents the land. Varia-
tions in leasing arrangements appear because of the differences in the productive capacity of the resources, the contribu-
tions made by each party, and the personal goals of the parties involved.
Reasons for Farm Leases
Land is an expensive resource in all areas of Iowa. A large capital investment is required to purchase
enough acres of land to provide the farm family an opportunity to earn a satisfactory living. The
average full-time farmer in Iowa today operates over 750 acres. The average value of farmland in
Iowa is over $2,000 per acre. Therefore, the average land investment for a commercial Iowa
farm today can easily exceed $1.5 million.
Many young farm families cannot afford to purchase farmland because they do not
have enough capital for a down payment, or the finance charges are too high for
them to meet the payments. These families have labor, some operating capital,
and management ability that they wish to use in a farm business to produce in-
come for living and future investment or debt reduction. If they are not in a
position to purchase land, they can rent land and provide the owner a return on
investment.
Many individuals or institutions that own land are looking for someone to farm it to
provide a return on their investment. Land ownership can also provide a hedge against
inflation through appreciation in value over time. Many landowners are former farm opera-
tors who have retired and who wish to retain their investment in the land for security, retire-
ment income, income tax deferral, and sentimental reasons.
Capital requirements per farm unit have been increasing faster than many farm families are
able to increase their net worth. Therefore, renting resources may be the only way they have
to put together an efficiently-sized operation. Most families desire to increase earnings and
accumulate enough net worth so that in the future they can own part or all of the land they
farm. The common trend in Iowa is to operate a combination of owned and rented land.
Modern machinery makes it possible for a family to handle a larger acreage than in the
past. Doing a good job of operating their own unit is the best reference operators can have
when they try to enlarge their operations by renting additional land in the community.
A farm lease is a legal instrument that describes the business agreement between the
landlord and tenant. The lease provides the basis for combining the landlord’s and the
tenant’s resources of land, labor, capital, and management to produce farm com-
modities. The arrangements for sharing farm income and expenses are a
very important part of many farm leases. Rental terms need to be revised
periodically to keep them up to date. The lease agreement also protects the
legal rights of all parties involved.
5
2
Common Types of Leases
The three most common types of leases used in Iowa, in order of popularity, are the cash lease, the crop-share lease, and
the custom farming contract. The common terms of these leases are described below.
Cash Lease
Under a straight cash lease the tenant pays a given amount of cash rent per acre per year or a lump sum per year for the
use of the farm resources. Some cash leases provide for a flexible amount of rent based on actual yields, prices, or both.
The landlord may put some restrictions on the number of acres of some crops that can be grown, or what farming
practices can be used. Other than this, the tenant has a free rein in planning the crop and livestock production program
on the farm unit, and receives all the crop and USDA commodity program payments.
Crop-share Lease
The distinguishing characteristic of a crop-share lease is that the owner receives a share of the crop and USDA payments
as a return for the land resources used. In Iowa, a typical division is for the landlord to receive one-half of the grain. The
owner’s share of a hay crop varies, depending on how the costs for establishing the seeding were shared. In some cases
the tenant pays a cash rent for land in pasture or hay. There may be a separate rental charge for a good set of buildings
or grain storage facilities.
The owner normally furnishes land and buildings and a share of the costs of certain expenses such as fertilizer, seed, and
pesticides when the crop is divided 50-50. The tenant usually furnishes all the labor, fuel, equipment, and certain other
expenses involved in the crop production part of the farm business. Iowa State University Extension publication FM
1811, Survey of Iowa Farm Leasing Practices, provide more details bout the sharing of expenses under a crop-share lease.
Some share leases include livestock production, as well. The common terms in a livestock-share lease are that the owner
furnishes the land and buildings, and the tenant furnishes the labor and most of the movable equipment. The livestock
is owned jointly and receipts from livestock and crop sales are divided as determined in the leasing agreement, usually
half and half. Certain operating expenses are also often shared equally, such as feed purchased for livestock, livestock
purchases, veterinary bills, and other livestock expenses.
Custom Farming Contract
Under a custom farming contract the operator supplies all the labor and equipment needed to perform tillage, planting,
pest control, harvesting, and storing of crops. The landowner pays all other expenses, and receives all the crop and
USDA payments. The custom operator receives a fixed payment per acre from the
owner, or a fixed payment for each operation performed.
Some agreements pay the custom operator a bonus for meeting
certain planting date or yield goals. Others provide for the
operator to receive a percentage of the crop instead of a
cash payment, generally from 25 to 35 percent. If the cus-
tom operator takes responsibility for purchasing and de-
livering crop inputs, the cash payment or crop share
is generally higher.
6
3
Advantages and Disadvantages
of Different Types of Leases
All types of leases have advantages and disadvantages. The parties entering into a leasing arrangement should recognize
these characteristics and consider them in determining the type of lease desired and the terms that should be incorpo-
rated in the lease
Cash Lease
Advantages of a straight cash lease are:
• The lease is simple with relatively few chances for misunderstanding.
• The owner is relieved of making day-to-day operating decisions.
• The owner has very little financial risk.
• The tenant has maximum freedom in planning and developing the cropping and livestock programs.
• The tenant has fewer records to keep.
Disadvantages and potential problems of the straight cash lease are:
• A fair cash rental rate may have to be renegotiated each year.
• Cash rents are likely to be too low in times of rising prices and increasing yields, and too high in times of low
prices or low yields.
• Tenants are required to supply more operating capital.
• Tenants bear all the risk of price and yield variability.
Crop-share Lease
The advantages of a crop-share lease are:
• Crop risks associated with price and yield variations are shared equally.
• The owner is more involved in operating decisions and marketing the grain during the year.
• Both parties share the benefits from adoption of yield-increasing technology, or unexpected high yields or prices.
• A second USDA payment limit is created.
Disadvantages or potential problem areas of a crop-share lease include:
• The landlord and tenant must determine how production expenses are shared.
• Adjustments for sharing costs for storage and drying facilities, herbicides that reduce field work, or fertilizer and
pesticide application may have to be made.
• The cropping plan to be followed and whether or not the farm participates in government programs must be
agreed on. 7
4
• Added cash rent for buildings and facilities may have to be negotiated.
• If the owner’s and tenant’s grain is stored in a common bin, marketing decisions have to be made jointly.
• The landowner may be considered a material participant, and farm income will be subject to self employment
taxation.
Custom Farming Contract
Advantages of a custom farming contract are:
• There is very little financial risk for the operator.
• The owner benefits from any unexpected high prices, yields or government program payments.
• Only one party is responsible for marketing grain.
• Agreements are usually fairly simple to negotiate.
Disadvantages and potential problems of custom farming contracts are:
• The number and timing of field operations to be done each year may have to be modified, depending on weather
conditions.
• The operator may have to set priorities among the custom farmed land and other rented or owned land.
• The owner and the custom operator must agree on the cropping system, fertility program, and type of pest
control to be used.
• Crop inputs such as seed, fertilizer and pesticides must be purchased and delivered in a timely manner.
• The landowner may be considered a material participant, and farm income will be subject to
self employment taxation.
8
5
Factors that Influence Leasing Terms
Many factors influence the terms of an individual farm lease. Some of the main ones are listed below.
• Productivity of the land. Historical yields, corn suitability rating (CSR) index, and soil maps can be used to
evaluate the relative productivity of each farm or field.
• The value of the contributions made by each party in the leasing arrangement, such as labor, capital, or manage-
ment.
• The bargaining position and bargaining ability of each party, and the competition for rented land in the immedi-
ate area.
• Custom. What has been customary in the community in the past is a good starting point, but may not be the best
guide because of changing conditions.
• Family considerations. A parent-child agreement may be highly favorable to the child when compared with
other leases, because the parents do not need as much income, want to help the child get started, and desire to
keep the farm in the family.
• Improvements and facilities on the farm, dwellings, roads, schools, churches, markets, location, and the size of
the farm unit.
• USDA farm programs. The crop acreage bases and proven yields assigned to a particular farm will affect the size
of some commodity program payments that are paid to the operator.
• Contracts. Agreements for producing seed or other specialty crops, or to receive livestock nutrients can enhance
the value of a particular property.
Key Areas of Decision Making
There are certain areas in developing a farm lease that should be given very careful consideration by both parties. The
answers to these questions will depend on the intent of the parties in the leasing arrangement and the bargaining posi-
tion of each. Several key areas should be considered.
Cost Sharing
A question that frequently comes up is the landlord’s responsibility in sharing herbicide costs for weed control that may
be a partial or complete substitute for cultivation or other tillage methods. Most landlords agree to furnish half of the
cost of these materials under the crop-share or livestock-share lease. Some feel that where minimum tillage is practiced,
they should not have to share in the full cost of herbicides.
One arrangement is for the landlord to share half of the cost of a row or band application of these herbicides, which
hopefully will provide better weed control and higher potential yields. This does not reduce the tenant’s responsibility
for cultivating since weeds will be controlled only in the area over the row. If the tenant wishes to use herbicide over the
entire area, he or she pays all of the costs in excess of a share of the banding operation.
There are many variations in the distribution of custom application costs for the inputs mentioned above. Therefore, it
is advisable to discuss these items in advance and state in the lease whether or not the landlord will share in any of these
costs. 96
Harvesting
How will costs associated with combining, drying, and storing crops be shared under a share lease? When the corn
drying facilities are part of the storage unit, the landlord often furnishes the dryer and storage facilities. If the corn drying
unit is portable it may be jointly owned, or either party may own it and charge the other party an established amount for
its use. The fuel and power costs for drying are normally shared in the same proportion as the crop is divided. In some
leases the tenant is paid extra for delivering the owner’s share of the crop from farm storage to an elevator.
Additional Land
What considerations are needed if the tenant proposes to rent additional land from multiple owners? It is advisable that
the parties concerned have an understanding about areas such as timing of field operations on each farm, buildings
furnished on each unit, commingling of grain, and the records needed by the tenant to assure accurate expense and
production accounting to each owner.
Financing Improvements
There are several ways to handle the cost of making permanent improvements, such as buildings, storage structures,
conservation structures, fences, waterways, and others.
1. The landlord provides the improvement as part of the rental agreement with an understanding that the rental
rate will be increased as a result of the improvements.
2. Cost of the improvements is shared by the landlord and tenant in some form. If the improvement is constructed
on the farm, the tenant may furnish labor and machinery for the job.
3. The tenant provides the agreed upon facilities with a provision for being reimbursed by the landlord for the
unused portion of the facilities if the lease ends before the useful life of the improvement is expended.
In determining whether or not a lease is fair and equitable to both parties, it is necessary to consider the lease in total
rather than individual provisions or sections of the lease. One provision in the lease may be favorable to one party, while
another provision may be more favorable to the other party and the two factors may balance out.
10
7
Economic and Legal Considerations
There are both economic and legal factors to consider when developing a farm lease agreement. Some of the key eco-
nomic questions are:
• Does the lease provide the business framework for the most profitable long-term operation of the farm?
• Does the agreement encourage the use of the most profitable levels of capital, labor, and management in the farm
business?
• Are the returns shared between the landlord and tenant in an equitable manner when the value of contributions
of each party is considered?
• Is the most profitable level of modern technology utilized in the crop and livestock production in the farm
business?
• Is the farming unit large enough to achieve an efficient level of operation and provide a satisfactory return to
both landlord and tenant? It is much easier to divide a good income fairly than an inadequate income.
Legal considerations in the farm lease also promote an efficient business. Some of the key legal considerations are:
• Does the lease provide adequate legal protection to both parties?
• Is the lease in writing? Written leases leave less chance for disagreement or misunderstanding between the
parties over a period of time.
• Is the landowner considered a “material participant?”
Self-employment income
A materially participating landowner must report farm income as self-employment income rather than as passive invest-
ment income. As such, it is subject to the normal self-employment tax rate. Of course, paying some self-employment
tax will boost social security benefits in the future.
Social security benefits
Landowners under age 65 may have their social security benefits reduced if they are actively involved, depending on the
amount and timing of the income received. When landowners reach age 65 and beyond there is no limit on the amount
of active income that can be earned with respect to social security benefits.
Estate tax valuation
Many farm properties can qualify for “special-use valuation” when they go through probate, which often results in a
valuation below fair market value. This can be advantageous for estates large enough to trigger estate taxes. However,
one requirement for special-use valuation is that the decedent, or a family member, must have materially participated in
the business five out of eight years prior to death, and a qualified heir must materially participate for ten years after the
death of the decedent.
Landlord’s liens
In Iowa, a statutory (created by state law) landlord’s lien exists. The lien is applicable whether the lease is for cash rent or
crop share. The statutory lien is a lien “upon all crops grown upon the leased premises, and upon all other personal
11
8
property of the tenant which has been used or kept thereon during the term and which is not exempt from execution.”
The landlord’s lien must be filed with the Iowa Secretary of State’s office within 20 days of when the lease goes into
effect, but remains in force until a different tenant takes over the farm.
Communication
Good communication between tenants and landowners is essential for building a successful leasing relationship. Land-
owners are concerned about the use and care of their farm. Nonresident owners cannot observe conditions first hand.
Widows may not have been heavily involved in the management of the property, and feel unsure about how to proceed
with decisions.
Provide Reports
Tenants can borrow a technique from professional farm managers who provide their clients with written reports on a
regular basis. Obviously, a report is more important with a crop share or livestock share lease than a cash lease. But it
may be beneficial for a tenant with a cash lease to develop an abbreviated form of reporting, especially for landowners
who have a strong interest in the productivity of the farm.
Sending pictures to a landowner who is not close enough to observe crop conditions each year is a very effective commu-
nication tool. Today, digital camera photo files can be easily transmitted by e-mail.
For a crop share lease, keep the accounting of expenses current. Most input suppliers will invoice each party individu-
ally. However, inform the owner beforehand that he/she will be receiving a bill and what it is for. Tenants renting from
several owners may purchase supplies in volume and prorate the bill to each of the owners. In this situation a copy of the
original invoice should be included. Explain each item on the bill. Names of farm inputs change frequently. The owner
may not be familiar with commercial product terms for seed, herbicides and insecticides, but nonetheless may have to
categorize the expenses for income tax reporting.
Why have a written lease?
A written lease is like the minutes of a meeting. It tells when you met, who was there, and what was decided. Written
leases make the lease terms more definite and leave less chance for disagreement and misunderstanding. People tend to
selectively recall only those portions of conversations that reinforce their point of view. It protects not only the original
parties, but also assignees and heirs in case either party should die, or the farm is sold.
A written lease encourages both parties to consider many phases of the lease before the lease period begins. Decisions
are made before the problems occur. In subsequent years, it provides a basis for changing lease provisions when adjust-
ments are desirable, as well as documentation in case of an Internal Revenue Service audit.
The document should meet at least the following minimum requirements:
• Both parties should properly sign it.
• It should specify a definite period for which the lease is to run.
• It should contain an accurate description of the property.
• It should state the kind and amount of rent and time and place of payment.
12
9
Termination of a Farm Lease
A farm lease automatically continues from year to year unless either party gives a notice of termination. In Iowa, a lease
termination notice must be properly served by September 1, prior to the end of the lease year. The termination notice
must fix the termination of the tenancy to take place on the following March 1. If notice is not served, the lease
continues for another crop year under the same conditions and terms. However, if mutually acceptable to all parties
concerned, a lease can be terminated or modified at any time.
Iowa law specifies three methods of serving a farm lease termination notice to terminate the tenancy on the following
March 1. The following is quoted from the Code of Iowa, Section 562.7:
“Notice—How and when served. Written notice shall be served upon either party or a successor of the party by using
one of the following methods:
1. By delivery of the notice, on or before September 1, with acceptance of service to be signed by the party to the
lease or a successor of the party, receiving the notice.
2. By serving the notice, on or before September 1, personally, or if personal service has been tried and cannot be
achieved, by publication, on the same conditions, and in the same manner as is provided for the service of
original notices, except that when the notice is served by publication no affidavit is required. Service by publi-
cation is completed on the day of the last publication.
3. By mailing the notice before September 1 by certified mail. Notice served by certified mail is made and com-
pleted when the notice is enclosed in a sealed envelope, with the proper postage on the envelope, addressed to
the party or a successor of the party at the last known mailing address and deposited in a mail receptacle pro-
vided by the United States postal service.”
A form entitled “Notice of Termination of Farm Tenancy” prepared by the Iowa State Bar Association is available from
law offices.
The individual lease may state a date earlier than September 1 for serving a termination notice. The requirement to
terminate a farm lease applies only to cropland in tracts of 40 acres or more. It does not apply to pasture land rented
separately or tracts under 40 acres in size. Only a 30-day notice is required in these cases.
Oral leases are valid in most states. In Iowa they cannot have a life of more than one year. Nevertheless, even an oral
lease is automatically renewed if it is not properly terminated in time.
Summary
A good lease is the first step toward a satisfactory operating relationship between a landlord and tenant. Although it is
probably impossible to develop a lease that will provide for all possible situations that might arise, the parties should try
to anticipate the potential areas where problems may arise and plan provisions in the lease to handle them. Only the
parties involved can determine what is fair to each and what the final agreement should be. Since many factors influence
a leasing agreement, each contract should be modified to fit the individual situation.
13
10
Additional References
From Midwest Plan Service From Iowa State University Extension
• NCR 75 Fixed and Flexible Cash Rental Arrangements for Your • FM 1538 Iowa Farm Lease (form)
Farm • FM 1724 Flexible Farm Lease Agreements
• NCR 76 Cash Farm Lease with Flexible Provisions (form) • FM 1728 Iowa Farmland Rental Rates
• NCR 105 Crop-share or Crop-share/Cash Rental Arrangements • FM 1801 Estimating Cash Rental Rates for Farmland
for Your Farm • FM 1811 Survey of Iowa Farm Leasing Practices
• NCR 77 Crop-share or Crop-share/Cash Farm Lease (form) • FM 1823 Custom Farming: an Alternative to Leasing
• NCR 148 Irrigation Crop-share and Cash Rental Arrangements • FM 1825 Iowa Farmland Value Survey
for Your Farm • FM 1851 Cash Rental Rates for Iowa (survey)
• NCR 106 Irrigation Crop-share or Crop-share/Cash Farm
Lease (form) Available at www.extension.iastate.edu/pubs/ or call
• NCR 149 Pasture Rental Arrangements for Your Farm (515) 294-5247.
• NCR 109 Pasture Lease (form)
• NCR 214 Rental Agreements for Farm Buildings and Livestock • Farm Leasing Arrangements (home study course on the
Facilities Internet) Available at: www.extension.iastate.edu/ames/
• NCR 215 Farm Buildings and Livestock Facilities Lease
(form)
Available at www.mwpshq.org or call (800) 562-3618.
Revised by William Edwards, extension economist. Originally prepared by E.G. Stoneberg, former extension economist.
Designed by Kathy Summy, extension communications.
File Code:Agricultural Economics 1-4 [B]
...and justice for all
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual
orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Many materials can be made available in alternative formats for ADA clients. To file a complaint of
discrimination, write USDA, Office of Civil Rights, Room 326-W, Whitten Building, 14th and Independence Avenue, SW, Washington, DC 20250-9410 or call 202-720-5964.
Issued in furtherance of Cooperative Extension work, Acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Agriculture. Stanley R. Johnson, director, Cooperative Extension
Service, Iowa State University of Science and Technology, Ames, Iowa. 14
11
File C2-70
January 2009
www.extension.iastate.edu/agdm
2008 Farmland Value Survey
T
he survey was initiated in 1941 and is sponsored There were 3 negative factors listed by more than 10
annually by the Iowa Agriculture and Home percent of the respondents. High input costs were list-
Economics Experiment Station, Iowa State Uni- ed by 24 percent of the respondents. Declining grain
versity. Only the state average and the district averages prices were listed by 18 percent of the respondents and
are based directly on the ISU survey data. The county the poor general economy was listed by 14 percent of
estimates are derived by using a procedure that com- the respondents.
bines the ISU survey results with data from the U.S.
Census of Agriculture. Number of sales compared to previous year
When asked to compare the number of sales in 2008
The survey is intended to provide information on gen- relative to 2007, 38 percent reported more, 37 percent
eral land value trends, geographical land price relation- the same, and 25 percent reported less.
ships and factors influencing the Iowa land market.
The survey is not intended to provide an estimate for Land sales by buyer category
any particular piece of property. Respondents were asked what percent of the land was
sold to the following four categories of buyers.
The survey is based on reports by licensed real estate • Existing farmers represented 69 percent of the sales.
brokers and selected individuals considered to be • Investors represented 24 percent.
knowledgeable of land market conditions. Approxi- • New farmers represented 3 percent.
mately 1,100 surveys are mailed each year. Normally • Other purchasers represented 4 percent.
500-600 completed surveys are returned. The 2008
survey is based on 479 usable responses pro- Sales to existing farmers by Crop Reporting Districts
viding estimates on 625 county land values. ranged from 83 percent in West Central to 55 percent in
Respondents were asked to report on more South Central and Southwest.
than one county if they were knowledgeable
about the land markets.
Figure 1. Average value per acre of Iow farmland.
Participants in the survey are asked to
estimate the value of high, medium and low
grade land in their county. Comparative
sales and other factors are taken into account
by the respondents in making these value
estimates.
Major factors influencing the real estate
market
Survey respondents listed both positive and
negative factors influencing the land market.
The respondents listed multiple factors in
most cases.
There were 2 positive factors listed by over
10 percent of the respondents. Good grain
prices was by far the most frequently men-
tioned positive factor, being mentioned by Figure 1. Average value per acre of Iowa farmland.
34 percent of the respondents. Low interest Source: 1901-1911 and 1941-2001 from Iowa Agriculture
rates were mentioned by 14 percent of the Experiment Station; 1912-1940 from USDA.
respondents.
Michael D. Duffy, extension economist;
15 Darnell Smith, research economist,
515-294-6160, mduffy@iastate.edu
Page 2 File C2-70
Sales to investors were highest in Southwest (38 Table 1. Recent changes in Iowa farmland
percent). West Central reported the lowest investor values.
activity (13 percent).
Value Dollar Percentage
Year per acre change change
Interpretation of survey results
It is important to remember the time period when 1980 2066 108 5.5
interpreting the 2008 survey results. The Iowa State 1981 2147 82 3.9
University survey covers the time period from No- 1982 1801 -346 -16.1
vember 2007 to November 2008. This is important 1983 1691 -110 -6.1
to remember because there have been considerable 1984 1357 -334 -19.8
changes in the situation in Iowa over the past few 1985 948 -409 -30.2
months. Monthly average corn and soybean prices in 1986 787 -161 -17.0
Iowa had been continually rising until July of 2008. 1987 875 88 11.2
1988 1054 179 20.4
Corn averaged $5.41 per bushel in July and current
1989 1139 85 8.1
prices are below $3.00. Soybeans averaged $13.10 in 1990 1214 75 6.6
July and the current prices are below $8.00 per bushel. 1991 1219 5 0.4
Confounding this change in revenue has been substan- 1992 1249 30 2.5
tial increases in the costs of production, especially for 1993 1275 26 2.1
fertilizers and seed. 1994 1356 81 6.4
1995 1455 99 7.3
The lower grain prices and higher costs of production 1996 1682 227 15.6
mean lower net revenue per acre which ultimately 1997 1837 155 9.2
would imply moderation in land value. As one survey 1998 1801 -36 -1.9
respondent reported; “… the farmland market, after 1999 1781 -20 -1.1
2000 1857 76 4.3
having had a substantial run over the past several years,
2001 1926 69 3.7
the uptrend is appearing to be wearing thin. The recent 2002 2083 157 8.2
declines in the grain market appear to be having a 2003 2275 192 9.2
direct impact on values…”. 2004 2629 354 15.1
2005 2914 285 10.8
A softening of the land market can be inferred by com- 2006 3204 290 10.0
paring the results of the ISU survey to other surveys 2007 3908 704 22.0
of Iowa farmland values. The Realtors Land Institute, 2008 4468 560 14.3
which does a semi-annual survey, reported a 6.6 per- There were also some notable changes in other cat-
cent increase in values from March to September and egories from the 2008 survey. East Central reported
an 11 percent increase from September 2007 to March a significant decrease in the amount of sales activi-
2008. This would be a 17.6 percent increase from Sep- ties. Almost half, 44 percent, of the respondents from
tember to September. The 7th District of the Federal the East Central crop reporting district reported less
Reserve Board reported a 2 percent quarterly increase sales relative to the same time period from a year ago.
from July to October and a 17 percent increase in Iowa This is a reflection of the flooding and other hardships
land values from October to October. suffered in this area over the past year. South Central
Iowa also reported a significant decline in sales, 43
It is important to keep these caveats in mind but, none- percent reported less sales. This perhaps reflects the
theless, the ISU survey did show considerable strength relatively soft demand for recreational land.
in Iowa farmland. The $4,468 average value was the
sixth straight year of record average land values. Land There was a marked increase in the amount of purchas-
values have almost doubled since 2003, going from es by farmers and a marked decrease in the purchases
$2,275 to $4,468 in just 5 years. by the investor category. These trends started a few
years ago and reflect the relative strength of the farm
In 2008, three counties averaged over $6,000 per acre. economy and farmers tendency to convert profits into
This is the first time any county has averaged over that farmland. In North Central Iowa investors dropped
amount. Similarly 2008 marked the first time that no from 39 to 26 percent of the purchases but purchases
county has averaged below $2,000 per acre. in the “Other” category increased from 1 to 12 percent.
16
File C2-70 Page 3
The ISU survey is an opinion survey so this may reflect my wildest imagination, that we would see a financial
different perceptions but it could represent the increase bailout of the magnitude that we have seen. Today we
in purchases for energy purposes. In North Central, have government oversight of financial institutions and
less than one-fourth of the respondents to this year’s the very real possibility of direct government participa-
survey were new. tion in the big three automakers.
Iowa farmland is not immune from the current financial I mention these factors not as an excuse for poor fore-
situation in the United States and around the world. casting last year but as way of indicating the uncertain-
Exports still make up a sizeable portion of the demand ty of the future, even six months from now. A recent
for our grain. In addition, international competition article in the Cleveland Federal Reserve Board report
for inputs is strong and having a significant impact on commented that “Economists, even in groups, are not
prices. How the current financial situation will play very precise forecasters…” when faced with situations
out and over what time period still remains unclear. like we have today.
Regardless there will be impacts on Iowa farmland
values. In spite of this uncertainty I will still forge ahead. My
feeling is that we have reached a plateau in land values
It is fortunate that today a considerable amount of Io- for the near term. A good deal of uncertainty exists
wa’s farmland is held without debt. A recently released long term due to the chaotic global financial situation.
survey on Iowa farmland ownership showed that 75 There will be adjustments but I don’t expect to see a
percent of the land was debt free. Debt has been used major drop in values reminiscent of the early 1980s
for recent sales but an estimated fourth of the purchases because so much of our land is held without debt and
were essentially without debt. the use of contracts as a debt instrument is significantly
lower than it was during the late 1970s. This means we
Another factor further clouding the future with respect should not see the forced liquidations or contract aban-
to Iowa farmland values is the aging farmland owner. donment that we witnessed in the 1980s. There will be
Recent estimates show that over half, 55 percent, of the financial troubles for farmers, however, especially for
farmland is owned by people over the age of 65. Ap- those who took on debt for machinery, equipment or
proximately 10 percent of the farmland, 1 in 10 acres, other reasons. Their ability to maintain payments and
is owned by a single female over the age of 75. This avoid liquidations will be critical.
means there will be a considerable amount of farm-
land changing ownership over the next several years. Someone selling land today may not be able to get the
Although most people indicated the higher land values same amount as they could have a few months ago.
had not changed their plans it remains to be seen if the Many of the survey respondents indicated that this was
same will be true in the new environment. the case. Some said there were still locales with stron-
ger prices but for the most part it was steady to weaker.
So what does all this mean for Iowa farmland values?
To be sure the future is very uncertain. We have seen Does this mean values have fallen or simply quit
events over the past few months that are unprecedented rising? My preference is to view this as a return to
and make predictions extremely tenuous. In last year’s more normal conditions in the land market where the
land value survey report I expected land values to unbridled exuberance we witnessed the past 24 months
remain strong for at least the next five years. I based has been curtailed. I think the land values will retreat
this on the mistaken believe that the ethanol boom and some from the highs but not go into the free-fall we
subsequent demand for grains was going to last at least witnessed in the 1980s. Unbridled pessimism can
that long. Little did I imagine that we would see an have the reverse effect from what we have recently
almost 50 percent drop in grain prices in just 6 months. witnessed. One thing we should have learned is that
I also didn’t consider that costs of production would anything can happen and probably will. Where land
rise as fast as they have. In addition, I never consid- values will go in the next year or so is really anyone’s
ered that we would see diesel prices fall by almost a guess but, overall, Iowa farmland should remain a good
fourth since last year and over a third since their high investment for the long run.
in July of this year. Finally, it never occurred to me in
17
Page 4 File C2-70
Table 2. Average value per acre of Iowa farmland listed by crop reporting districts and grades of land.
Year State North- North North- West East South- South South-
Avg west Central east Central Central Central west Central east
All grades
1997 1837 2263 2194 1721 1894 2295 2110 1369 957 1580
1998 1801 2174 2119 1757 1820 2192 2123 1373 948 1585
1999 1781 2059 2073 1807 1837 2128 2118 1346 981 1572
2000 1857 2198 2169 1868 1924 2195 2190 1412 992 1655
2001 1926 2240 2240 1950 1969 2246 2324 1511 1039 1705
2002 2083 2434 2367 2149 2101 2392 2547 1632 1211 1808
2003 2275 2683 2514 2347 2329 2652 2715 1774 1354 1979
2004 2629 3118 2913 2665 2728 3101 3054 2088 1547 2286
2005 2914 3393 3222 2963 3048 3415 3396 2350 1793 2483
2006 3204 3783 3478 3187 3410 3716 3725 2580 1927 2849
2007 3908 4699 4356 4055 4033 4529 4272 3209 2325 3463
2008 4468 5395 4950 4590 4823 5280 4743 3626 2573 3913
High grade
1997 2328 2647 2531 2210 2350 2790 2673 1786 1443 2383
1998 2284 2534 2449 2238 2268 2659 2683 1798 1455 2369
1999 2249 2401 2362 2275 2288 2589 2685 1773 1499 2271
2000 2324 2547 2462 2329 2375 2660 2743 1825 1509 2353
2001 2407 2588 2546 2439 2437 2685 2907 1947 1582 2447
2002 2576 2776 2676 2625 2583 2848 3105 2117 1931 2539
2003 2790 3040 2817 2857 2820 3121 3263 2285 2121 2783
2004 3193 3537 3265 3189 3264 3621 3659 2657 2358 3174
2005 3511 3813 3588 3522 3691 3935 4069 2925 2659 3385
2006 3835 4261 3834 3816 4072 4263 4443 3209 2663 3793
2007 4686 5313 4807 4859 4804 5261 5073 3989 3231 4625
2008 5381 6150 5514 5415 5752 6076 5674 4642 3586 5346
Medium grade
1997 1668 2033 1945 1577 1742 2050 1910 1280 945 1404
1998 1638 1970 1885 1604 1670 1968 1930 1274 924 1414
1999 1629 1876 1869 1665 1692 1892 1945 1241 949 1433
2000 1701 2001 1972 1728 1772 1956 1996 1320 955 1511
2001 1768 2057 2040 1800 1807 2013 2125 1410 1004 1571
2002 1924 2278 2142 2010 1930 2175 2358 1522 1152 1659
2003 2123 2507 2309 2221 2167 2438 2543 1659 1307 1834
2004 2457 2930 2669 2515 2564 2858 2863 1956 1492 2118
2005 2736 3199 2982 2834 2833 3165 3172 2217 1725 2347
2006 3011 3561 3223 2987 3213 3458 3501 2442 1866 2679
2007 3667 4385 4026 3777 3796 4194 4005 3047 2296 3270
2008 4195 5023 4568 4339 4537 4919 4405 3425 2527 3721
Low grade
1997 1042 1354 1337 992 1083 1279 1186 787 544 730
1998 1030 1299 1286 1059 1021 1258 1205 792 542 739
1999 1045 1216 1314 1110 1040 1296 1188 798 582 790
2000 1117 1370 1387 1167 1126 1299 1288 862 597 875
2001 1170 1388 1423 1208 1202 1416 1404 918 623 871
2002 1322 1571 1568 1448 1332 1516 1628 996 760 997
2003 1463 1808 1682 1512 1500 1707 1811 1130 858 1063
2004 1713 2087 1976 1816 1746 2028 1998 1354 1029 1272
2005 1961 2382 2252 2032 1970 2353 2237 1614 1252 1438
2006 2195 2566 2500 2248 2293 2615 2505 1729 1383 1786
2007 2656 3210 3125 2853 2738 3004 2928 2175 1583 2131
2008 2967 3580 3408 3296 3187 3469 3214 2298 1757 2271
18
File C2-70 Page 5
Figure 2. 2008 Land values, by county.
County estimates of average dollar value per acre for Iowa farmland based on U.S. Census of Agriculture es-
timates and a Nov. 1, 2008, survey of Iowa real estate brokers. The top figure is the estimated Nov. 1, 2008,
value; the bottom figure is the estimated Nov. 1, 2007, value.
Figure 3. 2008 Land values by crop reporting district.
Estimates of average dollar
value per acre for high, me-
dium and low grade farmland
on Nov. 1, 2008, by Iowa
Crop Reporting District; and
the Crop Reporting District
average and the average
percentage change from
Nov. 1, 2007. The estimates
are based on a survey
conducted by Iowa State
University Extension.
. . . and justice for all of discrimination, write USDA, Office of Civil Rights, Room 326-W, Whitten
The U.S. Department of Agriculture (USDA) prohibits discrimination in all Building, 14th and Independence Avenue, SW, Washington, DC 20250-9410 or
its programs and activities on the basis of race, color, national origin, gender, call 202-720-5964.
religion, age, disability, political beliefs, sexual orientation, and marital or family
status. (Not all prohibited bases apply to all programs.) Many materials can Issued in furtherance of Cooperative Extension work, Acts of May 8 and June
be made available in alternative formats for ADA clients. To file a complaint 30, 1914, in cooperation with the U.S. Department of Agriculture. Jack M.
Payne, director, Cooperative Extension Service, Iowa State University of Science
19
and Technology, Ames, Iowa.
File C2-75
May 2009
R www.extension.iastate.edu/agdm
Farmland Value Survey
Realtors Land Institute
T
he Iowa Farm & Land Chapter #2 Realtors Participants were asked to estimate average values
Land Institute has released the results of its of farmland as of March 2009. The estimates are
March 2009 Iowa Land Trends and Values for bare, unimproved land with the sale price on a
Survey. The Realtors Land Institute is an arm of the cash basis. Pasture and timber land values were also
National Association of Realtors and is organized for requested as supplemental information.
realtors who specialize in farm and land sales, man-
agement and appraisal. All participants in the survey
deal almost exclusively in farmland.
Troy Louwagie
Realtors Land Institute
20 319-895-8858
Page 2 File C2-75
Table 1. Survey of farmland values (dollars per acre).
Iowa Farm & Land Chapter #2, Realtors Land Institute
Land classification by potential corn yield
High quality Medium quality Low quality Not tillable Timber
Change
Area in Iowa crop land crop land crop land pasture
past
Sept. March Sept. March Sept. March Sept. March Sept. March 6 mos.
Central $6,016 $5,665 $4,766 $4,421 $3,447 $3,134 $2,038 $1,932 $1,923 $1,841 -7.6%
East central 5,633 5,523 4,511 4,309 3,492 3,316 2,210 2,063 2,090 1,986 -3.7
North central 5,562 5,179 4,631 4,264 3,733 3,309 1,900 1,828 1,800 1,810 -9.2
Northeast 6,071 5,565 4,916 4,413 3,559 3,277 2,336 2,092 2,657 2,158 -9.7
Northwest 5,823 5,352 5,100 4,607 4,108 3,526 1,953 1,830 2,050 1,854 -11.5
South central 4,242 4,139 3,301 3,227 2,746 2,605 2,025 1,915 1,889 1,850 -3.2
Southeast 5,711 5,683 4,170 4,049 3,366 3,191 1,844 1,809 1,881 1,706 -2.5
Southwest 5,317 5,117 4,184 3,903 3,346 2,982 1,767 1,869 1,800 1,600 -7
West central 6,193 5,452 5,173 4,574 4,023 3,468 2,323 2,018 1,939 1,772 -14
State
average $5,619 $5,297 $4,528 $4,196 $3,536 $3,201 $2,044 $1,928 $2,003 $1,842 -7.6%
. . . and justice for all
The U.S. Department of Agriculture (USDA) prohibits discrimination Issued in furtherance of Cooperative Extension work, Acts of May 8
in all its programs and activities on the basis of race, color, national and June 30, 1914, in cooperation with the U.S. Department of Agri-
origin, gender, religion, age, disability, political beliefs, sexual orienta- culture. Jack M. Payne, director, Cooperative Extension Service, Iowa
tion, and marital or family status. (Not all prohibited bases apply to State University of Science and Technology, Ames, Iowa.
all programs.) Many materials can be made available in alternative
formats for ADA clients. To file a complaint of discrimination, write
USDA, Office of Civil Rights, Room 326-W, Whitten Building, 14th
and Independence Avenue, SW, Washington, DC 20250-9410 or call
202-720-5964.
21
Cash Rental Rates for Iowa Ag Decision Maker
2009 Survey File C2-10
T
he cash rental rates presented in this publication The rental rates summarized in this bulletin do not
are the result of a survey of farmers, landown- reflect the value of any buildings or storage structures,
ers, agricultural lenders, real estate brokers, and manure application contracts, or seed production con-
professional farm managers. They supplied information tracts. Counties were grouped into areas as shown on
based on their best judgments about typical cash rental the map below.
rates for high, medium, and low quality cropland in
their counties, as well as for land devoted to hay pro- Circumstances such as the following may justify a
duction, oats, and pasture. Information about individual higher or lower rent in specific cases:
parcels of land was not collected. • Small size or unusual shape of fields
• Presence of terraces or creeks that affect the time it
The cooperation and assistance of the landowners, takes to plant and harvest
farmers, and agribusiness people who responded to • Difficult or restricted access to fields
this survey are greatly appreciated. The distribution of • High or low fertility levels or Ph index
the 1,271 responses was 39 percent farmers, 27 percent • Existence of contracts for growing seed or specialty
landowners, 11 percent professional managers, 15 per- grains, or application of manure
cent lenders, and 9 percent other professions. • Above average local grain prices due to proximity to
Responses received in 2009 were again more variable biofuel plants or feed mills
than in previous years. This variability is likely due to • USDA program variables, such as crop bases and as-
the volatility of corn and soybean prices in the past few signed yields
years and led to a wide range of opinions about typical • Longevity of the lease
rents in some counties. • Other services performed by the tenant
FM 1851 Revised May 2009
22
Page 2 Cash Rental Rates for Iowa - 2009 Survey
2009 CASH RENTAL SURVEY FOR AREA 1
Area
County Average Clay Dickinson Emmet Lyon O’Brien Osceola Palo Alto Sioux
Number of responses 92 15 10 11 9 13 12 6 16
2004 - 2008 Avg. Corn Yield 176 173 170 175 178 179 177 176 178
2004 - 2008 Avg. Soybean Yield 51 49 47 48 53 54 51 49 55
Avg. Row Crop CSR Index 71 75 72 71 64 74 70 71 66
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $186 $180 $168 $161 $191 $213 $200 $173 $204
High quality third
Average response $222 $218 $200 $185 $234 $249 $240 $210 $238
Range of responses 155 - 300 180 - 225 160 - 220 190 - 280 142 - 335 190 - 315 175 - 230 190 - 300
Medium quality third
Average response $186 $175 $168 $165 $191 $211 $203 $177 $197
Range of responses 135 - 200 140 - 185 140 - 200 170 - 245 130 - 275 160 - 250 155 - 200 167 - 260
Low quality third
Average response $152 $149 $137 $133 $148 $178 $158 $134 $179
Range of responses 125 - 165 110 - 160 100 - 165 110 - 200 120 - 225 120 - 210 120 - 140 150 - 230
Typical Corn Yield, bu. per acre
High third 193 191 182 189 197 197 196 191 198
Middle third 174 170 165 172 177 182 178 172 178
Low third 147 136 142 145 148 155 156 141 151
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $1.05 $1.03 $0.99 $0.88 $1.06 $1.20 $1.12 $0.97 $1.18
Rent per bu. of soybean yld $3.63 $3.63 $3.58 $3.18 $3.56 $3.97 $3.85 $3.46 $3.79
Rent per CSR index point $2.62 $2.36 $2.33 $2.14 $2.93 $2.90 $2.79 $2.39 $3.15
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $142
Grass hay, established $94
Oats $110
Improved permanent pasture $57 $52
Unimproved permanent pasture $46 $41 $40
Pasture, $/AUM NA
Cornstalk grazing NA
23
Cash Rental Rates for Iowa - 2009 Survey Page 3
2009 CASH RENTAL SURVEY FOR AREA 2
Area
County Average Calhoun Hamilton Humboldt Kossuth Pocahontas Webster Wright
Number of responses 120 15 16 16 10 16 18 29
2004 - 2008 Avg. Corn Yield 179 178 179 182 179 178 181 179
2004 - 2008 Avg. Soybean Yield 50 50 50 51 50 50 49 50
Avg. Row Crop CSR Index 77 79 80 NA 72 74 82 76
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $201 $202 $202 $198 $200 $190 $208 $208
High quality third
Average response $234 $238 $239 $217 $228 $215 $252 $250
Range of responses 185 - 307 150 - 325 185 - 325 185 - 305 175 - 325 185 - 350 175 - 325
Medium quality third
Average response $201 $199 $195 $210 $200 $193 $201 $208
Range of responses 155 - 250 140 - 300 165 - 275 162 - 270 160 - 275 165 - 275 160 - 250
Low quality third
Average response $168 $168 $171 $169 $172 $161 $172 $164
Range of responses 135 - 200 120 - 290 125 - 200 134 - 225 135 - 200 147 - 225 100 - 200
Typical Corn Yield, bu. per acre
High third 193 193 196 196 193 191 194 190
Middle third 178 177 179 180 178 175 182 178
Low third 157 158 158 160 157 150 161 157
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $1.14 $1.14 $1.17 $1.14 $1.14 $1.08 $1.13 $1.19
Rent per bu. of soybean yld $4.11 $4.10 $4.21 $4.10 $4.04 $3.86 $4.16 $4.27
Rent per CSR index point $2.64 $2.55 $2.61 NA $2.81 $2.60 $2.49 $2.78
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $160
Grass hay, established $119
Oats $140
Improved permanent pasture $56
Unimproved permanent pasture $44
Pasture, $/AUM NA
Cornstalk grazing NA
24
Page 4 Cash Rental Rates for Iowa - 2009 Survey
2009 CASH RENTAL SURVEY FOR AREA 3
Area Cerro
County Average Butler Gordo Floyd Franklin Hancock Mitchell Winnebago Worth
Number of responses 120 20 15 14 16 17 10 18 10
2004 - 2008 Avg. Corn Yield 177 180 172 174 179 177 176 181 175
2004 - 2008 Avg. Soybean Yield 49 51 48 49 49 50 50 50 48
Avg. Row Crop CSR Index 79 80 78 82 81 77 83 73 81
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $194 $208 $221 $178 $221 $204 $166 $180 $174
High quality third
Average response $229 $248 $264 $213 $269 $239 $189 $211 $203
Range of responses 170 - 350 175 - 360 145 - 300 175 - 350 200 - 315 145 - 230 135 - 290 150 - 280
Medium quality third
Average response $194 $209 $220 $178 $219 $202 $170 $179 $172
Range of responses 145 - 300 150 - 300 140 - 250 150 - 290 160 - 250 142 - 230 125 - 260 140 - 210
Low quality third
Average response $159 $167 $179 $145 $175 $171 $139 $150 $148
Range of responses 114 - 250 130 - 250 125 - 200 145 - 240 140 - 200 120 - 160 110 - 220 130 - 170
Typical Corn Yield, bu. per acre
High third 191 194 190 189 192 191 191 194 190
Middle third 173 177 171 169 176 176 173 175 170
Low third 147 145 146 144 155 155 141 153 138
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $1.10 $1.14 $1.28 $1.01 $1.25 $1.16 $0.92 $1.01 $1.02
Rent per bu. of soybean yld $3.93 $4.01 $4.56 $3.56 $4.53 $4.12 $3.25 $3.66 $3.75
Rent per CSR index point $2.44 $2.54 $2.81 $2.13 $2.73 $2.67 $1.93 $2.50 $2.19
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $160 $177
Grass hay, established $126
Oats $150
Improved permanent pasture $69
Unimproved permanent pasture $42 $43 $38
Pasture, $/AUM $5
Cornstalk grazing NA
25
Cash Rental Rates for Iowa - 2009 Survey Page 5
2009 CASH RENTAL SURVEY FOR AREA 4
Area
County Average Allamakee Bremer Chickasaw Clayton Fayette Howard Winneshiek
Number of responses 79 10 18 13 8 10 11 9
2004 - 2008 Avg. Corn Yield 173 169 181 173 175 174 169 175
2004 - 2008 Avg. Soybean Yield 50 48 52 49 53 51 47 49
Avg. Row Crop CSR Index 78 80 82 77 74 77 76 77
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $173 $157 $190 $170 $177 $191 $157 $184
High quality third
Average response $207 $200 $218 $195 $213 $232 $181 $219
Range of responses 145 - 242 160 - 300 145 - 240 190 - 250 200 - 310 140 - 230 175 - 280
Medium quality third
Average response $175 $161 $192 $166 $181 $195 $157 $186
Range of responses 125 - 230 150 - 250 130 - 200 150 - 200 180 - 250 115 - 200 150 - 215
Low quality third
Average response $139 $111 $159 $149 $137 $144 $133 $146
Range of responses 90 - 135 100 - 225 125 - 180 110 - 150 125 - 165 105 - 160 120 - 165
Typical Corn Yield, bu. per acre
High third 190 189 195 188 193 190 186 193
Middle third 167 167 177 156 168 171 165 173
Low third 137 133 143 136 134 145 129 145
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $1.00 $0.89 $1.05 $0.98 $1.01 $1.12 $0.93 $1.05
Rent per bu. of soybean yld $3.46 $3.15 $3.66 $3.45 $3.34 $3.84 $3.32 $3.75
Rent per CSR index point $2.21 $1.86 $2.30 $2.20 $2.36 $2.50 $2.04 $2.37
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $183 $164 $188 $190
Grass hay, established $138 $128 $134
Oats $130
Improved permanent pasture $69 $91
Unimproved permanent pasture $37
Pasture, $/AUM $13 $13
Cornstalk grazing $7
26
Page 6 Cash Rental Rates for Iowa - 2009 Survey
2009 CASH RENTAL SURVEY FOR AREA 5
Area
County Average Buena Vista Cherokee Ida Monona Plymouth Sac Woodbury
Number of responses 146 14 10 11 8 73 18 12
2004 - 2008 Avg. Corn Yield 167 173 176 171 151 167 172 161
2004 - 2008 Avg. Soybean Yield 50 50 55 50 45 50 51 46
Avg. Row Crop CSR Index 69 76 69 66 NA 64 75 62
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $198 $185 $198 $222 $204 $177 $204 $196
High quality third
Average response $235 $218 $232 $265 $253 $207 $238 $231
Range of responses 165 - 275 145 - 300 200 - 350 220 - 300 120 - 300 160 - 300 165 - 300
Medium quality third
Average response $195 $183 $193 $226 $191 $175 $200 $194
Range of responses 140 - 220 140 - 230 165 - 300 185 - 225 110 - 250 140 - 250 175 - 225
Low quality third
Average response $165 $155 $169 $175 $169 $149 $175 $164
Range of responses 115 - 200 125 - 200 150 - 200 150 - 200 100 - 200 135 - 200 150 - 200
Typical Corn Yield, bu. per acre
High third 188 189 195 186 179 186 194 185
Middle third 165 170 177 164 149 166 171 159
Low third 136 138 151 137 118 137 139 134
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $1.21 $1.07 $1.14 $1.30 $1.37 $1.10 $1.25 $1.24
Rent per bu. of soybean yld $4.09 $3.67 $3.63 $4.46 $4.62 $3.67 $4.24 $4.36
Rent per CSR index point $2.94 $2.42 $2.89 $3.37 NA $2.87 $2.85 $3.24
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $158 $161 $156
Grass hay, established $112 $101
Oats $143 $140
Improved permanent pasture $76 $99 $69 $73
Unimproved permanent pasture $54 $70 $48
Pasture, $/AUM $20 $20
Cornstalk grazing $8 $8 $6
27
Cash Rental Rates for Iowa - 2009 Survey Page 7
2009 CASH RENTAL SURVEY FOR AREA 6
Area
County Average Audubon Carroll Crawford Greene Guthrie Harrison Shelby
Number of responses 83 11 16 11 17 11 7 10
2004 - 2008 Avg. Corn Yield 171 173 176 170 176 165 162 175
2004 - 2008 Avg. Soybean Yield 50 52 51 52 50 48 44 51
Avg. Row Crop CSR Index 71 68 72 67 80 75 66 66
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $189 $183 $210 $199 $190 $158 $195 $188
High quality third
Average response $226 $222 $252 $231 $221 $197 $233 $229
Range of responses 175 - 300 175 - 350 200 - 260 175 - 307 155 - 250 190 - 275 185 - 300
Medium quality third
Average response $186 $180 $210 $194 $192 $159 $190 $179
Range of responses 145 - 232 175 - 275 168 - 220 150 - 250 125 - 200 160 - 240 145 - 200
Low quality third
Average response $155 $149 $169 $171 $159 $120 $163 $157
Range of responses 110 - 192 125 - 200 150 - 185 130 - 200 100 - 150 120 - 200 125 - 185
Typical Corn Yield, bu. per acre
High third 187 185 195 185 191 182 182 192
Middle third 168 168 175 164 176 160 162 173
Low third 139 146 139 138 147 126 133 142
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $1.10 $1.06 $1.21 $1.17 $1.08 $0.93 $1.18 $1.06
Rent per bu. of soybean yld $3.81 $3.56 $4.22 $3.85 $3.83 $3.21 $4.33 $3.64
Rent per CSR index point $2.67 $2.60 $2.93 $2.97 $2.37 $2.03 $2.91 $2.87
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $137 $115 $149
Grass hay, established $103 $92 $124
Oats $127
Improved permanent pasture $77 $68 $85 $59
Unimproved permanent pasture $55 $51 $51
Pasture, $/AUM NA
Cornstalk grazing $7 $4
28
Page 8 Cash Rental Rates for Iowa - 2009 Survey
2009 CASH RENTAL SURVEY FOR AREA 7
Area
County Average Boone Dallas Grundy Hardin Jasper Marshall Polk Story
Number of responses 158 20 18 14 17 10 22 23 34
2004 - 2008 Avg. Corn Yield 180 181 175 183 180 184 185 172 180
2004 - 2008 Avg. Soybean Yield 53 51 52 56 53 55 56 49 52
Avg. Row Crop CSR Index 83 80 82 87 81 81 85 NA 84
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $198 $179 $184 $241 $197 $197 $194 $193 $196
High quality third
Average response $235 $209 $221 $281 $235 $238 $226 $232 $237
Range of responses 160 - 300 170 - 300 235 - 350 180 - 300 200 - 300 200 - 280 170 - 325 160 - 350
Medium quality third
Average response $198 $182 $186 $237 $196 $196 $195 $192 $198
Range of responses 145 - 250 150 - 250 200 - 300 160 - 250 170 - 225 175 - 250 150 - 275 125 - 300
Low quality third
Average response $161 $147 $146 $204 $161 $157 $161 $154 $154
Range of responses 120 - 185 100 - 200 175 - 275 120 - 200 120 - 180 125 - 200 120 - 225 120 - 200
Typical Corn Yield, bu. per acre
High third 196 192 191 206 196 197 200 189 197
Middle third 178 177 174 186 178 179 182 169 180
Low third 150 155 146 158 151 147 149 143 152
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $1.10 $0.99 $1.04 $1.33 $1.10 $1.07 $1.05 $1.13 $1.10
Rent per bu. of soybean yld $3.73 $3.49 $3.47 $4.34 $3.76 $3.57 $3.49 $3.94 $3.80
Rent per CSR index point $2.38 $2.22 $2.19 $2.78 $2.43 $2.42 $2.27 NA $2.32
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $116 $105 $147 $102
Grass hay, established $91 $82
Oats $112
Improved permanent pasture $53 $53 $52 $57 $61 $47
Unimproved permanent pasture $38 $39 $43 $39 $39 $37
Pasture, $/AUM NA
Cornstalk grazing $12
29
Cash Rental Rates for Iowa - 2009 Survey Page 9
2009 CASH RENTAL SURVEY FOR AREA 8
Area Black
County Average Benton Hawk Buchanan Iowa Johnson Linn Poweshiek Tama
Number of responses 99 9 7 13 10 8 18 17 17
2004 - 2008 Avg. Corn Yield 173 174 177 173 172 163 170 180 179
2004 - 2008 Avg. Soybean Yield 51 52 52 50 51 48 49 54 54
Avg. Row Crop CSR Index 82 81 80 80 78 86 83 84 86
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $192 $185 $221 $186 $203 $175 $198 $186 $186
High quality third
Average response $227 $215 $262 $218 $236 $214 $234 $221 $218
Range of responses 175 - 280 170 - 350 190 - 250 210 - 285 140 - 280 165 - 350 150 - 275 170 - 280
Medium quality third
Average response $192 $188 $222 $188 $206 $165 $200 $183 $188
Range of responses 150 - 250 160 - 275 160 - 220 175 - 265 97 - 200 160 - 240 120 - 220 150 - 250
Low quality third
Average response $158 $153 $180 $153 $166 $145 $159 $152 $153
Range of responses 130 - 180 100 - 250 110 - 200 130 - 220 70 - 180 125 - 210 100 - 200 120 - 195
Typical Corn Yield, bu. per acre
High third 190 194 198 190 185 180 185 192 195
Middle third 169 176 178 170 167 152 164 174 173
Low third 137 140 145 137 143 119 130 147 137
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $1.13 $1.17 $1.27 $1.08 $1.16 $1.13 $1.16 $1.01 $1.03
Rent per bu. of soybean yld $3.83 $3.91 $4.32 $3.75 $3.93 $3.85 $4.05 $3.38 $3.41
Rent per CSR index point $2.37 $2.50 $2.82 $2.33 $2.56 $2.11 $2.38 $2.14 $2.13
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $131 $144 $101
Grass hay, established $107 $121
Oats $115 $133
Improved permanent pasture $62 $55 $56 $73
Unimproved permanent pasture $43 $37 $43 $47
Pasture, $/AUM NA
Cornstalk grazing $8
30
Page 10 Cash Rental Rates for Iowa - 2009 Survey
2009 CASH RENTAL SURVEY FOR AREA 9
Area
County Average Cedar Clinton Delaware Dubuque Jackson Jones Muscatine Scott
Number of responses 122 20 20 15 10 15 9 11 22
2004 - 2008 Avg. Corn Yield 170 176 165 175 178 160 168 166 176
2004 - 2008 Avg. Soybean Yield 50 50 48 52 53 49 50 48 52
Avg. Row Crop CSR Index 80 85 77 77 72 73 87 81 86
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $198 $194 $198 $209 $205 $185 $207 $197 $191
High quality third
Average response $240 $228 $238 $250 $252 $227 $259 $242 $228
Range of responses 170 - 310 190 - 280 175 - 320 190 - 300 175 - 275 210 - 300 205 - 300 155 - 285
Medium quality third
Average response $193 $191 $192 $205 $194 $183 $201 $193 $184
Range of responses 135 - 275 135 - 240 135 - 260 160 - 250 125 - 240 170 - 240 135 - 250 127 - 225
Low quality third
Average response $161 $162 $164 $171 $169 $145 $161 $157 $160
Range of responses 100 - 250 100 - 185 130 - 200 130 - 200 110 - 190 140 - 180 100 - 200 100 - 190
Typical Corn Yield, bu. per acre
High third 190 195 184 192 198 181 186 188 197
Middle third 168 173 161 171 175 155 166 165 174
Low third 135 145 131 142 142 120 135 135 132
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $1.18 $1.10 $1.22 $1.22 $1.18 $1.16 $1.25 $1.22 $1.11
Rent per bu. of soybean yld $4.00 $3.90 $4.16 $4.10 $3.97 $3.78 $4.20 $4.22 $3.72
Rent per CSR index point $2.52 $2.29 $2.63 $2.75 $2.87 $2.52 $2.39 $2.49 $2.25
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $165 $148 $200 $172 $159
Grass hay, established $137 $129 $162 $137 $119
Oats $137 $134 $135
Improved permanent pasture $67 $65 $73 $62 $67 $61
Unimproved permanent pasture $43 $43 $48 $42 $41 $38 $41
Pasture, $/AUM $13 $13
Cornstalk grazing $10 $9
31
Cash Rental Rates for Iowa - 2009 Survey Page 11
2009 CASH RENTAL SURVEY FOR AREA 10
Area Mont- Pottawat-
County Average Adair Adams Cass Fremont Mills gomery Page tamie Ringgold Taylor
Number of responses 103 14 12 11 7 14 6 9 12 8 10
2004 - 2008 Avg. Corn Yield 159 167 156 173 159 162 162 154 175 141 146
2004 - 2008 Avg. Soybean Yield 48 50 47 51 48 49 48 48 50 43 45
Avg. Row Crop CSR Index 74 73 76 73 75 75 72 75 71 73 74
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $169 $159 $186 $172 $168 $168 $169 $159 $176 $160 $174
High quality third
Average response $204 $191 $221 $211 $204 $201 $212 $184 $211 $194 $207
Range of responses 134 - 285 175 - 280 175 - 263 150 - 265 160 - 238 175 - 275 140 - 225 170 - 260 175 - 225 170 - 275
Medium quality third
Average response $166 $160 $181 $166 $162 $167 $167 $159 $172 $158 $173
Range of responses 110 - 250 120 - 250 145 - 200 135 - 200 140 - 212 150 - 200 135 - 200 145 - 210 125 - 180 130 - 207
Low quality third
Average response $138 $127 $158 $140 $138 $136 $128 $135 $146 $128 $141
Range of responses 90 - 175 110 - 225 110 - 180 110 - 180 110 - 192 120 - 140 115 - 185 110 - 190 90 - 160 105 - 185
Typical Corn Yield, bu. per acre
High third 176 182 172 189 176 176 178 172 189 157 166
Middle third 154 161 149 168 157 158 158 147 171 133 139
Low third 125 134 117 138 129 135 131 113 143 99 107
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $1.05 $0.93 $1.20 $0.99 $1.02 $1.04 $1.00 $1.05 $1.00 $1.15 $1.17
Rent per bu. of soybean yld $3.51 $3.09 $3.98 $3.38 $3.38 $3.47 $3.38 $3.39 $3.46 $3.77 $3.84
Rent per CSR index point $2.27 $2.11 $2.48 $2.32 $2.16 $2.24 $2.25 $2.16 $2.47 $2.20 $2.29
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $91 $98 $90 $77
Grass hay, established $70 $76 $57
Oats $74
Improved permanent pasture $56 $57 $53 $50
Unimproved permanent pasture $42 $45 $41 $39
Pasture, $/AUM $17
Cornstalk grazing $5 $7
32
Page 12 Cash Rental Rates for Iowa - 2009 Survey
2009 CASH RENTAL SURVEY FOR AREA 11
Area Appa- Madi- Ma-
County Average noose Clarke Decatur Lucas son haska Marion Monroe Union Warren Wayne
Number of responses 88 7 7 6 5 5 5 17 6 5 8 17
2004 - 2008 Avg. Corn Yld 153 150 142 153 141 163 175 159 152 155 156 142
2004 - 2008 Avg. Bean Yld 46 43 41 45 42 49 52 49 44 47 50 45
Avg. Row Crop CSR Index 77 72 75 70 74 82 82 81 75 79 83 67
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $147 $130 $126 $125 $125 $142 $168 $174 $125 $206 $170 $123
High quality third
Average response $180 $159 $153 $156 $156 $167 $212 $213 $156 $248 $209 $156
Range of responses 145 - 166 145 - 160 105 - 190 105 - 190 134 - 190 165 - 260 170 - 275 105 - 190 210 - 275 160 - 260 85 - 212
Medium quality third
Average response $147 $136 $133 $125 $125 $136 $166 $173 $125 $206 $171 $124
Range of responses 120 - 145 110 - 130 90 - 150 90 - 150 110 - 150 135 - 215 130 - 200 90 - 150 190 - 225 160 - 200 75 - 160
Low quality third
Average response $112 $95 $91 $95 $95 $121 $126 $135 $95 $164 $131 $89
Range of responses 85 - 107 80 - 100 70 - 120 70 - 120 90 - 150 100 - 160 100 - 160 70 - 120 150 - 180 120 - 160 65 - 115
Typical Corn Yield, bu. per acre
High third 176 166 166 170 168 180 191 179 174 180 178 174
Middle third 148 135 142 138 135 156 169 157 145 156 151 135
Low third 113 107 107 102 102 123 134 127 99 121 116 97
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $0.95 $0.87 $0.86 $0.85 $0.85 $0.85 $0.93 $1.09 $0.85 $1.33 $1.09 $0.86
Rent per bu. of soybean yld $3.16 $3.03 $2.94 $2.90 $2.90 $2.84 $3.11 $3.55 $2.90 $4.38 $3.42 $2.74
Rent per CSR index point $1.88 $1.80 $1.62 $1.67 $1.67 $1.68 $1.96 $2.13 $1.67 $2.59 $2.03 $1.81
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $90 $79 $73 $73 $64 $118 $73 $95
Grass hay, established $60 $64 $56 $56 $49 $79 $56 $55
Oats $86 $72 $83
Improved perm pasture $51 $43 $63 $44 $44 $44 $52 $44 $51
Unimproved perm. pasture $35 $32 $43 $31 $31 $31 $34 $31 $32
Pasture, $/AUM $19
Cornstalk grazing $7 $7 $9
33
Cash Rental Rates for Iowa - 2009 Survey Page 13
2009 CASH RENTAL SURVEY FOR AREA 12
Area Des Van Wash-
County Average Davis Moines Henry Jefferson Keokuk Lee Louisa Buren Wapello ington
Number of responses 61 6 4 8 7 6 5 4 4 6 11
2004 - 2008 Avg. Corn Yield 166 151 178 173 163 165 161 167 154 158 175
2004 - 2008 Avg. Soybean Yield 48 44 51 51 48 49 47 47 46 48 51
Avg. Row Crop CSR Index 78 67 83 80 80 80 71 80 NA 77 82
Typical Cash Rent for Corn and Soybeans, $ per acre
Overall average $169 $122 $196 $178 $178 $179 $184 $176 $155 $173 $195
High quality third
Average response $212 $149 $233 $228 $238 $204 $225 $215 $198 $234 $233
Range of responses 130 - 165 200 - 250 190 - 272 165 - 320 170 - 230 175 - 255 185 - 260 170 - 225 185 - 275 175 - 275
Medium quality third
Average response $168 $122 $199 $179 $170 $177 $184 $175 $158 $170 $191
Range of responses 100 - 145 198 - 200 140 - 228 125 - 225 150 - 210 140 - 226 160 - 195 135 - 175 150 - 190 141 - 240
Low quality third
Average response $126 $95 $156 $128 $125 $155 $143 $138 $111 $116 $161
Range of responses 80 - 120 145 - 170 120 - 190 100 - 150 140 - 175 100 - 188 130 - 150 90 - 130 110 - 125 140 - 190
Typical Corn Yield, bu. per acre
High third 189 163 195 189 183 181 185 192 165 175 187
Middle third 162 135 170 162 153 160 154 168 139 154 158
Low third 139 94 137 171 110 131 112 136 102 116 120
Average Rents per 5 Year Average Yield or CSR
Rent per bu. of corn yld $1.02 $0.80 $1.13 $1.04 $1.10 $1.11 $1.13 $1.04 $1.01 $1.08 $1.14
Rent per bu. of soybean yld $3.49 $2.74 $3.95 $3.56 $3.71 $3.72 $3.86 $3.67 $3.34 $3.60 $3.94
Rent per CSR index point $2.15 $1.80 $2.39 $2.22 $2.20 $2.29 $2.56 $2.15 NA $2.19 $2.41
Typical Cash Rent for Oats, Hay, and Pasture, $ per acre
Alfalfa hay, established $89
Grass hay, established $66
Oats $111
Improved permanent pasture $55
Unimproved permanent pasture $40 $47
Pasture, $/AUM NA
Cornstalk grazing $13
34
Page 14 Cash Rental Rates for Iowa - 2009 Survey
Overall Average of Typical Cash Rents for Row Cropland
2005-2009
2005 2006 2007 2008 2009
Area 1 $134 $135 $150 $174 $186
Area 2 136 137 150 180 201
Area 3 135 139 155 182 194
Area 4 131 135 144 174 173
Area 5 139 143 153 185 198
Area 6 138 139 149 173 189
Area 7 146 144 156 190 198
Area 8 148 147 164 188 192
Area 9 155 161 172 198 198
Area 10 122 121 135 160 169
Area 11 115 118 129 159 147
Area 12 124 124 144 160 169
State $135 $137 $150 $177 $185
. . . and justice for all Prepared by William Edwards, extension economist
The U.S. Department of Agriculture (USDA) prohibits discrimination in
all its programs and activities on the basis of race, color, national origin, (515) 294-6161, wedwards@iastate.edu and
gender, religion, age, disability, political beliefs, sexual orientation, and Darnell Smith, extension associate
marital or family status. (Not all prohibited bases apply to all programs.)
Many materials can be made available in alternative formats for ADA
(515) 294-8122, darnell@iastate.edu
clients. To file a complaint of discrimination, write USDA, Office of Civil Ann Johanns, extension program specialist
Rights, Room 326-W, Whitten Building, 14th and Independence Avenue, (641) 732-5574, aholste@iastate.edu
SW, Washington, DC 20250-9410 or call 202-720-5964.
Joel Ahrendsen, student assistant
Issued in furtherance of Cooperative Extension work, Acts of May 8 and
June 30, 1914, in cooperation with the U.S. Department of Agriculture.
Jack M. Payne, director, Cooperative Extension Service, Iowa State Univer-
sity of Science and Technology, Ames, Iowa. www.extension.iastate.edu/agdm
File Code Economics 1-8 www.extension.iastate.edu/store
35
Iowa Farmland Rental Rates Ag Decision Maker
1994-2008 File C2-09
Cropland rental rates averaged $165 per acre in For more localized information about cash rental
2008, up $25.00 per acre from 2007. This was the rates, ask for publication FM-1851 at the ISU
largest one-year increase in many years. Cash rent Extension office in your county, or see www.exten-
for pastures averaged $42.00 per acre in 2008, an sion.iastate.edu/Publications/FM1851.pdf, or see
increase of $3.00 from the previous year. Rent as a AgDM File C2-10.
percentage of land value was the same as in 2007.
Estimated Farmland Rental Rates – Iowa 1
Cropland Pasture
Land Land
Cash Rent, Change, Value, Rent as % Cash Rent, Change, Value, Rent as %
Year $/acre Percent $/acre of value $/acre Percent $/acre of value
1994 98.60 -- 1,517 6.5% 26.35 -- 480 5.5%
1995 99.60 1.0% 1,581 6.3% 28.05 6.5% 450 6.2%
1996 105.00 5.4% 1,810 5.8% 28.90 3.0% 575 5.0%
1997 110.00 4.8% 1,700 6.5% 31.10 7.6% 615 5.1%
1998 113.00 2.7% 1,860 6.1% 34.00 9.3% 665 5.1%
1999 112.00 -0.9% 1,930 5.8% 31.00 -8.8% 680 4.6%
2000 115.00 2.7% 1,940 5.9% 29.00 -6.5% 700 4.1%
2001 117.00 1.7% 1,980 5.9% 30.00 3.4% 730 4.1%
2002 120.00 2.6% 2,040 5.9% 30.50 1.7% 760 4.0%
2003 122.00 1.7% 2,120 5.8% 31.00 1.6% 800 3.9%
2004 126.00 3.3% 2,320 5.4% 32.50 4.8% 880 3.7%
2005 131.00 4.0% 2,770 4.7% 36.00 10.8% 1,070 3.4%
2006 133.00 1.5% 3,110 4.3% 38.00 5.6% 1,400 2.7%
2007 140.00 5.3% 3,630 3.8% 39.00 2.6% 1,800 2.2%
2008 165.00 17.9% 4,310 3.8% 42.00 7.7% 2,100 2.2%
1
Prepared from data collected by the USDA, National Agricultural Statistics Service.
. . . and justice for all
The U.S. Department of Agriculture (USDA) prohibits discrimination Issued in furtherance of Cooperative Extension work, Acts of May 8
in all its programs and activities on the basis of race, color, national and June 30, 1914, in cooperation with the U.S. Department of Agri-
origin, gender, religion, age, disability, political beliefs, sexual orienta- culture. Jack M. Payne, director, Cooperative Extension Service, Iowa
tion, and marital or family status. (Not all prohibited bases apply to State University of Science and Technology, Ames, Iowa.
all programs.) Many materials can be made available in alternative File: Economics 1-4
formats for ADA clients. To file a complaint of discrimination, write
USDA, Office of Civil Rights, Room 326-W, Whitten Building, 14th
and Independence Avenue, SW, Washington, DC 20250-9410 or call Prepared by William Edwards, extension economist
202-720-5964. (515) 294-6161, wedwards@iastate.edu
FM-1728 Revised September 2008
36
Iowa Farm Building Rental Ag Decision Maker
Rate Survey File C2-17
The values below summarize rental rates reported to Iowa Individual rental rates will vary according to the age, con-
State University Extension by Iowa tenants, farm owners, dition, size, location, and efficiency of the building being
and farm managers. Information was collected with the rented. The survey assumed that tenants would pay the
2008 farmland cash rental rate survey. cost of utilities. No information was received for types of
buildings not listed below.
Average
Unit on Which No. of Average Average Age
Type of Building Range of Rents Capacity of
Rent is Paid Responses Rent of Building
Building
Swine Production
Farrowing and gestation $/crate/month 5 $10.56 $3.60 - $19.00 16 years 242 crates
Nursery $/pig through 8 $5.17 $5.00 - $6.00 13 years 1,330 head
Nursery $/pig space/yr 14 $25.18 $14.40 - $35.50
Confinement finishing,
- 1 to 10 years old $/pig space/yr 37 $35.05 $18.00 - $42.00 6 years 1,651 head
- over 10 years old $/pig space/yr 49 $29.75 $13.00 - $40.00 21 years 935 head
- over 10 years old $/pig finished 16 $10.57 $8.00 - $12.00
Open front finishing $/pig finished 10 $10.07 $5.60 - $14.00 539 head
Wean to finish $/pig space/yr 5 $38.70 $33.50 - $40.00 10 years 2,316 head
Beef Production
Cattle shed with open lot $/head/day 28 $.12 $.01 - $.28 42 years 251 head
Custom cattle feeding $/head/day 3 $.30 $.25 - $.35
Storage
Grain bin, all $/bu./month 15 $.018 $.01 - $.03
Grain bin, all $/bushel/year 309 $.11 $.03 - $.25 24 years 15,880 bu.
- 10 years old or less $/bushel/year 17 $.14 $.08 - $.25 8 years 14,026 bu.
- over 10 years old $/bushel/year 147 $.10 $.03 - $.25 27 years 14,160 bu.
Grain storage with dryer $/bushel/year 8 $.14 $.08 - $.24
(excluding fuel)
Corn crib $/bushel/year 4 $.10 $.05 - $.20
Hay $/sq. foot/year 6 $.20 $.10 - $.30
Machinery storage, all $/sq. foot/year 136 $.30 $.04 - $1.00 29 years
- 20 years old or less $/sq. foot/year 23 $.34 $.08 - $1.00
- over 20 years old $/sq. foot/year 65 $.25 $.04 - $1.00
Housing
House on farm, all $/year 68 $423 $175 - $750 71 years
- under 50 years old $/year 8 $541 $350 - $700 34 years
- 50 years old or more $/year 36 $393 $175 - $750 80 years
. . . and justice for all Prepared by William Edwards,
The U.S. Department of Agriculture (USDA) prohib- ten Building, 14th and Independence Avenue, SW,
its discrimination in all its programs and activities Washington, DC 20250-9410 or call 202-720-5964. extension economist
on the basis of race, color, national origin, gender,
Issued in furtherance of Cooperative Extension (515) 294-6161,
religion, age, disability, political beliefs, sexual ori-
entation, and marital or family status. (Not all pro-
work, Acts of May 8 and June 30, 1914, in coopera- wedwards@iastate.edu and
tion with the U.S. Department of Agriculture. Jack
hibited bases apply to all programs.) Many materials
M. Payne, director, Cooperative Extension Service,
Morgan Troendle, student assistant
can be made available in alternative formats for ADA
Iowa State University of Science and Technology,
clients. To file a complaint of discrimination, write
USDA, Office of Civil Rights, Room 326-W, Whit-
Ames, Iowa. www.extension.iastate.edu/agdm
File Code Economics 1-8 www.extension.iastate.edu/store
FM 1838 Revised August 2008
37
2009 Iowa Farm Ag Decision Maker
Custom Rate Survey File A3-10
Many Iowa farmers hire some custom machine work in their farm Values below are rates expected to be charged or paid, including fuel
business, or perform custom work for others. Others rent machinery and labor. The average price for diesel fuel was assumed to be $2.50
or perform other services. The information below is based on a survey per gallon. This rate schedule is intended only as a guide. Actual
of 255 Iowa farmers, custom operators, and farm managers. For each custom rates may vary according to availability of machinery in a given
operation, the average rate from the survey and the range are shown. area, timeliness, operator skill, field size and shape, crop conditions,
Twenty-eight percent of the respondents perform custom work, 17 and the performance characteristics of the machine being used. Ma-
percent hire work done, and 55 percent indicated doing both. chinery rental rates can be estimated on the back.
Tillage Harvesting, Drying, and Storing Grain
Average Range Average Range
Chopping cornstalks, / acre $9.80 4.00 - 18.00 Corn combining, / acre $29.70 20.00 - 48.00
Moldboard plowing, / acre 14.10 10.00 - 20.00 -with chopper head, / acre 33.50 26.00 - 44.00
Chisel plowing, / acre 13.70 8.00 - 20.00 Soybean combining, / acre 28.70 20.00 - 48.00
Disk/chiseling, / acre 14.30 8.00 - 20.00 -with air reel, / acre 29.30 22.50 - 36.00
Subsoiling (8 to 15 in. deep), / acre 16.50 9.00 - 25.00 Small grain combining, / acre 26.50 18.00 - 35.00
V-ripping (over 15 in. deep), / acre 16.70 10.00 - 25.00 Complete harvesting (combine, cart, haul to farm storage)
V-ripping with tandem disk, / acre 17.50 10.00 - 25.00 -Corn, / acre 39.20 25.00 - 55.00
Disking, tandem, / acre 11.40 7.00 - 20.00 -Soybeans, / acre 35.30 25.00 - 50.00
Added charge for GPS mapping, / acre 2.10 0.50 - 5.00
Disking, offset, / acre 13.30 10.00 - 17.00
Picking ear corn, / acre (seed corn) 38.30 28.00 - 50.00
Harrowing, / acre 7.60 3.50 - 12.00
Picking ear corn, / acre (farm use) 26.60 12.00 - 40.00
Soil finishing, / acre 11.20 5.00 - 15.00
Drying corn (includes fuel, electricity, labor)
Field cultivating, / acre 10.70 5.00 - 18.00 - continuous flow dryer (/ point / bu.) 0.048 0.030 - 0.070
Rock picking, / acre 11.70 3.50 - 17.00 - bin dryer (/ point / bu.) 0.047 0.030 - 0.070
Cultivating, / acre 9.30 6.00 - 15.00 Bin dryer rental (/ bu.) no fuel or labor 0.081 0.036 - 0.150
Cultivating, ridge-till, / acre 11.50 7.00 - 18.00 Handling grain by auger, / bu. 0.057 0.020 - 0.140
Rotary hoeing, / acre 7.20 4.00 - 12.00 Storing grain, bin rental / bu. / month 0.024 0.010 - 0.050
Land rolling, / acre 7.90 4.00 - 12.00 Storing grain, bin rental / bu. / year 0.145 0.070 - 0.250
Planting Hauling grain
Planting - w/ fert & insect. attach., / a. $14.70 9.00 - 19.50 -in field, grain cart, corn / acre 5.60 2.00 - 10.00
- without attachments, / acre 14.10 9.80 - 21.00 -in field, grain cart, soybeans / acre 4.50 1.00 - 10.00
- w/ splitters & attach., / acre 15.90 10.80 - 22.00 -to farm storage, wagon, / bu. 0.065 0.020 - 0.120
-farm storage to mkt., wagon, / bu. 0.086 0.023 - 0.150
- no-till planter, / acre 15.80 10.00 - 25.00
-to mkt., truck, / bu., (5 mi. 1-way) 0.091 0.050 - 0.150
- no-till planter w/ splitters, / a. 17.60 13.00 - 25.00
-to mkt., truck, / bu., (25 mi. 1-way) 0.151 0.080 - 0.220
- ridge till planter, / acre 16.40 12.80 - 20.00 -to mkt., truck, / bu., (100 mi. 1-way) 0.288 0.160 - 0.400
Drilling soybeans, / acre 14.20 10.00 - 18.00
Drilling soybeans, no-till, / acre 15.10 9.00 - 20.00 Harvesting Forages
Drilling small grain, / acre 13.10 9.00 - 18.00 Hay - mowing, / acre $10.20 6.00 - 14.00
Seeding grass, broadcast with tractor, / a. 9.00 6.00 - 11.00 - conditioning, / acre 10.40 8.00 - 14.00
,
Seeding grass, broadcast with ATV / acre 10.00 5.00 - 14.00 - mowing/conditioning, / acre 12.10 7.50 - 17.00
- raking, / acre 5.70 1.50 - 10.00
Spraying (materials not included) - windrowing, / acre 11.80 10.00 - 15.00
Ground, broadcast, tractor, / acre $6.00 3.00 - 9.00 Hay baling - small square, / bale 0.50 0.25 - 0.75
Ground, incorporated, tractor, / acre 11.20 6.00 - 15.00 - large square, / bale 9.40 7.00 - 12.00
Ground, broadcast, s. propelled, / acre 6.30 3.80 - 10.00 - large round w/o wrap, / bale 9.70 7.00 - 14.00
Ground, banded, tractor, / acre 6.90 5.00 - 10.00 - large round with wrap, / bale 10.80 8.00 - 16.00
Ground, road ditches, / hour 48.40 15.00 - 75.00 Straw or corn stalk baling
Aerial, / acre 8.00 5.00 - 10.50 - large round or square / bale 11.70 8.00 - 15.00
Moving round bales to storage, / bale 3.00 1.30 - 5.00
Fertilizer Application (materials not included) Hauling round bales, / bale, / loaded mile 0.17 0.12 - 0.18
Dry bulk - applied, / acre $4.10 2.00 - 6.50 Silage - chopping, / hr., / row 34.50 25.00 - 50.00
- strip-till, / acre 14.50 10.00 - 18.00 - chop, haul, fill upright, /hr., /row 36.80 11.30 - 50.00
Liquid - spraying, / acre 5.80 4.00 - 8.00 Haylage - chopping, / hr., / ft. head width 12.50 6.70 - 17.10
- strip-till, knifed, / acre 12.30 5.00 - 18.00 Earlage - chopping, / acre 37.80 35.00 - 50.00
Anhydrous - injecting, w/ tool bar, / acre 9.50 5.00 - 17.00 Mowing CRP or pasture, / acre 14.10 8.00 - 27.00
- injecting, w/o tool bar, / acre 8.90 5.00 - 14.00 Mowing fence rows, ditches, / hour 57.30 35.00 - 85.00
Spreading lime, / ton 7.00 3.00 - 15.00 Chopping brush, / acre 17.80 13.00 - 20.00
38 FM 1698 Revised March 2009
Miscellaneous Services Machine Rental (operator, tractor, and fuel not included)
Average Range Average Range
Removing snow (loader), / hour $71.60 45.00 - 100.00 Tractor, / horsepower, / hour $0.20 0.13 - 0.30
Removing snow (blade), / hour 71.00 40.00 - 110.00 Grain drill, / acre 9.10 4.00 - 13.00
Removing snow (blower), / hour 80.60 50.00 - 110.00 No-till soybean drill, / acre 10.60 8.00 - 15.00
Grinding, mixing feed, / ton 9.80 5.00 - 15.00 Corn head for combine, / acre 8.00 6.00 - 10.50
Spreading liq. manure, inject., / 1000 gal. 11.10 7.50 - 15.00 Soybean head for combine, / acre 7.30 5.00 - 10.00
Liquid manure w/ drag line, / 1000 gal. 10.90 9.00 13.00 Grain cart with auger, corn, / acre 4.80 3.00 - 7.50
Loading solid manure, / hour 73.00 20.00 - 120.00 Grain cart with auger, soybeans, / acre 4.30 2.00 - 7.00
Loading, spreading solid manure, / hour 95.70 30.00 - 140.00 Grain wagon, / bu. 0.08 0.05 - 0.14
Power washing, / hour 33.30 20.00 - 50.00 Grain truck (semi), / bu. / trip 0.12 0.07 - 0.16
Building fence, barb, / hr. (no materials) 16.70 10.00 - 22.00 Grain auger, / bu. 0.05 0.02 - 0.08
Building fence, barb, / rod (no materials) 10.50 8.00 - 14.00 Grain vacuum, / bu. 0.08 0.05 - 0.14
Building fence, woven, / hr. (no materials) 16.30 13.00 - 21.00 Grain cleaner, / bu. 0.08 0.07 - 0.10
Building fence, woven, / rod (no materials) 9.50 8.00 - 11.00 Liquid manure spreader, / hour 27.00 23.00 - 34.00
Scouting crops, / acre 4.20 1.50 - 7.00
Solid manure spreader, / hour 31.20 30.00 - 35.00
Soil testing, / sample 8.80 3.00 - 15.00
Skid loader, / hour 50.70 20.00 - 80.00
GPS grid soil testing, / acre 7.10 2.30 - 10.00
Dry bulk fertilizer applicator, / acre 1.80 1.00 - 2.50
Managing stored grain, / bu. 0.05 0.01 - 0.10
Liquid fertilizer applicator, / acre 3.40 2.00 - 5.00
Shearing sheep, / head 2.80 2.00 - 3.15
Livestock hauling with trailer, / loaded mile 2.60 1.50 - 4.00 Anhydrous fertilizer applicator, / acre 4.10 1.50 - 9.50
Livestock hauling with truck, / loaded mile 3.00 2.40 - 3.80 Power washer, / hour 28.60 20.00 - 40.00
Bulldozing, / hr. / ft. of blade 11.50 7.80 - 15.00 Tub grinder, / hour 210.10 100.00 - 400.00
Digging post holes, / hole 3.60 1.00 - 5.00
Driving steel fence posts, / post 2.70 2.00 - 4.00 Custom Farming (tillage, planting, pest control, and harvesting)
Driving wooden fence posts, / post 4.10 3.00 - 5.00 Corn, / acre $100.20 60.00 - 144.00
Building terraces, / ft. (after cost share funds)1.43 1.40 - 1.50 Soybeans, / acre 89.80 50.00 - 139.00
Trenching, / foot 1.18 1.00 - 1.50 Small grain, / acre 79.50 60.00 - 100.00
Tiling (ex. materials), / foot 0.94 0.40 - 2.00
Back hoeing, / hour 78.50 45.00 - 125.00 Farm Labor Wages for Operating Machinery
Clearing land, / hour 112.50 90.00 - 130.00 Spraying or harvesting, / hour $13.00 9.00 - 25.00
Building ponds, / hour 112.10 100.00 - 130.00 Other operations, / hour 12.30 8.00 - 20.00
Chain sawing, / hour 31.10 12.00 - 50.00
Welding machinery, / hour 41.90 20.00 - 60.00
Using truck scale, / load 2.40 1.00 - 5.00
Example:
Estimating Machinery Rental Rate Tandem Disk
1. Custom charge (includes labor, fuel, tractor) $________/acre $11.40
2. Percent of custom charge which is for interest, insurance, depreciation, and repairs
________% 70%
(excluding fuel and labor) (use 70% for tillage, 80% for planting and harvesting)
3. Rental value, including tractor (1 x 2) $________/acre $7.98
4. Tractor rental value, if tractor is not provided:
_______HP x $_______per hp-hour rental rate (see above) / _______acres/hour = $________/acre $2.00
Ex: 150 HP x $.20 (per hp-hour rental rate) / 15 acres/hr = $2.00
5. Implement rental value, without tractor (3 minus 4) $________/acre $5.98/acre
. . . and justice for all
The U.S. Department of Agriculture (USDA) prohibits discrimination in Prepared by
all its programs and activities on the basis of race, color, national origin, William Edwards, extension economist
gender, religion, age, disability, political beliefs, sexual orientation, and (515) 294-6161, wedwards@iastate.edu
marital or family status. (Not all prohibited bases apply to all programs.)
Many materials can be made available in alternative formats for ADA
Darnell Smith, extension associate
clients. To file a complaint of discrimination, write USDA, Office of Civil Ann Johanns, extension specialist
Rights, Room 326-W, Whitten Building, 14th and Independence Avenue,
SW, Washington, DC 20250-9410 or call 202-720-5964. Farm Machinery Economics
Issued in furtherance of Cooperative Extension work, Acts of May 8 and Internet home study course:
June 30, 1914, in cooperation with the U.S. Department of Agriculture. www.extension.iastate.edu/ames
Jack M. Payne, director, Cooperative Extension Service, Iowa State
University of Science and Technology, Ames, Iowa.
www.extension.iastate.edu/agdm
www.extension.iastate.edu/store
File: Economics 1 - 1
39
Survey of Iowa Leasing Ag Decision Maker
Practices, 2007 File C2-15
T
he Iowa farmland rental market has undergone 2002 and 2007. Table 1 provides a breakdown of Iowa
considerable change in the past few years. The farmland by type of tenure.
boom created by the demand for biofuels,
changes in technology, and changes in the demograph- Table 1. Farmland Tenure in Iowa as a Percent of All
ics of farmland owners have all created uncertainty with Acres
respect to the farmland rental markets. STATE OF IOWA 2007
This publication discusses the characteristics of Iowa Owner Controlled: 46%
farmland leases, based on a survey conducted every Owner operated 37%
five years. Farmland rental rates are updated annually. Custom farmed 2%
They can be found in the ISU Extension Publication, Government conservation programs
7%
FM 1851. They are also available online from the Ag and other uses
Decision Maker Web site at: www.extension.iastate.
edu/agdm. Leased: 54%
Cash rent 42%
The percentage of Iowa farmland that is leased has been
relatively stable the past few decades. But, the mixture Crop share 12%
and the types of leases have changed considerably. One Other type of agricultural lease <1%
of the major reasons for these changes is the aging farm-
land owner and the shift toward more land being owned Total: 100%
by people living outside of Iowa.
Table 2 shows the change in land tenure since the 1982
The following is a summary of average characteris- survey. This table includes only the acres that are oper-
tics found for leased Iowa farmland. The data used to ated by the owner. Custom farmed acres and govern-
compile this information comes from the 2007 Iowa ment programs acres have been omitted because they
Land Ownership and Tenure survey. This was a random have changed so much over time, especially the govern-
sample, telephone interview of Iowa landowners. Due ment acres. Notice in Table 2 that the percentage of
to the nature of the survey the data presented here are acres being cash rented has steadily increased while the
based on the percent of farmland, not the percent of owner operated acres have steadily decreased.
farmers or leases. Although in most cases the results
would be similar, given the nature of the survey it is Table 2. Change in Percentage of Iowa Farmland by
important to remember that it represents the percent Tenure*
of farmland and not individual leases. The 2007 Iowa 1982 1992 2002 2007
Land Ownership and Tenure survey is an update of
previous surveys conducted by Iowa State University Owner operated 55% 50% 41% 40%
Extension. Cash rent lease 21% 27% 40% 46%
Crop share lease 21% 22% 18% 13%
The survey results are intended for informational pur- Other type of lease 1% 1% 1% <1%
poses only. The characteristics of an individual farm * Values do not include Government conservation
lease should be determined by the landlord and the program or custom acres
tenant.
Lease Characteristics
Tenure The general lease characteristics for all leased farmland
The distribution of Iowa farmland based on tenure has in Iowa are presented in Table 3.
remained relatively stable since the 2002 survey. The
notable exception to this is the percent of farmland Cash leases are the most prevalent, accounting for
that is leased using a cash rent lease. Cash rented land 42 percent of all farmland and 77 percent of leased
increased by five percent of all Iowa farmland between farmland.
FM 1811 September 2008
40
Page 2 Survey of Iowa Leasing Practices, 2007
A few cases reported something other than a cash or age crop share acre has been leased by the same person
crop share lease. These were labor exchanges or some- almost twice as long as a cash rented acre.
thing of a unique nature. Because these types of leases
were less than .5 percent of all leased land they will not Table 3. Characteristics of Leased Iowa Farmland,
be discussed further in this publication. 2007
All
Table 3 reveals some of the differences between the cash Cash Crop
Leased
and crop share leases. The cash lease acres are more Rent Share
Acres
likely to have a written lease and they have been in ef-
fect fewer number of years compared to the crop share Percent of leased acres 77% 22% 100%
leases. The crop share lease acres are more likely to be Written lease used 72% 50% 67%
owned by someone who lives on the farm and they are Leased to a relative 31% 40% 33%
more likely to be rented to a relative. Professional farm man-
3% 12% 5%
ager used
Approximately two-thirds of all leased acres use a writ-
ten lease. This is an increase from past years and is a Owner resides on the
32% 37% 33%
move toward recommended practices regardless of the property
type of lease. Fixed term lease 25% 13% 23%
Average tenure of current
The use of a professional farm manager is more com- 9.5 18.1 11.3
tenant (years)
mon for crop share leases.
Leased farmland in Iowa was equally divided between Cash Rent Lease Characteristics
cash and crop share leases in 1982. The trend is toward Table 4 shows selected characteristics of the cash rented
more cash rent and this trend is likely to continue. land in Iowa. The majority of the land is leased for an
Recent changes in demand for agricultural commodities indefinite period. Of the cash rented farmland under a
and the fact that more crop share acres are leased to a fixed time period lease almost half (43 percent) are for
relative may slow this rise toward cash rents. The aver- three or more years.
Table 4. Characteristics of Cash Leased Farmland in Iowa; Percent of Acres, 2007
Fixed Indefinite
Length of lease 25% 75%
1 year 2 years 3 years > 3 years
Number of years for a fixed lease 37% 20% 29% 14%
Yes No
Rent amount is fixed 88% 12%
Price &
Yield Price
Yield
Nature of flex for flexible rent payments 28% 10% 62%
1 2 3 Other
Number of rent payments per year 32% 58% 7% 4%
1 2 to 5 6 to 10 11 to 20 > 20 Average
Number of years tenant has rented 6% 27% 23% 28% 15% 9.5 yr.
Once or
Never Monthly Weekly Daily
Twice
How often landlord visits farm during year 7% 23% 25% 17% 27%
41
Survey of Iowa Leasing Practices, 2007 Page 3
A variable/flexible cash rent was used for 12 percent schedule was used in a majority of the cases. The distri-
of the cash rented acres. This is a slight increase from bution of the payments by number of payments and time
last survey but a somewhat lower percentage than had of year is shown in Table 5.
been expected given the changing nature of commodity
prices. Most of the flexible leases used both price and Crop Share Lease Characteristics
yield to determine the rent payment. Table 6 presents the general characteristics for the land
using a crop share type of lease. The length of crop
There is a fairly stable cash rent tenancy situation in share leases tended to be more indefinite than cash rent
Iowa. The average length of tenancy was 9.5 years, and leases and even where there was a fixed period it tended
43 percent of the cash rent acres have been rented by the to be for a longer term.
same tenant for more than 10 years.
The crop share leased acres have been with the same
Table 4 shows that more than half of the cash rented tenant longer than for cash lease acres. Almost two-
acres are visited by the owner at least once a month. thirds of the crop share leased land has been with the
However, seven percent of the cash rented acres are same tenant more than 10 years, whereas less than half
never visited by the owner during the growing season. (43 percent) of the cash leased land has been with the
same tenant that long.
Almost 90 percent of the cash rent acres reported having
either one or two payments per year. A two payment
Table 5. Distribution of Annual Rental Payment Schedules Based on Percent of Cash Rent Acres, 2007
Annual January April July October
Rent Payment Percent of to to to to
Schedule Acres March June September December
100% 32% 49% 6% 3% 41%
50-50 58%
First payment --- 74% 17% 3% 6%
Second payment --- 9% 2% 20% 69%
33-33-34 4%
First payment --- 93% 7% --- ---
Second payment --- --- 32% 61% 7%
Third payment --- --- --- 10% 90%
25-25-50 1%
First payment --- 35% 65% --- ---
Second payment --- --- --- 100% ---
Third payment --- 35% --- --- 65%
Table 6. Characteristics of Crop Share Leased Farmland in Iowa; Percent of Acres, 2007
Fixed Indefinite
Length of lease 12% 88%
1 year 2 years 3 years > 3 years
Number of years for a fixed lease 40% 14% 8% 37%
1 2 to 5 6 to 10 11 to 20 > 20 Average
Years tenant has rented 3% 10% 21% 27% 39% 18.1
Once or
Never Monthly Weekly Daily
Twice
How often landlord visits farm
13% 27% 19% 12% 29%
during year
42
Page 4 Survey of Iowa Leasing Practices, 2007
An interesting observation is that the percent of the ous aspects of crop production. Notice that the tenant
crop share land that is never visited by the owner is al- makes most of the decisions.
most double the percent of land that is cash rented and
never visited. Table 9 shows how grain hauling is divided on crop
share leased acres. Notice there is a difference in who
The distinguishing characteristic between cash and crop pays for the grain hauling and some differences in
share leases is that some of the costs and/or the yield is where the grain is hauled.
divided between the landlord and the tenant. Table 7
presents the break down of the division of the crops and Demographic Characteristics
expenses for the crop share leased land in Iowa. The following tables present some selected characteris-
Notice in Table 7 that for the most part the typical tics of leased Iowa farmland. The changing conditions
50-50 crop share is still the predominant form of crop with respect to Iowa land and land ownership are a
share leased acres. The notable exceptions to the rule source of concern for many citizens. Who will farm the
are for some custom applications and for lime. land in the future and how will it be farmed are ques-
tions being asked.
One of the features with a crop share lease is there has
to be one decision maker or some form of joint deci- Table 10 presents the breakdown of Iowa farmland
sion making for input use, crop type, and other similar based on the gender of the landowner. In estimating
decisions. these percentages, farmland owned by a husband and
wife is assumed to be equally owned so this source of
Table 8 shows how the crop share acreage is divided possible gender bias can be removed.
with respect to who is making the decisions for the vari-
Table 7. Distribution of Crop Share Acres Based on the Portion of Yield Received or Percent of Costs Paid by
the Owner, 2007
25 to 51 to Not Used/
0% 50% 100%
49% 99% Reported
Yield* --- 4% 93% 3% --- ---
Seed 2% 4% 88% --- 3% 3%
Fertilizer 1% 3% 88% --- 4% 4%
Custom fertilizer application 14% 1% 64% --- 3% 18%
Herbicides 3% 4% 83% --- 5% 5%
Insecticides <1% 3% 87% --- 5% 5%
Custom pesticide application 13% 1% 57% --- 2% 28%
Liming 1% 3% 66% 1% 15% 13%
Drying 3% 4% 77% 3% 3% 10%
Custom combine 12% 1% 13% --- --- 74%
* Yield is percent received, all others are costs paid by owner.
Table 8. Distribution of Crop Share Acres Based on Decision Making Roles, 2007
Owner Tenant Joint
Don’t Use/ NR
Decides Decides Decision
Crop to plant 1% 47% 52% ---
Seed variety 3% 74% 22% ---
Fertilizer --- 73% 25% 1%
Pesticides --- 81% 19% ---
Owner Only Tenant Only Together Separately No Insurance
Crop insurance 16% 21% 13% 48% 2%
43
Survey of Iowa Leasing Practices, 2007 Page 5
Table 9. Distribution of Crop Share Acres Based on Grain Table 10. Distribution of Iowa Farmland
Handling Based on Tenure and Gender, 2007
Who Pays for Hauling Owner’s Share of the Crop Male Female
Owner Tenant Shared NA/NR Owner operated 62% 38%
12% 53% 33% 2% Custom acres 67% 33%
Government program acres 54% 46%
If the Tenant Hauls, Where Do They Haul the Grain Cash rent 47% 53%
Field to Farm Farm to Elevator Crop share 42% 58%
24% 76% All farmland 53% 47%
Notice in Table 10 there are considerable differences in owners continued in 2007. Table 12 presents the distri-
the percentage of acres by gender based on the type of bution of land based on the age and tenure of the owner.
tenure. Male ownership dominates the owner-operator
category but females are the primary owners of rented The results in Table 12 are not surprising. It shows a
land. relatively younger owner operator population and a
higher percentage of the land owned by those who are
Table 11 shows the percentage of farmland based on the renting the land. For crop share rented land, almost half
residence of owner. Similar to the data based on gender is owned by people over the age of 75.
of ownership, the type of tenure has an influence on
where the owner resides. As would be expected, consid- The landowners were asked their primary reason for
erably more owner operators live on a farm. The crop owning the land. Most people have multiple reasons but
share rented land has the most rented land owned by we asked the respondents to select the primary reason.
people living on a farm but also living in a city of more Understanding people’s motivation for owning land can
than 50,000 inhabitants. help us as we prepare for the future, especially with re-
spect to the amount of land that will be changing hands
The aging of Iowa’s farmland owners has been a phe- in the next several years.
nomenon for a number of years. The increasing age of
Table 11. Distribution of Iowa Farmland Based on Tenure and Residence of Owner, 2007
Town with Town with
On a Rural Town with City with
2,500 to 10,000 to N/A
Farm Area < 2,500 > 50,000
10,000 50,000
Owner operated 81% 4% 6% 4% 2% 3% %0
Custom acres 47% 6% 0% 2% 10% 35% %0
Government program acres 58% 10% 12% 11% 2% 6% %0
Cash rent 39% 8% 17% 19% 6% 11% 0%
Crop share 45% 5% 6% 5% 15% 20% 3%
All farmland 57% 6% 11% 11% 5% 9% 1%>
Table 12. Distribution of Iowa Farmland Based on Tenure and Age of Owner, 2007
< 25 25 - 34 35 - 44 45 - 54 55 - 64 65 - 74 > 75
Owner operated 0% 3% 11% 23% 27% 25% 11%
Custom acres 0% 0% 11% 7% 29% 9% 44%
Government program acres 0% 0% 8% 19% 31% 25% 15%
Cash rent <1% 1% 3% 8% 17% 30% 40%
Crop share --- 4% --- 8% 16% 26% 47%
All farmland <1% 2% 6% 15% 22% 27% 28%
44
Page 6 Survey of Iowa Leasing Practices, 2007
Table 13. Distribution of Iowa Farmland Based on Primary Reason for Owning and Tenure, 2007
Current Long-term Family/ Home/ Recreation/
Tax N/A
Income Investment Sentimental Way of Life Fun
Owner operated <1% 59% 20% 14% 4% 1% 2%
Custom farm 0% 35% 47% 14% 4% 0% 0%
Government pro-
0% 40% 31% 21% 5% 1% 1%
gram acres
Cash rent <1% 39% 30% 30% 2% <1% <1%
Crop share 1% 45% 23% 25% 2% --- 3%
All farmland <1% 47% 26% 22% 3% 1% 1%
Table 13 shows the primary reason given for owning It is interesting to note that, for the most part, there isn’t
land based on the tenure of the owner. The column too much difference in the tenure styles with respect to
labeled tax in the table generally refers to those who why they own the land. Owner operators rely on the
answered that capital gains taxes were a consideration land more heavily for current income and less for senti-
in their ownership. mental reasons but nonetheless indicated somewhat of
an emotional attachment to the land ownership.
Figure 1. Regional Variation:
The land ownership survey divided
the state into seven regions consis-
tent with earlier ownership surveys.
The distribution of counties into
each region is shown in Figure 1.
Table 14 presents the regional break
down with respect to tenure charac-
teristics. Notice there is consider-
able variation in tenure practices
around the state. The Southern
region has the highest percentage of
land that is owner operated while
the Northern region has the lowest
percentage owner operated. These
two areas are just reversed in terms
of order when considering the per-
cent of land that is cash rented.
Table 14. Tenure of Iowa Farmland by Region, 2007
North- South- North North-
Northern Southern Eastern
west west Central east
Percent of Iowa farmland 12% 12% 7% 14% 16% 16% 23%
Owner controlled 44% 40% 23% 29% 59% 46% 48%
Custom farmed 5% 2% ---- 5% 1% 1% 1%
Cash rent 39% 43% 58% 46% 29% 43% 43%
Crop share 12% 15% 18% 20% 8% 9% 8%
Other ---- >1% ---- ---- 2% 1% >1%
45
Survey of Iowa Leasing Practices, 2007 Page 7
Table 15. Selected Lease Characteristics of Iowa Farmland by Region, 2007
North- South- North North-
Northern Southern Eastern
west west Central east
Written lease 78% 58% 75% 76% 61% 59% 66%
With relative 38% 32% 45% 29% 27% 32% 30%
Owner resides on farm 27% 37% 31% 37% 49% 46% 49%
Professional farm manager 3% 6% 12% 9% 5% 3% 2%
Length of tenure (yrs) 10.9 11.0 11.3 12.1 5.9 9.7 9.8
Table 15 shows selected lease characteristics based on More of the crop share leases are between relatives. The
the same regions. The variation among the regions is crop share is one way in which an older party can help
not as great as the tenure but there are differences none- a younger party by sharing risk. This is not only the
theless. One of the biggest differences is the extremely production risk but also the costs of production risk as
short length of tenure for the Southern rented land. It well. The survey has shown that the 50-50 split is still
is hard to explain this level of difference. It might be the most common type of crop share lease.
related to the predominant type of agriculture in the
region or other geographic characteristics. Iowa landowners continue to improve their management
practices. The number of leased acres using a written
Regional differences can be attributed to many different lease has steadily increased. Although most leases con-
factors. Tradition, predominant agriculture, soils and a tinue for an indefinite period it is important to have the
host of other factors lead to the unique nature of each of initial understanding down in writing.
Iowa’s regions.
Iowa agriculture has witnessed many changes over the
Conclusions: past few decades. The next few decades will be no dif-
Leasing farmland has been a part of the Iowa farming ferent. More than half of the land is owned by people
scene for a very long time. Over time the extent and over 65 and more than 40 percent of the rented land is
nature of the practices have changed. Today we are in owned by people over 75. We all hope to retire someday
the midst of another change in Iowa agriculture. The and over the next several years Iowa will see a consider-
biofuel boom has led to record high grain prices and able change in the ownership and tenure of its farmland.
these have led to record high land prices. Rents are tied Good sound leasing practices will help both the tenant
to prices and land values so it only stands to reason that and the landlord.
they are changing as well.
This publication has outlined some of the characteristics
of Iowa farmland tenure and leasing practices. It is al-
ways in the tenant and landlord’s best interest to develop
their own lease but sometimes it is helpful to know what
practices are being followed. Regardless, in the end the
decision has to be made by the two parties.
Iowa is seeing an increase in the amount of land that is
cash rented. It appears that this trend will likely con-
tinue for the foreseeable future. The data show that the
people who use crop share leases have had the leases in
place for a longer period of time and they have had the
same tenant for a longer time. They are also older. This
means it is likely that the crop share lease of today will
be converted to a cash rent. However, there are signs
that this change to cash rent will not continue indefi-
nitely.
46
cows & plows
I
Iowa Cattle Grazing Survey: Part 1 Results
owa’s cattle industry makes up a large portion of the where applicable.
state’s agricultural economy. Plentiful feed resources
make this a viable location for livestock production. There were 448 respondents to the survey, of which 237
Although Iowa is best known for its corn and soybean (53 percent) were involved in a pasture or grazing rent
production, not all land resources are utilized for crop agreement as either a land owner or tenant. There were
production. Due to land type, suitable usage, and owner 163 responses from grazing tenants, 52 from landown-
preference a large portion of Iowa’s lands are used to ers who rented out pasture land, and 13 respondents
graze cattle or other livestock. Some grazing lands are were both tenants and land owners in different grazing
used directly by the owner while other pastures are arrangements.
rented or leased to other producers. To gain information
pertaining to Iowa’s pasture and grazing lease market Figure 1 is a map of the 12 crop survey districts used by
environment, a survey was conducted among agricul- Iowa State Extension. For more geographic differentia-
tural producers and land owners throughout the state. tion across the state survey rent responses were classi-
Respondents were asked questions about the makeup of �ied according to the district in which the respondent is
their lease or rental agreement, characteristics of their located. Some respondents that did not list the location
operation, production methods, current rental rates, of their operation and were not used in any district
and details about their custom grazing agreements analysis, but they were included in the overall results.
Figure 1: ISU Extension crop survey districts
www.iowabeefcenter.org
47 1
cows & plows
Table 1 contains some of the some of the general sta- The average number of pasture acres rented was 115
tistics gained from the survey. On average tenants were acres, and ranged from 7 acres to 1000 acres. Pastures
younger than landowners. The average age of tenants were an average of 8.1 miles from the cow owner’s base
was reported to be 48.7 years of age and the average of operation. Table 1 also contains statistics describing
age of land owners was 65.5 years. Only 9.7 percent of the size and enterprise diversity of the cow owners.
respondents indicated that the landowner was younger
than the tenant.
Table 1. Summary statistics of land owner, tenant, cow owner’s operation
Number of Average Minimum Maximum Standard
observations deviation
Tenant’s age 188 48.7 10 87 12.1
Land owner’s 189 65.5 30 93 12.9
age
Acres in pas- 228 115.3 7 1000 125.8
ture lease
Distance to 211 8.1 0 200 19.0
pasture
Cow owner livestock enterprises (head)
Cow herd 166 122.0 6 710 112.0
Stockers 19 76.5 3 300 67.8
Calf-back- 48 153.4 12 600 137.6
grounder
Cattle finishing 48 321.7 2 2500 537.7
Cow owner crop enterprises (acres)
Corn 116 371.4 10 4500 502.2
Silage 39 41.9 6 280 48.9
Soybeans 96 345.0 10 2500 379.6
Alfalfa 130 80.5 4 600 85.5
Other hay 97 64.9 5 400 65.4
Pasture 175 280.3 15 2200 296.5
The number of pasture acres leased differs between the Table 2 contains the average number of acres in the
individual leases. pasture lease, grazing duration, and average starting
and ending dates.
2 48
cows & plows
Table 2. Pasture Lease Size and Grazing Period
District Number of Average Average Median Average Start Average End
Observations Pasture Length of Length of Date Date
Lease Grazing Grazing
(acres) (days) (days)
1 5 183.5 211.5 180.5 25-Apr 23-Oct
2 14 83.0 185.6 183.0 07-May 08-Nov
3 10 40.3 193.5 183.0 29-Apr 08-Nov
4 7 168.8 187.7 183.0 27-Apr 01-Nov
5 8 101.9 182.6 182.5 25-Apr 24-Oct
6 19 112.2 218.4 213.0 14-Apr 01-Nov
7 26 50.5 196.4 183.0 25-Apr 07-Nov
8 19 85.7 217.9 213.0 16-Apr 20-Nov
9 23 122.0 205.5 199.0 14-Apr 06-Nov
10 45 110.9 253.0 243.0 14-Mar 22-Nov
11 48 158.2 234.5 223.5 04-Apr 24-Nov
12 10 199.8 280.6 274.0 18-Mar 24-Dec
State (Iowa) 237 115.3 222.6 191.0 08-Apr 17-Nov
Respondents from the North Central, Central areas of Respondents were asked to identify some of the char-
the state reported having the smallest average number acteristics of their lease. Table 3 contains results detail-
of acres in their pasture leases. The survey average ing the characteristics of the lease agreements. These
sized pasture lease was just over 115 acres and lasted details include prevalence of one year, multi-year or
for an average of over 222 days. On average grazing evergreen lease agreements; pasture only or whole farm
periods began in the �irst weeks of April and ended use; and duration. Over all, 69 percent of respondents
mid-November. Only 8.7 percent indicated that their were in a pasture only lease agreement, 31 percent
agreement permitted year around use. Southern regions where in a whole farm lease arrangement that included
of the state also appear to have a longer grazing period more than just pasture use.
than those further North.
Table 3. Pasture leasing agreements
Number of Pasture Only Whole Farm Average
Observations Duration
One year only 115 40.4% 10.7%
Multi-year lease 26 7.1% 4.4% 4.1 years
Evergreen, an- 84 22.7% 14.7% 10.1 years
nual renewal
Combined 225 70.2% 29.8%
49 3
cows & plows
On average, if a whole farm was leased, 46 percent of Table 5 is a summary of rental rates based on plant for-
the farm was used for pasture. In addition, 59 percent age type and land productivity across the state. The av-
of whole farm leases priced rent at a rate differing from erage per acre rental price increased with the productiv-
the rest of the farm land. Just over half of the lease ity of the land. The difference in average price between
agreements were one year only arrangements. Ever- low and moderately productive land was $7.39, and
green or year to year renewal leases were used by 37 high quality land rent for $7.99 more than moderately
percent of the respondents. Current evergreen agree-
productive land. Statistically high quality pasture land
ments had been renewed for an average of 10.1 continu-
rented for $28 more per acre than low quality pasture,
ous years. Only 11 percent of respondents used multiple
but there was not a statistical price difference between
year lease arrangements, which had an average length
of 4.1 years. the amount paid for low and moderate quality pasture
across all forage types. The average rent per AUM also
increased by land productivity, but there was not a
A principle portion of the survey was dedicated to statistically signi�icant difference in price. The differ-
Grazing rent & lease rates
requesting current pasture lease rates. Classi�ied by soil ence in average AUM price between low and moderately
productivity and primary plant type population, respon- productive land was $3.11 and $4.30 between moderate
dents reported either per acre or per animal-unit-month and high production land. Also noted in Table 5 is the
(AUM) monthly rental rate. Table 4 contains a summary number of responses used to calculate each average.
of rental price information from the survey. The average The number of survey responses did not permit land
state rent, which included all responses, was $37.89 per productivity to broken down by crop survey district.
acre and $18.69 per AUM. Average rental rates for the
12 crop survey districts are also included
Table 4. Average pasture rents per acre and AUM
Area Annual rent Number of Monthly rent Number of
per Acre Responses per AUM Responses
State (Iowa) 37.89 169 18.69 25
1 52.00 4 — —
2 24.50 4 33.33 1
3 30.08 13 — —
4 25.00 5 13.33 3
5 42.26 7 32.85 2
6 43.23 17 26.00 2
7 39.74 19 8.38 2
8 38.69 12 12.50 1
9 45.15 16 16.35 6
10 41.15 34 15.67 2
11 32.51 32 23.70 5
12 27.17 6 19.45 2
4 50
cows & plows
Table 5. Acre and AUM rents based on forage type and land productivity
Rent per acre Rent per AUM
Land productivity Land productivity
Plant forage type All High Moderate Low All High Moderate Low
Tall cool-season 42.05 59.25 38.96 33.00 18.14 27.33 16.79 12.50
grasses
Number of Responses 107 16 69 8 19 3 14 1
Fescue pasture 40.53 99.33 38.04 25.94 24.63 — 30.00 13.89
Number of Responses 42 3 25 8 3 — 2 1
Warm-season grass 42.94 52.83 44.67 30.00 21.11 — 15.00 —
Number of Responses 17 6 6 2 3 — 2 —
Improved legume/ 45.26 55.00 44.61 35.00 10.00 — 10.00 —
grass
Number of Responses 29 5 19 1 1 — 1 —
Alfalfa 52.96 63.69 44.69 — 15.35 15.35 — —
Number of Responses 18 7 8 — 2 2 — —
Bluegrass pasture 36.98 55.00 36.33 29.50 15.60 — 14.80 —
Number of Responses 46 5 24 12 4 — 3 —
Timber pasture 26.55 — 26.95 29.96 23.83 — 26.25 19.00
Number of Responses 31 — 11 14 3 — 2 1
Other 32.64 — 36.96 20.00 — — — —
Number of Responses 4 — 2 1 — — — —
All forages 37.51 45.33 37.34 29.99 19.49 22.54 18.24 15.13
Number of Responses 174 30 106 39 25 5 16 3
The survey indicated that a majority of pasture is rented to manage grazing and what chemical or mechanical
by the acre rather than by the AUM. Renting pasture by methods were used to improve pasture health and pro-
the acre rather than by its animal carrying capacity may ductivity.
be a simpler arrangement for the land owner by placing
the risk of lower than normal pasture production on the Table 6 contains the percentage of respondents that use
tenant. Renting land by the acre is the common arrange- a pond, creek or �lowing waterway, well water, water
ment for renting cropland, so renting pasture by the hauled by tank, or rural water as their source of supply-
same method would continue a familiar practice. ing water to the cattle grazed on the rented pasture. A
creek or other waterway was used by 57 percent of the
respondents, and just over half, 53 percent, used a pond
The survey examined how pastures were managed. to water the cattle. The least used water sources were
Pasture management
Respondents were asked to indicate how water was rural water and water transported by tank.
supplied to the cattle, how many paddocks were used
51 5
cows & plows
Table 6. Percentage of respondents
by water source and pasture improvement
Water Source % of Respondents
Pond 53%
Creek or waterway 57%
Well 42%
Hauled by tank 3%
Rural water 4%
Total number of respondents: 229
Pasture Improvement % of Respondents
Rotational grazing, 4-7 paddocks 52%
Rotational grazing, 7+ paddocks 16%
Frost seeding a legume 41%
Inter-seeding a legume 24%
Fertilize 77%
Soil test ever 5 years or less 33%
Clip pasture to control height 65%
Spot weed control 85%
Improve water systems 38%
Limit access to waterways 25%
Total number of respondents : 185
Most of the respondents that completed the whole of ture improvement methods had a signi�icant (>0.95)
the survey use at least one of the pasture improvement statistical in�luence on the duration of the grazing
methods listed in Table 6. Over three quarters of the period. However, actual forage production may have im-
respondents fertilize their pastures and 85 percent try proved, but could not be con�irmed by the data collected
to control weed encroachment where necessary. Over from the survey.
half of the respondents divided their grazing pastures
into four to seven paddocks to better manage the graz-
ing, and an additional 16 percent used more than seven A portion of the survey was dedicated to gathering in-
Winter feeding
paddocks. Frost seeding was the preferred method of formation about winter feeding practices. In total there
seeding legumes in an established pasture. Only 25 were 125 respondents that answered these questions,
percent of respondents needed or opted to limit access however not all responses could be used due to incom-
to water ways. Also a correlation analysis found little to plete answers. If alfalfa hay was the primary or sole for-
no relationship between the use of waterways as water age in the winter ration, 3,040 pounds of hay were fed
sources and the likelihood of access to the waterways to each cow during the winter period. Operations that
being limited, but it was found that half of the respon- used both hay and silage fed an average of 2,333 pounds
dents who improved water systems also limited cattle of hay and 2,527 pounds of silage. The average number
access to waterways. of days that cattle were fed stored feed, in general, was
112 days.
A statistical analysis determined that none these pas-
6 52
cows & plows
Table 7 is a breakdown of feeding durations and stored The average quantity of stored feed utilized during the
feed quantity utilization. Using cornstalks and stored winter did decrease when one or both of the other feed
feedstuffs was the most common winter feeding prac- sources were utilized, and average duration of feeding
tice, used by almost half of the survey respondents. stored feed also declined with the used of alternative
Over a quarter used some combination of all three feed sources. There were no respondents that indicated us-
sources. Less than two percent of the respondents did ing stockpiled feed as their only winter feed source.
not use stored feed during the winter feeding period.
Table 7: Summary of feed sources and feeding durations and quantities
Average days on feed source Pounds fed
Feed source % of Cornstalks Stockpiled Stored feed Hay Silage
respondents grazing
Cornstalks only 5% 72
Stored feed only, 10% 133.4 4272 4000
Cornstalks and stock- 2% 82.0 35.0
piled grazing
Cornstalk and stored 47% 79.1 116.2 2930 2792
feed
Stockpiled grazing and 9% 43.5 109.7 3812 120
stored feed
Cornstalks, stockpiled 28% 70.2 43.5 96.0 2465 2284
grazing, stored feed
Overall 75.7 43.1 111.6 2981 2481
When asked if they fed corn as part of the winter feed- 149 respondents 41 percent indicated that they did use
ing ration, there were 158 responses. Of those, 58 some form of a distiller’s or feed source co-product. Co-
percent fed corn at an average of 359 pounds per head products from corn distillation were used by 86 percent
during the winter, while 42 percent of the responses of those who listed the feeds they utilized. Other feeds
indicated that corn grain was not used. The survey also such as soy hulls, bean mud, chicken litter and protein
asked if co-products were fed during the winter. Among pellets were also mentioned.
53 7
cows & plows
plete data was found, intuitive methods were used to
Pasture rent varies between regions of the state. Rental decipher the raw survey data and complete the data as
Conclusion
rates also varied between productivity and forage types. much as possible.
High quality land and desirable forage types, which tend
to have higher productive value, were reported in the The Iowa Cattle Grazing Survey also asked respondents
survey to receive a higher rent value. Common pasture to describe the primary characteristic of any custom
management practices included rotational grazing grazing, cattle leasing or cattle sharing agreements they
systems, seeding legumes in an established pasture, the may be operating under. Results from that portion of the
application of commercial fertilizers, and weed control. survey are in the companion publication entitled “Iowa
Much of the data in this survey was based upon the Cattle Grazing Survey: Custom Grazing, Cow-calf Leasing.”
opinion or records of the respondents. Where incom-
October 2007 / IBC07 - 5
. . . and justice for all
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual
orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Many materials can be made available in alternative formats for ADA clients. To file a complaint of discrimination,
write USDA, Office of Civil Rights, Room 326-W, Whitten Building, 14th and Independence Avenue, SW, Washington, DC 20250-9410 or call 202-720-5964.
Issued in furtherance of Cooperative Extension work, Acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Agriculture. Jack M. Payne, director, Cooperative Extension Service, Iowa
State University of Science and Technology, Ames, Iowa.
8 54
Iowa Cash Rent Farm Lease (Short Form)
Owner: __________________________ Operator: ________________________ Year: ______
1. Legal Description:
2. Term of Lease: Beginning March 1st, 20 , and ending the last day of February, 20 . Continuing thereafter from year to
year, unless terminated by either party according to Iowa Law on or before September 1st effective the following March 1st.
3. There are contract acres available according to county FSA records (FSA form CC-4786).
The following housing, buildings and storage structures located on the Real Estate may be used by the Operator for the following
purposes:
Structure Purpose
In the event of damage or destruction of buildings or structures listed above the Owner will have the option to replace them or provide
their functional equivalent operator for the purpose described above within a reasonable period of time, or make adjustments to the
terms of this lease in lieu of replacement.
4. Cash Rent Operator agrees to pay the Owner cash rent for the use of part or all of the Real Estate as follows:
Description Amount
Cropland acres @ $ $
Cropland acres @ $ $
Established hay land acres @ $ $
Pasture acres @ $ $
Buildings & storage structures, housing $
Total annual rent $
The cash rent shall be due and payable as follows: _____Due Date ____ Amount
_____Due Date ____ Amount
_____Due Date ____ Amount
5. USDA Commodity Program Payments: Payments shall be paid to the Operator unless otherwise agreed on with the Farm
Service Agency.
6. Hunting Rights: Hunting rights belong to the __Owner ___ Operator
7. Division of Expense: All crop production expenses are the responsibility of the Operator. Cost of lime and application will be
treated as follows: ______________________________________
8. Expenses: No expense shall be incurred by the Operator for or on account of the Owner without first obtaining written permission
from the Owner. The Operator agrees to take no actions that might cause a mechanic’s or other lien to be imposed upon the Real
Estate and agrees to indemnify the Owner if actions are taken by the Operator that result in such a lien being imposed.
9. Repair & Maintenance: Buildings and Fences for minor repairs: Owner will furnish all materials and Operator will provide the
labor at no charge. New Fence: Owner to furnish all materials and one-half of the cost of labor. Operator to provide one-half of
the labor and all of the equipment to construct fence. Owner will pay 100% of the cost to clear fence row when necessary.
10. Operator’s Duties: Operator agrees to operate the farm in an efficient and workmanlike manner, control weeds and brush in the
fields, fence rows, road ditches, provide proper maintenance to control erosion and maintain waterways and tiles, and building
lots and all other areas of the farm where access is possible. Operator agrees, on termination of the lease, to yield prompt
possession of the farm to the Owner.
11. Owner’s Duties: Owner agrees to warrant and defend the Operator’s possessions against all persons as long as this lease
remains in effect. The Owner will promptly pay taxes and carry insurance on his/her interest in the property.
IOWA STATE UNIVERSITY 55 FM 1874 Revised June 2005
University Extension
12. Compensation: Operator shall have the right to take away from the farm any movable buildings and fixtures which he/she has
replaced upon the farm at his/her own expense. Such moving must be done within 60 days after termination of the lease. The
Operator must leave the premises from which such improvements are removed in as good condition as they were before said
removal or compensate the Owner for damages. Each party shall present to the other all such claims for compensation in
writing at the termination of the lease. The Operator shall receive compensation from the Owner for the unprotected value for
the following items upon termination of the lease provided that the value and date of completion are documented.
Item a. ____________ Item b. ___________ Item c. ___________ Item d. ___________
13. Transfer of Interest: The Operator agrees not to lease or sublet any part of the Real Estate nor assign this lease to any other
person, nor sublease any or all of the property described herein without prior written permission of the Owner. This lease shall
be binding upon the heirs, assignees, or successors in interest of both parties. If the Owner should sell or otherwise transfer title
to the Real Estate, the Owner will do so subject to the provisions of this lease.
14. Changes in Lease Terms: The conduct, representation, or statement of either party, by act or omission shall not be construed as
a material alteration of this lease until such provision is reduced to writing and executed by both parities as an addendum to this
lease.
15. Right of Entry: The Owner reserves the right to enter the premise at any time for any reason. Upon notice of the lease
termination, the Operator agrees to permit the Owner or the Owner’s lessee or agent to enter the premise to do customary tillage
and operations on any land from which the current crops have been removed.
16. Violation of Terms: If the Operator fails to keep any agreement contained in this lease, the lease shall then terminate and the
Owner or legal representative shall have the right to take immediate possession of the premises.
17. Other Provisions:
18. Arbitration: Any disputes between the Owner and Operator not covered by the terms of this lease may be submitted by either
party for arbitration at a reasonable fee by three disinterested persons, one of whom shall be selected by the Owner, one by the
Operator, and the third by the previously named two. If and when disputes are submitted, a majority decision of the arbitrators
shall be binding upon the parties to the lease.
In Witness whereof, we agree to the terms and conditions of this lease and we affix our signatures this day of
_________, 20____ .
Operator Owner
Spouse Spouse
For (business entity) By (owners representative)
Address Address
Telephone Telephone
Optional Notarization
On this day of ; A.D., 20 before me the undersigned, a Notary public for the County of _____________, State of
___________, personally appeared to me, known to be identical persons named in, who executed the foregoing instrument and
acknowledged that they executed the same as their voluntary act and deed.
Notary Public
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender,
56
religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Many materials can be
made available in alternative formats for ADA clients. To file a complaint of discrimination, write USDA, Office of Civil Rights, Room 326-W, Whitten
Building, 14th and Independence Avenue, SW, Washington, DC 20250-9410 or call 202-720-5964.
Center for Agricultural Law and Taxation
www.calt.iastate.edu
April 2008
IOWA FARM LEASES – LEGAL, ECONOMIC AND TAX
CONSIDERATIONS
‐ by Roger A. McEowen*
Overview written lease. Rather than rely on the selective memories
of both parties, a written lease provides a record of the
There are numerous concepts associated with creating exact terms and conditions agreed to by both the landlord
an effective lease for a farming operation. A good lease and tenant. In this way, a written lease will clarify the
can be a useful tool, but a lease that is inadequate can issues if disputes arise between the landlord and tenant.
cause uncertainty and create problems. Also, income
tax, social security tax, estate and business planning as In Iowa, the statute of frauds requires leases of more
well as other economic issues are associated with farm than one year to be in writing4. This means that for farm
leases. leases that are longer than one year, an oral agreement
is not valid. However, the principles of partial
Basic Principles performance, detrimental reliance and promissory
estoppel may be utilized, with the right set of facts, as
Leasing is of primary importance to agriculture, permitting exceptions to the statute of frauds.5
farmers to operate larger farm businesses with the same
amount of capital and assisting beginning farmers in A Written Farm Lease – Basic Elements
establishing a farming business.1 Farm leases are
conveyances of a possessory interest in property for a Thus, for many reasons it is just good business for each
specific length of time2, but are also contractual party to protect their interests with a written lease. The
obligations which must meet the basic requirements of important elements of an agricultural lease are:
any contract: offer, acceptance, consideration, and
capacity to enter a contract3. 1. An accurate description of the land;
• Offer--Party A indicates a willingness to enter Note: An accurate legal description can be
into a bargain which leads Party B to believe critical in determining rights to crop proceeds
that Party B’s agreement to that bargain is pursuant to security interests and landlord liens
invited and will conclude the bargain. and can help avoid legal battles over boundary
• Acceptance--Party B indicates agreement to the locations. A precise legal description can be
terms of the bargain in the manner invited or obtained from the abstract of title to the
required by the offer. property. The owner should be able to obtain
• Consideration--A bargained for promise, the abstract for the correct legal description of
performance, forbearance. the farmland. Another method of identification
• Capacity--The ability to understand the nature that can be used to supplement the legal
and effects of one’s acts. Those with mental description is the farm number used by the
illness or defect and minors may void contracts. USDA for federal farm programs.
Should a Farm Lease Be in Writing? 2. The identity of the parties and their signatures;
Although many farms are leased under oral agreements Note: Iowa law specifies that the person
in Iowa (and an oral farm lease that doesn’t exceed one holding the leasehold interest must produce
year is enforceable in Iowa) it is preferable to have a crops or provide for the care and feeding of
1
57
livestock, including grazing or feeding of compensated for any improvements the tenant
livestock on the land.6 A lease should include makes to the buildings.
a clear identification of the landlord and the
tenant by name and address. It is also 6. Any special provisions concerning the rights and
appropriate to identify the parties by their tax duties of the parties.
identification numbers (Social Security number
for individuals and federal identification It is a good practice to record written leases. After the
numbers for other entities) for the purpose of lease is notarized, it can be recorded, for a fee. If the
eligibility for farm program payments. lease exceeds five years in duration with renewals, Iowa
law requires that the lease be recorded.8 Failure to
3. The length or term of the lease; record these leases within 180 days is punishable by a
fine not to exceed $100 per day for each day of violation.9
Note: For most leases, the term will be at least
One year. Farm leases usually begin on March The increased complexity of farm operations and the
1 and end on the last day of February of the conflicts that arise regarding the way they should be
next year. Multiple-year leases may not exceed operated demonstrates a real need for written farm
20 years.7 From an economic standpoint, a leases.
tenant may prefer a multiple-year lease if they
must invest in long-term improvements. Such Note: While many farmers still prefer oral
leases should be considered carefully by both leases and are unwilling to use lawyers, the
parties because the lease is a contractual contracting parties should always consider
obligation to the undesireable provisions of the what the consequences could be if a conflict
lease as well as the beneficial ones. Often, it is arises in the future without a written memorial
better to include an automatic renewal clause of their agreement.
and a compensation clause as a means of
mutual goal evaluation. Other Legal Issues
4. The kind and amount of rent and time and place A good husbandry provision. A written farm lease will
of payment; often contain a provision requiring the tenant to farm the
land in a “good and husbandlike manner.” If the tenant
Note: In many farm leases, it may be wise to fails to do so, the lease typically allows the landlord to
include a provision that compensates the tenant enter the property and properly care for the crops and
for the unused portion of longer-term land. “Good husbandry” is usually defined to include
investments. such things as, proper fertilization methods, tilling, weed
control, control of soil erosion, manure application, and a
Example: For example, the application of general requirement that the tenant protect the property
lime and other soil conditioners may be and its natural resources from harm or disposal. A
effective for a period of years. If the tenant landlord may be entitled to damages that can be proven
applies and pays for the soil conditioner, as a result of the tenant‘s use of improper farming
the lease should provide for a method of methods.
calculating payment to the tenant for the
unused portion of time the application Note: Expert advice is available from Iowa
remains effective. State University Extension specialists for help in
determining what constitutes proper farming
A written lease containing such a provision will practices.
prevent one party from reaping the benefit of the
other party’s long term investment without But, in order to successfully sue for damages allegedly
compensation. caused by the tenant’s from poor farming practices, the
landlord may need to rely on a good husbandry provision
5. Responsibility for building maintenance; in a written lease. While a tenant may have a general
duty to use proper farming techniques, the landlord does
Note: The tenant may want the lease to include not necessarily have an associated right to control and
a provision specifying that the tenant will be supervise the tenant’s farming practices. So, a provision
2
58
in a written lease detailing the specific farming practices statutory lien. But, for a contractual lien to be valid
the tenant is to utilize is the best way for a landlord to against third parties, (e.g., subsequent purchasers and
prevail on a lack of good husbandry claim.10 In addition, existing creditors), the lease must be recorded.
a court may require the landlord to give the tenant notice
of the breach and a right to cure before the lease can be Security interests. In some instances, a landlord
terminated. 11 may want to take the steps necessary to perfect a
security interest in the tenant’s crops and/or livestock.
Environmental issues. It may be a good idea to include Lenders and other creditors file security interests in farm
an environmental-related provision in a farm lease. Such products to ensure payment of debts. From the
a provision, for example, could include language landlord’s perspective, however, a security interest may
specifying that: (1) the landlord assures the tenant there provide greater protection than a landlord’s lien,
are no environmental problems; and (2) the tenant will especially if the tenant files bankruptcy.
comply with all applicable environmental laws. In most
instances, the tenant will be liable for violation of Note: A landlord’s lien can be defeated (i.e.,
environmental laws (state and federal) and environmental goes to the bottom of the list of priorities in
contamination that occurs during the tenancy. In some the tenant’s bankruptcy estate) if the tenant
instances, however, a landlord could also be held liable. files bankruptcy. Thus, it may be prudent for
the landlord to take the necessary steps to
The landlord’s lien and security interests. Under Iowa gain a security interest in the tenant’s crops
law a landlord can obtain a statutory lien (claim against and/or livestock. That can be accomplished
the tenant’s property), for the payment of rent, upon all by the landlord making a separate filing to
crops grown upon the leased premises as well as the become a secured creditor.
tenant’s other non-exempt personal property which is
either used or kept on the leased premises during the Additional protection. For landlords that are
term of the lease. 12 The lien is applicable whether the concerned about the tenant defaulting on the rent
lease is a cash rent lease or a crop-share lease, and payment, the following suggestions may provide
applies also to any proceeds of the crop the tenant additional protection in addition to those items mentioned
harvests.13 Exempt property includes: specific personal above:
property, life insurance, social security, disability,
pension, alimony and veteran’s benefits. • Require the rent to be paid at the beginning
of the lease period. If all of the rent is to be
Note: If a tenant has more than one lease paid up front, the rental rate is normally
with a landlord, the landlord may not attach reduced to account for the additional
crops from one lease to satisfy a default on interest accrued due to the early payment;
rent involving another lease. • Use of an irrevocable letter of credit, issued
by the lender on behalf of the tenant, for
Under current law, a landlord’s lien is subject to treatment insuring the payment of rent;
as an “agricultural lien.” That means a landlord’s lien, to • Have the landlord’s name included as the
be perfected, must be filed using a financing statement.14 payee on the check for grain and/or
That’s the same document used by a lender to handle a livestock. As such, the landlord will be
new secured loan. To be effective, the financing required to sign the check before it can be
statement must be filed when the tenant takes negotiated.
possession of the leased premises or within 20 days after
the tenant takes possession.15 In addition, the financing Do changes to the lease have to be in writing? While
statement must include a statement that it is filed for the it is possible to orally modify a written lease agreement,
purpose of perfecting a landlord’s lien. Once a landlord’s it’s always best to make subsequent changes to a written
lien in farm products is perfected, it has priority over a lease in writing. This leaves little doubt, in the future,
prior perfected security interest.16 about the actual terms of the lease and can help to avoid
litigation on the issue.
Lien by contract. A landlord’s lien can also be
created by a language in a written farm lease. Such a Indemnification clauses – liability for negligence.
provision can create a contractual lien against the Many leases contain an indemnification provision that
lessee’s exempt property that is not subject to the states the tenant will compensate the landlord any loss
3
59
resulting from the tenant’s negligence (and vice versa). A Either the tenant or the landlord could be subject to
written contract should give both parties an idea of who litigation if a third party’s easement rights are interfered
will be liable for any accidents which occur on the farm with.
and specify who is responsible for maintaining insurance
coverage. Termination of Farm Leases
Does a crop-share lease form a partnership between A lease can be terminated either by mutual agreement of
owner and operator? The Iowa Supreme Court has the parties (whether via a written lease or oral
found that, in the absence of evidence indicating agreement) or in accordance with the statutory provisions
otherwise, a traditional farm lease does not constitute a for the service of notice.20 Under Iowa law, if the lease is
partnership.17 This is important point. If there is not a not terminated by either of these methods, and involves
partnership, the parties cannot be held liable for the an acreage of 40 acres or more, the lease automatically
other’s debts under the theory of joint and several liability. renews for another year on the same terms and
The elements of a partnership are (1) intent by the parties conditions as the original lease.21
to associate as partners, (2) a business, (3) earning of
profits, and (4) co-ownership of profits, property and The required notice. The lease may contain provisions
control.18 Most boilerplate lease forms contain a outlining the procedure for termination of the lease. If no
provision stating there is no intention to make a such specification is included in the lease agreement, the
partnership. That keeps the landlord/tenant relationship lease must be terminated according to the provisions of
clear to the parties. Iowa law. If either party wishes to terminate the lease,
notice must be served on the other party (or the party’s
What other provisions should be included? The successor) on or before September 1.22 If notice is
parties should add in writing any additional agreements served, the lease terminates the following March 1.
related to the lease, and should tailor the standard form
lease to cover individual requirements for their particular Note: If it is mutually acceptable to all
situation. Additional provisions should be included in the parties concerned, a lease can be
space provided at the end of the lease or in attached terminated or modified at any time.
exhibits that are incorporated into the lease by reference.
Written notice may be given as follows:23
In all situations, it is important for both the landlord and
the tenant to read and understand the terms of the lease • By delivery of the notice on or before
before signing. Consultation with an attorney before September 1, with acceptance of the
executing the lease may be necessary in some service to be signed by the party to the
instances. lease or a successor of the party
receiving the notice.
Easements. If a third party has an easement interest in
the property that is being leased, it is important for the • By serving the notice, on or before
parties to understand the third party’s rights and not September 1, personally, or if personal
interfere with them. Certainly, any easement rights service has been tried and cannot be
should be clearly detailed in the lease agreement. achieved, by publication, on the same
conditions and in the same manner as
Most easements are affirmative easements which entitle is provided for the service of original
another party to limited use or enjoyment of the land notices, except that when the notice is
upon which the easement exists.19 A common example served by publication no affidavit is
is the right to use a roadway across another’s land. Less required. Service by publication is
common are negative easements, which entitle the owner completed on the day of the last
of the easement to prevent a landowner or tenant from publication.
making certain uses of the land. An example might be a
negative easement owned by a neighbor which restricts • By mailing the notice before September
the height of structures built on the farm. 1 by certified mail. Notice served by
certified mail is made and completed
when the notice is enclosed in a sealed
envelope, with the proper postage on
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the envelope, addressed to the party or surrender. These doctrines are based on the conduct of
a successor of the party at the last the parties.
known mailing address and deposited in
a mail receptacle provided by the United A landlord can also terminate a lease without giving the
States postal service. statutorily required notice if the tenant breaches the lease
– such as for non-payment of rent.28 Courts require the
Forcible Entry and Detainer Actions? If a farm lease breach must be positively established. So, it’s a good
has been properly terminated and the tenant does not idea for the landlord to notify the tenant of the conduct
vacate the farm by March 1 of the following year, the that is considered a breach, and the landlord’s intent to
landlord may utilize the Iowa statutory forcible entry and terminate the lease. This may prevent the default
detainer procedure.24 Also, a forcible entry and detainer termination from looking like an excuse for missing the
action is also available if the tenant does not pay rent notice date.
when due, but notice to terminate has not been given.
But, before such an action can be brought, notice must When should termination notice be given? Because
be given to the tenant. there may be uncertainty as to a tenant’s ability to
continue to rent ground because of financial problems, a
Exceptions to statutory notice. Iowa law distinguishes landlord may want to give notice of termination every
between “croppers” and “tenants.” A person is a “cropper” year. This will avoid being locked into another year with
and not a tenant if the landowner supplies the land and a questionable tenant. A landlord will then be free to
the inputs, controls the operation of the farm and pays a lease to another party or enter into a lease with the
portion of the crop to the person raising and harvesting current tenant once that tenant can assure the landlord
the crop. In that situation, the farmer has no legally that rents will be paid.
enforceable interest in the crop or land involved, only has
a contract right for compensation in-kind for their labor, Annual termination may also be advisable when land
and is basically an employee of the landowner (i.e., a values are changing rapidly. Cancellation and
wage earner) that is hired to produce a crop.25 renegotiation of a new lease with an updated rental
Therefore, because a cropper does not have any amount to reflect current rental values may help the
property right in the leased premises, the cropper is not landlord (and/or the tenant) manage risk.
entitled to statutory notice of termination26 - there is no
interest to be terminated. Instead, a cropper’s “lease” What is the landlord’s right of entry and inspection?
terminates upon harvest of the crop. However, farmers The lease may have a provision allowing the landlord (or
with crop-share leases are tenants – they are not someone else) to enter the property after termination of
croppers, and the statutory notice of termination the lease to conduct tilling or fertilization after harvest.
requirement applies. The landlord may do this even if the date of entry is prior
to the termination of the lease. The landlord may also
Note: Historically, the statutory notice enter the property at any reasonable time for the purpose
requirement did not apply to pasture of viewing, seeding, preservation of crops, making repairs
leases. But, that is no longer the rule. or for other reasonable purposes.
Iowa law now defines “farm tenancy” as
a leasehold interest in land held by a General Concerns – Economics and Risk Allocation
person who produces crops or provides
for the care and feeding of livestock on What is the difference between a cash lease and a
the land, including by grazing or supplying crop-share lease? The primary distinction between a
feed to the livestock. crop-share or cash lease involves how the lease
allocates risk between the parties. On that point, here
Another exception from the statutory termination notice are the major concepts to keep in mind:
requirement is for leases involving less than 40 acres.27
1. Cash rent leases allow a farm tenant to pay a
These exceptions may be overcome by incorporating a specific amount of money for the use of part or all of
notice requirement into a written lease. Iowa courts also the described farmland. Cash rent leases will vary in
recognize certain legal doctrines which may make notice the amount of cash rent per acre and will also vary in
unnecessary. These doctrines include: (1) agreement; the due date for payment of the rent. The tenant
(2) waiver and estoppel; and (3) abandonment and may pay a slightly lower rent per acre in exchange
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for payment of all of the cash rent up front. Typically, 5. Risks due to low yields and/or crop prices are
the risk is balanced between the parties by having shared between the two parties as well as the
the lease payments paid in installments, one profits from high yields or prices.
installment in the spring and one or more at harvest.
It will benefit both parties to have the times for Disadvantages of crop-share agreements:
payment set out in writing so there will be no conflict
about when payment is due. 1. Landowner income will be variable because of
yield and price variation as well as changes in
2. Crop-share leases allow the farm tenant to pay shared input production costs.
shares of the crop as rent. Crop-share leases and 2. Accounting for shared expenses must be
cash rent leases can also be combined to utilize both maintained.
methods of payment. Crop share leases should 3. Marketing decisions must be made by
allow the owner and the tenant/operator to share in landowner.
the total farm profits in the same proportion as they 4. The need for tenant and landowner to discuss
contribute resources.29 This principle implies that if a annual cropping practices and become involved
landowner contributes 50 percent of total resources in management on a continuing basis.
and the tenant contributes 50 percent, then profits 5. The lease may need to be reviewed and
should be shared 50/50. Typically, the allocation of changed on a yearly basis because of market
government program payments is similar to the fluctuations and so on.
allocation of the crop profit and crop input
expenses.30 Due to the fact that the government How should the crop be shared between the
program payments are often a significant portion of landowner and tenant? The crop should be shared on
the total return from the farm operation, the lease a percentage basis in a manner that recognizes the
should determine the agreement of the parties inputs (capital, labor, etc.) contributed by each respective
regarding the participation in government programs. party. The landlord’s return is based on the land value,
Resources and profits are not always shared 50/50. real estate taxes and insurance costs. If the landlord has
This could be due to high land values or low tenant a mortgage on the farm, the landlord will want a return
inputs and costs resulting from practices like sufficient to service the loan. The tenant will expect the
minimum tillage and other input differences. rental rate to be within a normal rate of return on land
value. The tenant’s percentage return is based on his or
When should a crop-share lease be considered? her labor and management of the farm.
While most farm leases in Iowa are cash leases, there
are situations that merit at least a consideration of the How should the cost of shared inputs be divided
utilization of a crop-share lease. The parties should between the landowner and tenant? A crop-share
consider the relative advantages and disadvantages of a lease commonly allows yield increasing expenses, such
crop-share lease before executing such an agreement. as fertilizer application, to be shared by the landlord and
tenant in the same percentage as the share of crop
Advantages of crop-share agreements: profits. Sharing a variable cost in the same percentage
as the crop is shared encourages the parties to use the
1. Less operating capital may be tied up by the amount of that input which maximizes net returns to the
tenant due to the landowner sharing costs total operation.
compared to cash rents.
2. Management may be shared between an Farm Leases and Farm Program Benefits
experienced landowner and tenant, resulting in
more effective decisions. The type of lease can also impact eligibility for farm
3. Allows an inexperienced landlord or tenant to program payments. In general, to qualify for farm
take advantage of the experience of an program payments, an individual must be “actively
established landlord or tenant. engaged in farming.” Each “person” who is actively
4. Sales of crops may be timed for tax engaged in farming is eligible for one payment limit of
management and purchased inputs may be federal farm program payments. A tenant qualifies as
timed to shift expenses for tax purposes. This is actively engaged in farming through the contribution of
also true to some extent with cash rent leases. capital, equipment, active personal labor or active
personal management. Likewise, a landlord qualifies as
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actively engaged in farming by the contribution of the retirement, and then during retirement rent out the farm
owned land if the rent or income for the operation’s use of on a non-material participation crop-share or livestock-
the land is based on the land’s production or the share lease.
operation’s results (not cash rent based on a guaranteed
share of the crop). In addition, the landlord’s contribution Tax Considerations
must be “significant,” must be “at risk,” and must be
commensurate with the landlord’s share of the profits and When considering the type of farm lease to utilize, an
losses from the farming operation. issue that is sometimes overlooked is the impact that a
particular type of lease will have on estate and business
A landlord who cash leases land is considered a landlord planning goals and objective for the parties involved
under the payment limitation rules and may not be (particularly for the landlord) as well as the income tax
considered actively engaged in farming. In this situation, implications of the lease.
only the tenant is considered eligible. Under the payment
limitation rules, there are technical requirements that Self-employment tax concerns. From the landlord’s
restrict the cash-rent tenant’s eligibility to receive perspective, rents from real estate and from personal
payments to situations in which the tenant makes a property leased with real estate are excluded from the
“significant contribution” of (1) active personal labor and definition of earnings from self-employment. Likewise,
capital, land or equipment; or (2) active personal income from crop-share and/or livestock-share rental
management and equipment. arrangements for landlords who are not materially
participating in the farming operation are not classified as
Leases in which the rental amount fluctuates with price self-employment income subject to Social Security tax.
and/or production (so called “flex” leases) can raise a Only if the rental income is produced under a cop or
question as to whether or not the lease is really a crop- livestock-share lease where the individual is materially
share lease which therby entitles the landlord to a participating under the lease does the taxpayer generate
proportionate share of the government payments self-employment income.
attributable to the leased land. Under Farm Service
Agency (FSA) regulations,31 a lease is a “cash lease” if it Income received under a cash rental arrangement is not
provides for only a guaranteed sum certain cash subject to self-employment tax, nor does such income
payment, or a fixed quantity of the crop (for example, count toward eligibility for Social Security benefits in
cash, pounds or bushels per acre.) All other types of retirement. An exception to this rule exists if the lessor
leases are share leases. In April 2007, FSA issued a leases land to an entity in which the lessor is materially
Notice stating that if any portion of the rental payment is participating.35 IRS has won several cases in which they
based on gross revenue, the lease is a share lease.32 have successfully attributed the lessor’s material
However, according to FSA, if a flex or variable lease participation in the entity to the leasing arrangement with
pegs rental payments to a set amount of production the result that passive cash rent income is transformed
based on future market value that is not associated with into material participation income subject to self-
the farm’s specific production, it’s a cash lease.33 employment tax.36 But, in the U.S. Circuit Court of
Appeals for the Eighth Circuit (which includes Iowa), if the
Estate and Business Planning Implications rental income represents a fair market rate, the rental
income is not subject to self-employment tax.37
While material participation can cause problems with
respect to Social Security benefits, material participation The key concept for farm landlords attempting to qualify
is required for five of the last eight years before the rental income as self-employment subject to Social
earlier of retirement, disability or death if a special use Security tax is material participation. Rental income is
valuation election is going to be made for the agricultural self-employment income if it results from a material
real estate included in the decedent-to-be’s estate.34 The participation lease. If the lease is a material participation
solution, if a family member is present, may be to have a lease, the income is subject to SE tax. If it is not such a
non-retired landlord not materially participate, but rent the lease, the income is not subject to the tax. A lease is a
elected land to a materially participating family member material participation lease if (1) it provides for material
or to hire a family member as a farm manager. The participation in the production or in the management of
solution, if a family member is not present, is to have the the production of agricultural or horticultural produces,
landlord retire at age 65 or older, materially participate and (2) there is material participation by the landlord.
during five of the eight years immediately preceding Both requirements must be satisfied. While not required,
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a written lease does make a material participation rent lease cannot deduct the cost of fertilizer and lime. A
arrangement easier to establish. farm landlord must be materially participating under the
lease.
Agricultural program payments that are received under a
crop-share or livestock-share lease are considered to be Interest. Most farm interest is fully deductible
SE income for Social Security purposes if the landlord as business interest. Crop-share and livestock-share
materially participates under the lease. leases with substantial involvement in decisionmaking by
the landlord are deemed to be “businesses” for this
Note: Managing earned income in retirement purpose.
years can be important, and may have an
impact on the leasing arrangement. Persons Farm income averaging. Income averaging is
age 65-70 can receive an unlimited amount of available for farmers and fishermen, and allows current
income without loss of Social Security benefits. farm income to be averaged over three prior base years.
For persons age 62-65, however, the earnings The provision is available by election (by filing Schedule
limit in 2008 is $13,560. For excess amounts, J) and provides the benefit of applying lower income tax
benefits are reduced $1 dollar for every $2 rates from the prior base years.
over the limit. Thus, for retired farm landlords
under age 65, they may not be able to receive Iowa income tax issues. Effective January 1, 2007,
full Social Security benefits if they are there is an important provision in Iowa law that is
materially participating under a lease. intended to create an incentive for landlords to lease land
to individuals with relatively low net worth.
Income tax considerations. There are several
important income tax concepts to keep in mind when “Beginning farmer” tax credit. Beginning in
leasing farm land. 2007, a credit against Iowa income tax is available for
landlords who lease agricultural assets to a “beginning
USDA cost sharing payments. Under certain farmer.”38 This provision can have the potential to
federal farm programs, especially those programs entirely eliminate Iowa tax for individuals that lease farm
designed to provide environmental benefits, the USDA property to a beginning farmer for several years. Under
shares in part of the expense associated with complying the provision, the lease must be from two to five years
with the program. If certain requirements are satisfied, a and must be with a tenant who has a net worth of less
farmer that receives cost-share payments can exclude than $300,000. It is not necessary that the tenant be a
them from income. Crop-share and livestock-share first-time farmer, but the tenant must be at least 18 and
landlords are eligible to exclude cost-share payments can be either a family member or non-family member of
from income. the landlord. The amount of tax credit for the landlord
depends on the type of the lease. The credit is five
Soil and water conservation expenses. percent of the gross amount received under a cash lease,
Taxpayers engaged in farming can deduct soil and water and 15 percent of the gross amount received under a
conservation expenses in the year incurred under a one- crop or livestock-share lease. If the landlord does not
time election, rather than capitalizing the expenditures. have enough income to fully utilize the credit in any given
One of those requirements is that the taxpayer be year, the unused amount can be carried forward for up to
engaged in the business of farming. A farm operator or five years. The credit cannot be transferred to any other
landowner receiving rental income under a crop-share or person, but it can be transferred to the taxpayer’s estate
livestock-share lease satisfies the test. But, a landlord or trust upon the taxpayer’s death.39
collecting rental income on a cash rent basis is not
eligible to deduct soil and water conservation expenses * Leonard Dolezal Professor in Agricultural Law, Iowa State
on the associated real estate. The landlord must University, Ames, Iowa, and Director of the ISU Center for
materially participate in the farming operation. Agricultural Law and Taxation. Member of the IA, KS and
NE Bars.
1 McEowen & Harl, Principles of Agricultural Law, p. 7-6,
Fertilizer and lime. A taxpayer can deduct
Agricultural Law Press, Eugene, OR, Rel. 22, Jan. 2008.
fertilizer and lime costs by making and election on the tax 2 Id. at 2-3.
return, if the taxpayer is in the trade or business of 3 Id.
farming. For farm landlords, the lease must be a crop- 4 Iowa Code §622.32(4). The Iowa statute of frauds is a rule of
share or livestock-share lease. A landlord under a cash evidence and not one of substantive law. Thus, the statute
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64
provides a defense, and the party asserting it must raise it by 26 Iowa Code §562.5.
answer or by objection to evidence at trial. See, Harriott v. 27 Id.
Tronvold, 671 N.W.2d 417 (Iowa 2003). 28 McEowen and Harl, Principles of Agricultural Law, p. 7-6,
5 See, e.g., Kolkman v. Roth, 656 N.W.2d 148 (Iowa Agricultural Law Press, Eugene, OR, Rel. 22, Jan. 2008.
2003)(where tenant farmer, operating under oral lease and 29 Id. p. 7-6.
where landlord made assurances that tenant could farm until 30 Id. at 7-7.
tenant retired, made substantial improvements to the farm, 31 7 C.F.R. §1412.504(a)(2).
promissory estoppel available as exception to statute of frauds; 32 Notice DCP-172 (Apr. 2, 2007).
farmer submitted substantial evidence of detrimental reliance 33 Id.
and established the elements of estoppels; landlord also 34 I.R.C. §2032A. A special use valuation election permits the
allowed tenant to make improvements in reliance on oral agricultural real estate contained in a decedent’s estate to be
statements, thus establishing the partial performance valued for federal estate tax purposes at its value for
exception). agricultural purposes rather than at fair market value. The
6 Iowa Code §562.1A. election is an important consideration when agricultural land
7 Iowa Constitution, Article I, §24. values are rising and the date of death value may cause the
8 Iowa Code§ 558.44 (In Iowa, recordation is mandatory for any estate to incur federal estate taxes. For deaths in 2008, the
conveyance of leasehold interest in farmland over five years). maximum value reduction that can be achieved by making the
The lease or conveyance must be recorded no later than 180 election is $960,000.
days after the conveyance is completed. 35 Mizell v. Com’r, T.C. Memo. 1995-571.
9 Id. The tenant is responsible for recording the lease. 36 Bot v. Com’r, T.C. Memo. 1999-256; Hennen v. Com’r, T.C.
10 See, e.g., Meeker v. Shull, 235 Iowa 701, 17 N.W.2d 514 Memo. 1999-306; McNamara v. Com’r, T.C. Memo. 1999-333.
(1944)(tenant’s plowing was excessive and constituted a failure 37 McNamara v. Com’r, 236 F.3d 410 (8th Cir. 2000). The IRS
to farm in a good farm-like manner which breached a written has issued a nonacquiescence in the McNamara opinion. AOD
lease provision specifically prohibiting tenant from plowing CC-2003-003 (Oct. 20, 2003).
pasture without landlord’s consent); McElwee v. DeVault, 255 38 Iowa Code §175.37.
Iowa 30, 120 N.W.2d 451 (1963)(tenant’s omissions 39 For further details concerning the beginning farmer tax credit,
contravened express provisions of written farm lease); see http://www.calt.iastate.edu/beginningtax.htm
Thompson v. Mattox, No. 4-511/03-1650, 2005 Iowa App.
LEXIS 125 (Iowa Ct. App. Feb. 24, 2005)(while tenant has a
duty to use proper farming techniques, landlord has no general
right to control and supervise tenant’s farming practices absent
express provision in written farm lease).
11 See, e.g., Keller v. Bolding, 2004 N.D. 80, 678 N.W.2d 578
(2004).
12 Iowa Code §570.1.
13 Meyer v. Hawkeye Bank & Trust Co., 423 N.W.2d 186 (Iowa
1988).
14 See Iowa Code §§554.9308(2) and 554.9310.
15 Iowa Code §570.1(2)(b).
16 Iowa Code §570.1(2). See also Agriliance, L.L.C. v.
Runnells Grain Elevator, Inc., 272 F. Supp. 2d 800 (S.D. Iowa
2003).
17 Chariton Feed and Grain, Inc. v. Harder, 369 N.W.2d 277
(Iowa 1985).
18 McEowen and Harl, Principles of Agricultural Law, p. 9-13,
Agricultural Law Press, Eugene, OR, Rel. 22, Jan. 2008.
19 McEowen & Harl, Principles of Agricultural Law, p. 7-9,
Agricultural Law Press, Eugene, OR, Rel. 22, Jan. 2008.
20 Iowa Code §§ 562.6, 562.7.
21 Iowa Code §562.6. However, a tenancy will not continue
due to lack of termination notice if there is a default in the
performance of the existing rental agreement. Id.
22 Iowa Code §§562.6, 562.7.
23 Iowa Code §562.7
24 Iowa Code §648.1(2).
25 See Henney v. Lambert, 237 Iowa 146, 21 N.W.2d 301
(1946).
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Center for Agricultural Law and Taxation
www.calt.iastate.edu
January 2008
Iowa Fence Law
‐ by Roger A. McEowen*
Overview authorizes township trustees, acting as fence viewers4, to
decide partition fence controversies and render opinions
Issues involving partition fences are the cause of many that will be binding upon current and subsequent
disputes between Iowa landowners. Partition fences mark owners.5
property boundaries between adjacent landowners. Iowa
has numerous statutes which govern fencing matters. The Fence Dispute Resolution Process
This article addresses the major areas of contention.
If the statutory process for resolving fence disputes is
invoked, a four-step process is involved:
Is there a Duty to Erect and Maintain Fences?
• Step 1 - the complaining landowner
In Iowa, with one exception,1 a landowner does not have must make a written request to the
a legal duty to build a partition fence. However, a other landowner for the erection of a
landowner can be compelled to contribute to the creation fence.
or maintenance of a partition fence upon the written • Step 2 - if Step 1 does not resolve the
request of an adjacent owner. 2 A landowner can also be matter, the complaining landowner
compelled to build or maintain a partition fence on the must make a formal request to the
basis of an agreement – such as utilization of the “right- township trustees to resolve the
hand rule.” That’s an informal arrangement by which the dispute.6
landowners face one another at the mid-point of the • Step 3 - the trustees must give five
fence and agree to maintain their share of the fence to days written notice to all adjoining
their respective right-hand sides. landowners that are liable for the
erection or maintenance of the
For a written fence agreement that details the allocation partition fence concerning time and
of fence maintenance and/or construction, two options place of the hearing.7
exist: (1) adjacent owners can enter into a written • Step 4 - the fence viewers meet and
agreement, or (2) adjacent owners can request an order issue a written order that allocates
from the fence-viewers (township trustees) allocating responsibility for maintenance or
responsibility between the parties. erection of the partition fence.8
The use of a written fence agreement worked out by The fence viewers are to divide responsibility for building
adjacent owners is often overlooked, but Iowa law does and maintaining partition fences equally between the
allow owners of adjoining parcels to file an agreement parties regardless of which party gains primary benefit
with the county recorder of deeds to make an agreement from the fence construction. 9 As mentioned above, the
binding.3 Such an agreement, upon recordation, is decision of the fence viewers is binding. However, a
binding upon the original parties, their heirs and landowner can appeal to the local district court by filing a
subsequent owners. If adjacent owners cannot come to notice of appeal within 20 days after the fence viewers
a mutual agreement, however, the township trustees render their decision, and filing an appeal bond.10
(acting in their capacity as fence viewers) can be called
upon to settle the dispute. State law specifically
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66
Absent an appeal, landowners must construct or maintain trespassing animals. In Iowa, a common law duty exists
their assigned portion of fence as decided by the fence to prevent animals from entering a public roadway
viewers. If a party fails to comply with the decision of the despite the fact the formal fence-in statute was repealed
fence viewers,11 disaffected landowners can request that in 1994.20 As a result, a livestock owner has a duty of
the fence viewers build or maintain the fence. But, the ordinary care to prevent injuries and is liable to the extent
party (or parties) requesting the fence viewers to do so that injuries were reasonable foreseeable. For example,
must pay a deposit to cover the fence building expense, in a 2004 Iowa Supreme Court opinion, a ranch failed to
which will be reimbursed upon collection from the party in inspect the fence and take precautions necessary to
default.12 When the fence work is completed, the protect motorists from stray horses. 21 The ranch argued
landowner in default will have ten days to make the that the statutory repeal of the fence-in requirement
required payments. If payment is not made, the amount relived them of this responsibility.22 The Court disagreed,
will be assessed as property taxes on the disputed and noted that the common law imposed a duty of
property.13 reasonable care upon livestock owners to restrain
livestock.23
What kind of fence can be required? Adjacent landowners also may bear liability for livestock if
a trespass results from negligent maintenance of partition
Iowa law generally requires the erection of a “legal” fence.24 If a legal duty to construct a fence does not exist,
fence. Several options qualify as legal fence under Iowa adjacent landowners will not incur liability.25 When a legal
law: rails, boards, or most commonly— three barbed duty to maintain legal fence exists from a written
wires.14 If a landowner pastures sheep or swine, a fence agreement or order of the fence viewers, negligence by
can also be required to be tight.15 A tight fence requires an adjacent landowner can lead to liability for damage to
the landowner to add woven wires to the partition fence third parties.26 If both parties, however, fail to maintain a
to restrain sheep and swine.16 fence and a third party is injured, negligence will be a jury
question. In lease situations, Iowa courts have held that
a landlords bear no responsibility for damage caused by
Partition fences and livestock owners a tenant’s livestock.27
Iowa is a common-law, fence-in jurisdiction. This means Under Iowa law, a “habitual trespass” occurs when
that a farmer has a responsibility to fence in their own livestock escape their enclosure at least three times in a
livestock. Iowa does, however, follow a conditional fence- 12-month period and trespass onto the same neighboring
out theory. Thus, if an animal escapes as a consequence landowner or the same public road each time.28 In that
of negligent fence maintenance by adjacent landowners, event, the local government may (either on its own
the neighboring landowner will not able to recover initiative or upon receipt of a complaint) make a finding as
damages to their property by the trespassing animal.17 to whether a habitual trespass has occurred. If so, the
Essentially, Iowa places a duty on the non-livestock disaffected neighboring landowner can make written
owner to maintain their portion of the fence and limits the request of the livestock owner that the livestock owner
overall reach of the “fence-in” theory. As noted above, build a fence. If such a fence is not built within 30 days of
adjacent landowners are equally responsible for building receiving the request, the matter can be submitted to the
and maintaining partition fences. fence viewers. The neighboring landowner is not liable
for building or maintaining the fence unless the
Livestock owners must fence and control animals under neighboring landowner is an adjacent landowner.
their care. A livestock owner is liable for the damages
caused by their trespassing animals if the trespass is What if a fence has been improperly located?
caused by the owner’s negligence.18 The concept of
“distraint” may also come into play. Distraint allows a If it is discovered that a fence has been improperly
person to take possession of trespassing livestock until located, but it has been treated as the boundary by the
the costs of distraint (e.g., the cost of keeping and caring adjacent owners landowners there may be a strong
for the livestock and any damages that they caused) are interest in allowing the fence to remain in its current
paid.19 position. Iowa law recognizes this fact and allows a
misplaced fence to continue to serve as the legal
A livestock owner may also be liable for damages to third boundary between adjacent landowners – irrespective of
parties, such as motorists who suffer harm from what a subsequent survey may indicate is the actual true
2
67
boundary. In Iowa, once a fence has been utilized as the be challenged on a more frequent basis. Some states
boundary for a period of 10 years, the fence can establish have formally taken the position that compelling a
the boundary even though a later survey indicates the property owner that does not own livestock to contribute
fence is not on the surveyed line.29 This concept is to the erection or maintenance of a fence is
known as a “boundary by acquiescence.” The adjacent unconstitutional (on Fifth Amendment grounds as a
owners didn’t know where the true property line was, but taking of private property without “just compensation”).36
simply acquiesced in the existing fence line as the actual However, Iowa has not taken this view. 37 The Iowa
boundary by either farming or grazing cattle up to the Supreme Court has held it constitutional to require
fence. Once a court determines that, based on the landowners to share in the expense of creating a partition
evidence, the fence has been treated as a boundary for fence. In a 1995 case, an urban resident complained that
10 years, the fence becomes the true boundary.30 requiring contribution for a fence which provided him no
benefit was unconstitutional. But, the Court disagreed,
A similar concept is where a misplaced fence can noting that Iowa is an agricultural state, and that the
become the true boundary under via a prescriptive burden on the non-livestock owner was minimal.
easement (by prescription). A prescriptive easement
can arise when the adjacent owners know where the true Conclusion
boundary is, know that the existing fence is not on the
line, but continue to use the fence as the property line. In The old maxim remains true – “Good fences make good
that situation, one of the adjacent owners is actually neighbors.” So, to avoid fencing disputes, the best
allowing the other adjacent owner to use some of their practice is to maintain communication with neighbors.
property that they wouldn’t otherwise be able to use if the But it is also helpful to have an understanding of the
fence were in the correct location. The party that is basic principles of Iowa fence law. It is also helpful to
benefitting from the misplaced fence can establish a remember that many potential conflicts can be resolved
prescriptive easement by showing that they have openly in advance through written fence agreements between
and notoriously possessed the land, adversely under a the parties. If that approach doesn’t work, the fence
claim of right, and have had continuous and exclusive viewers can be called upon to make a decision.
use for the statutory period (10 years).31 Regardless of which method is used, it is apparent that
fences will continue to aid the agricultural interests of
Open and notorious possession requires that a Iowa for the foreseeable future.
landowner have used the property in a similar as fashion
as the true owner, which is established by acts such as
improving or maintaining the land.32 That possession be
adverse and under a claim means that the landowner has *Leonard Dolezal Professor in Agricultural Law, Iowa State
made an innocent mistake in locating the boundary and University, Ames, Iowa, and Director of the ISU Center for
had believed that the fence was on the proper location Agricultural Law and Taxation. Member of the IA, KS and
when erected.33 Continuous use for the statutory period NE Bars.
1 See Iowa Code §169C.6 (2007).
requires that a landowner’s use has not interrupted by 2 IOWA CODE § 359A.1A (2006).
another party for the statutory period – 10 years.34 3 IOWA CODE § 359A.13 (2006).
Exclusive use by the landowner claiming the easement is 4
Iowa Code §359.17.
not required, as “mere casual intrusion by others on the 5 IOWA CODE § 359A.3 (2006).
property” does not invalidate the continuity required for a 6 ID.
prescriptive easement to be established.35 If these 7 Id.
elements are established, the fence will continue to serve 8 IOWA CODE § 359.A4 (2006).
as the border between landowners as a result of a 9 See Duncalf v. Ritscher Farms, Inc., 627 N.W.2d 906 (Iowa
prescriptive easement. 2001).
10 IOWA CODE § 359A.23 (2006).
11 The parties must complete the fence work within the
timeframe established by the fence viewers in their decision.
Constitutional issues
Default occurs if a responsible party does not complete
assigned work within 30 days of the completion date
In recent years, the constitutionality of requiring a established by the fence viewers.
landowner to erect and maintain partition fencing has 12 IOWA CODE § 359A.4 (2006).
been questioned. As the trend towards a more urban 13 IOWA CODE § 359A.6 (2006).
society continues, the validity of fencing statutes will likely 14 IOWA CODE § 359A.18 (2006).
3
68
15 IOWA CODE § 359A.21 (2006).
16 IOWA CODE § 359A.20 (2006).
17 Noble v. Chase, 60 Iowa 261, 14 N.W. 299 (1882).
18 IOWA CODE § 169C.4 (2006).
19 IOWA CODE § 169.C1 (2006).
20 See, e.g., Klobnak v. Wildwood Hills, Inc., 688 N.W.2d 799
(Iowa 2004).
21 Id.
22 Id.
23 Id.
24 Mossman v. Amana Society, 494 N.W.2d 676 (Iowa 1993).
25 Jacobs v. Stover, 243 N.W.2d 642 (Iowa 1976).
26 See, e.g., Mossman v. Amana Society, 494 N.W.2d 676
(Iowa 1993)(railroad liable for negligent care of fence, which
lead calf to escape and injure motorist).
27 Byers v. Evans, 436 N.W.2d 654 (Iowa Ct. App.
1988)(landlord had no duty to exercise control over fences
constructed by tenant).
28 Iowa Code §169C.6 (2007).
29 Iowa Code §650.6 (2006).
30 Iowa Code § 650.14. See also Heer v. Thola, 613 N.W.2d
558 (Iowa 2000) (establishment of title via acquiescence
occurs upon court finding that particular boundary has been
acquiesced in for statutory period); Lucas v. Forrester, No. 6-
688/05-1847, 2007 Iowa App. LEXIS 192 (Iowa Ct. App. Feb.
28, 2007)(same); Feldmann v. Ostwinkle, No. 05-1157, 2006
Iowa App. LEXIS 196 (Iowa Ct. App. Mar. 1, 2006) (same);
Post v. Barnette, No. 7-506/07-0097, 2007 Iowa App. LEXIS
1219 (Iowa Ct. App. Nov. 15, 2007) (plaintiff failed to establish
by clear evidence the location of a “definite line” required to find
a boundary pursuant to Iowa Code §650.14).
31 IOWA CODE § 564.1 (2006).
32 See, e.g., Johnson v. Kaster, 637 N.W.2d 174, 179 (Iowa
2001).
33 Collins Trust v. Alamakee County Bd. of Supervisors, 599
N.W.2d 460 (Iowa 1999).
34 IOWA CODE § 564.1 (2006).
35 Johnson v. Kaster, 637 N.W.2d 174 (Iowa 2001).
36 Choquette v. Perrault, 153 Vt. 45, 589 A.2d 455
(1989)(requiring non-livestock owners to build and maintain
fences constituted a compensable taking under the Fifth
Amendment).
37 Gravert v. Nebergall, 539 N.W.2d 184 (Iowa 1995).
4
69
Notice of Termination of Farm Tenancy
To:
Date:
You and each of you are hereby notified that the farm tenancy of the following real estate
situation in ________________ County, ___________________, to-wit: ___________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
will terminate and expire on the first day of March, 20____, and such tenancy will not continue
after said date.
This notice is given to you in accordance with the provision of Chapter 562 of the Code of Iowa,
as amended.
You will therefore take notice and govern yourselves accordingly.
__________________________
__________________________
By________________________
Acceptance of Service
The undersigned hereby accept and acknowledge due, timely and legal service of the foregoing
notice and acknowledge receipt of copy thereof on the date hereof at______________________,
_________________________.
Date this _____________ day of ________________, 20_____
_________________________________________
_________________________________________
70
Computing a Cropland Cash Ag Decision Maker
Rental Rate File C2-20
C
ash rent lease agreements are popular because charging. Information File Farmland Cash Rental Rates,
the lease is simple, the rent is fixed, and the shows typical rental rates reported for high, medium,
owner is relieved of making operating and and low quality cropland in each county in Iowa.
marketing decisions. Likewise, the tenant has maximum This method assumes that what others are charging is
freedom to plan and develop the cropping and livestock fair and equitable. A landowner receiving less rent per
programs. The risk and returns from changing prices, acre than the neighbors feels that he/she is not receiving
yields and costs are all borne by the tenant. what is rightfully due. However, a landowner receiv-
Types of Cash Rent ing more than a neighbor may feel that he/she is being
A farm may be rented for a fixed amount per acre for unfair to the tenant.
all acres in the farm (e.g. 160 acres in a quarter sec- There are three potential pitfalls with this approach:
tion) regardless of the number or acres of cropland, • Charging what others are charging may not be ap-
pasture, buildings or waste. This is referred to as a propriate for a particular farm. Remember that most
whole-farm rental rate. Or, the farm may be rented for a other tenants and landowners are in the same posi-
fixed amount per cropland acre (i.e. 145 acres cropland tion you are. They are looking for someone to tell
in a 160 acre farm) with a different rental rate for any them what rental rate is fair and equitable. If you
pasture or buildings. use this method, compare your rate to many other
Normally whole farm rental rates are lower than crop- rates instead of just one.
land rental rates because the land that is not cropped is • Rumors about cash rental rates may be quite dif-
often of lower productivity or not used. Exceptions are ferent than the actual rates, especially in a rapidly
building sites and grain storage facilities. changing market.
Several methods for computing cropland rental rates are • Differences in the quality of land should be taken
outlined below. A separate rental rate should be used into account when comparing your rental rate to
for pasture and storage and livestock facilities. All of the those of others. Landlords who are unfamiliar with
rental items can be included in the same lease agree- farming often assume all land is of equal productiv-
ment, however. ity. So, when using this method, be sure to compare
your rate to rates for land of comparable quality,
Approaches for Determining a Rental based on actual yields or productivity indices.
Rate Average Yields
Determining a fair rate is not easy. Cash rents are likely
A cash rental rate can be based on a farm’s average
to be too low during periods of rising prices and high
yields (e.g. five-year or ten-year average). For example,
yields and too high during periods of declining prices
assume the average rental rates in your county are $1.02
and low yields. Rates often reflect the results of the past
per bushel for corn and $3.64 per bushel for soybeans,
few years more than the upcoming year.
based on the latest survey information. If your farm has
Estimating a cash rental rate for cropland can be based an average corn yield of 160 bu. per acre this results in
on: a rental rate of $163 ($1.02 x 160 bu. = $163) per acre.
• what others are charging/paying An average soybean yield of 46 bushels per acre results
• average yields in a rental rate of $167 ($3.64 x 46 bu. = $167) per acre.
• corn suitability ratings (CSR index) Information File Farmland Cash Rental Rates, shows
• share of gross crop value rental rates per bushel of corn and soybeans by county.
• return on investment Remember, use a long-term average yield (both good
• crop share equivalent and bad years), and don’t just pick out the good years.
• tenant’s residual.
Corn Suitability Ratings
What Others are Charging/Paying Corn Suitability Rating (CSR) is a farmland productiv-
The most common method of establishing a cash rent is ity index. CSR values range from 0 to 100, with higher
to set a rate similar to what other people in the area are numbers indicating higher land productivity. Each soil
FM-1801 Revised January 2008
71
Page 2
type in Iowa has a CSR index rating. By identifying the Surveys show that cash rents for good cropland in Iowa
soil types and acres of each soil type in a tract of land, in recent years have averaged about 5 to 6 percent of
a weighted average CSR rating can be computed for the current land values.
tract. CSR values for a particular tract of land can be Land value $2,500 $3,500
obtained from the county assessor’s office. Remember to Rate of return 5-6% 5-6%
include only the land suitable for row crop production in Rental rate $125-$150 $175-$210
the estimate.
Estimates of current land market values are available in
A cropland cash rental rate can be computed by multi- Information Files Farmland Value Survey - Iowa State
plying the average CSR by a rental rate per CSR point. University and Farmland Value Survey - Realtor’s Land
For example, assume a typical rental rate per CSR index Institute. However, this method is rather imprecise, es-
point of $1.86 for your county. A tract of land with a pecially during periods of rapidly changing land values.
CSR of 75 would have a rental rate of $140 ($1.86 × 75
CSR = $140) per acre. Information File Farmland Cash Crop Share Equivalent
Rental Rates, shows typical rental rates per CSR index Another way of calculating cash rental rates is by
point by county. comparing the rental rate to the return that would be
received from a 50-50 crop-share lease. With a crop-
Share of Gross Crop Value share lease, the owner’s return is automatically adjusted
Cash rental rates tend to follow the gross value of the by changes in yield, selling price, and input amounts
crops being produced. The table below shows average and prices. However, to compute a cash rental rate using
cash rents in Iowa as a percent of the gross value of corn this method, estimates of yields, selling prices, and input
and soybeans in recent years. The higher of the harvest costs must be made for the coming year, which is some-
cash market price or the USDA loan rate each year was times difficult to do.
used to compute the gross crop value. This includes
potential income from loan deficiency payments or mar- An example using this method is presented in Table
keting loans. Rents have generally averaged about 35 to 2. Use five-year or ten-year average yields and current
40 percent of gross crop value from corn and 45 to 50 prices for harvest delivery. If prices are below the USDA
percent of gross crop value from soybeans. These per- county loan rate, use the loan rate instead, to reflect
centages and estimated yields and prices for the coming potential loan deficiency payments. Next, include the
year can be used to estimate a fair cash rental rate. landowner’s half of the USDA direct payments for the
coming year. You may want to refer to Information File
Return on Investment Commodity Programs for Crops. Then subtract the
Another method is to multiply the estimated current landowner’s half of the seed, fertilizer, pesticides and
market value for cropland by an expected rate of return. other shared expenses.
Table 1. Average Iowa Cash Rent as a Percent of Gross Crop Value
Average cash rent Average gross crop value,$/acre Average cash rent as % of gross
paid per acre (Iowa average yield x price)* crop value
Year Iowa Corn Soybeans Corn Soybeans
1998 $ 119 $ 277 $ 253 43% 47%
1999 $ 117 $ 282 $ 252 42% 46%
2000 $ 120 $ 272 $ 229 44% 52%
2001 $ 122 $ 276 $ 231 44% 53%
2002 $ 124 $ 368 $ 256 34% 48%
2003 $ 128 $ 339 $ 228 38% 56%
2004 $ 131 $ 371 $ 266 35% 49%
2005 $ 135 $ 337 $ 299 40% 45%
2006 $ 137 $ 459 $ 300 30% 46%
2007 $ 150 $ 604 $ 493 25% 30%
Average $ 128 $ 358 $ 281 37% 47%
*Iowa average yield x Oct.-Dec. average cash price for Iowa (National Ag Statistics Service)
72
Page
Table 2. Crop Share Equivalent Finally, a charge for the tenant’s labor and management
Income Corn Soybeans is subtracted. The remaining amount is available for the
Yield (1/2) 80 bu. 25 bu. payment of cash rent.
Price $3.25 $7.00 Based on the example values in Table 3, $190 is available
USDA payments, per acre $25 $25 for rent payment from corn production and $157 from
Total income to owner $272 $187
soybean production. With a corn/soybean rotation, the
Expenses average amount available for rent payment is $173.50
Seed (1/2) $27 $16 per acre ($190 + $157) / 2.
Fertilizer (1/2) 41 24
Pesticides (1/2) 12 7 Table 3. Tenant’s Residual
Crop insurance (1/2) 5 4 Income Corn Soybeans
Drying and storage (1/2) 14 0 Yield 160 bu. 50 bu.
Miscellaneous (1/2) 4 4 Price $3.00 $7.00
Interest (1/2) 5 3 USDA payments, per acre $25 $25
Total expenses paid by Total income $505 $375
$108 $58
owner
Operating costs
Net return to owner $164 $129 Seed $54 $32
Fertilizer 82 49
In the example, the landowner will receive a rent of
Pesticides 24 15
$164 and $129 from corn and soybeans respectively. Crop insurance 9 7
With a corn/soybean rotation, the average return will be Drying and storage 29 0
$146.50 (164 + 129) / 2 per acre. Miscellaneous 9 9
To compute a rental rate for your situation, use the Fuel and repairs 31 21
worksheet on the following page or enter your figures Interest 10 6
Total $248 $155
into Decision Tool Cash Rental Rate Estimation.
Machinery ownership $42 26
Tenant’s Residual Labor 29 27
Another approach is to calculate how much income the Management (estimate at 5% 16 10
tenant has available for rent payments after subtracting of other costs)
all the tenant’s costs associated with producing the crop. Total costs $335 $218
As in Table 2, you first need to estimate yields, selling Residual to tenant $190 $157
prices, and government payments. Then subtract the Remember, no allowance has been made for risk due
operating expenses. Next, subtract the tenant’s cost of to variations in crop prices and yields. With a cash rent
machinery and equipment ownership. This includes lease, the tenant assumes all of the risk. So the tenant
depreciation, a return on investment, insurance, and should be compensated for assuming this risk. Do this
machinery housing. Some people contend that these by either using conservative price and yield estimates or
costs (fixed costs) are incurred by the tenant whether the adjusting the rental rate downward.
land is rented or not and need not be subtracted when
determining a rental rate. But in the long run, these To estimate a rental rate for your own situation, use the
costs are incurred on all acres farmed and must be paid. worksheet on the following page or Decision Tool Cash
Rental Rate Estimation.
. . . and justice for all
The U.S. Department of Agriculture (USDA) prohibits discrimination Issued in furtherance of Cooperative Extension work, Acts of May 8
in all its programs and activities on the basis of race, color, national and June 30, 1914, in cooperation with the U.S. Department of Agri-
origin, gender, religion, age, disability, political beliefs, sexual orienta- culture. Jack M. Payne, director, Cooperative Extension Service, Iowa
tion, and marital or family status. (Not all prohibited bases apply to State University of Science and Technology, Ames, Iowa.
all programs.) Many materials can be made available in alternative File: Economics 1-4
formats for ADA clients. To file a complaint of discrimination, write
USDA, Office of Civil Rights, Room 326-W, Whitten Building, 14th Prepared by William Edwards, (515) 294-6161,
and Independence Avenue, SW, Washington, DC 20250-9410 or call wedwards@iastate.edu, extension economist and
202-720-5964. Don Hofstrand, (641) 423-0844, dhof@iastate.edu
value-added agriculture specialist,
co-director, Ag Marketing Resource Center
73
Page
Crop Land Cash Rent Worksheet
Gross Income Corn – per acre Soybeans – per acre
Expected yield, bu. per acre _______ _______
Expected selling price, $ per bu. _______ _______
Revenue from sales (bu. x price) _______ _______
USDA direct payments _______ _______
Total gross income _______ _______
Production Costs
Seed _______ _______
Fertilizer _______ _______
Lime _______ _______
Pesticides _______ _______
Crop insurance _______ _______
Interest and miscellaneous _______ _______
Custom hire _______ _______
Fuel, repairs _______ _______
Machinery ownership _______ _______
Drying, storage, hauling _______ _______
Labor _______ _______
Total of all nonland costs _______ _______
A. Share of Gross Income
Corn: Gross income __________ x share ______% (30 to 40%) = $ _______/acre
Soybeans: Gross income __________ x share ______% (40 to 50%) = $ _______/acre
B. Tenant’s Residual
Corn: Gross income __________ minus nonland costs __________ = $_______/acre
Soybeans: Gross income __________ minus nonland costs __________ = $_______/acre
C. Expected Yield
Corn: Expected yield _______ bu./acre x $ _______ per bu. for rent = $ _______/acre
Soybeans: Expected yield _______ bu./acre x $ _______ per bu. for rent = $ _______/acre
D. Corn Suitability Rating Index
CSR index: Average CSR _______ x $ _______ per point for rent = $ _______/acre
E. Percent of Land Value
Current market value of land $ _________/acre x ______% return expected = $ _______/acre
74
File C2-23
July 2009
www.extension.iastate.edu/agdm
Computing a Pasture Rental Rate
I
s there a simple and uniform method of Forage value
figuring a rental rate for pasture and hay land? To compute a rental rate based on forage value,
Probably not, but guidelines are available. There estimate the expected pasture or hay production per
are several methods for computing pasture rental acre and multiply by either 25 percent of the price
rate; and several factors that influence the rental rate. of grass hay during the grazing season for pasture,
or 35 percent of the price of hay for an established
Pasture rental rates vary according to the quality of stand of hay. If the tenant supplied labor and ma-
stand, type of grass species, amount of timber, condi- chinery for establishing the hay crop and pays half of
tion of the fences, availability of water, and previous the seed and fertilizer costs, then a rental rate equal
fertility practices on the pasture. Hay land rental to 50 percent of the value of the hay crop would be
rates depend mostly on the stand quality and age. more appropriate. Use hay prices corresponding to
the type and quality of the stand. Some typical pas-
A pasture rental rate can be based on: ture production levels are shown in Table 1.
• current market rates
• a return on investment in pastureland Table 1. Forage production (tons per acre) and
• forage value animal unit months per acre for various types of
• rent per head per month grasses. *
• carrying capacity
• rent per pound of gain Tons/acre AUM/acre
Bluegrass, unimproved 1.0 – 1.5 3.0
Bluegrass, improved with
Current market rates legume or nitrogen 1.5 – 2.5 4.0
Pasture rent per acre can be established by charg- Birdsfoot trefoil and grass 3.0 – 4.0 5.0
ing a rental rate similar to what others are charging. Orchard or brome grass, alone 3.0 - 4.0 4.0
Average pasture rental rates by county and region of Orchard or brome grass with
the state are shown in Information File Cash Rental legume or nitrogen 4.0 – 5.0 6.5
Rates. These rates are based on a survey that is con- Warm season grasses 4.0 – 5.0 4.0
ducted every spring. Alfalfa, plus grass 4.0 – 6.0 6.0
Cornstalks 0.5 – 1.0 0.7
Return on investment * Rotational grazing can increase production about 25%.
Another method is to compute a rental rate based on
sale or market value of the pastureland. Pasture rent For example, assume a summer grass hay price of
may range from 2.5 to 3.5 percent of market value. $100 per ton and an unimproved bluegrass pasture
For example, pasture with a sale value of $2,000 per yield of from one to one and one-half tons per acre
acre will rent from $50 to $70 per acre ($2,000 x (Table 1). The rental rate per acre is from $25 ($100
2.5% to 3.5% = $50 to $70). per ton x 25 percent x 1 ton per acre = $25) to $38
($100 per ton x 25 percent x 1.5 tons per acre =
However, determining the market value of pas- $37.50).
tureland is difficult because pasture is seldom sold
separately from the farm. Information Files Farm- An alfalfa/grass summer hay price of $120 per ton
land Value Survey - Iowa State University and and an alfalfa/grass yield of from four to six tons per
Farmland Value Survey - Realtors Land Institute acre (Table 1) results in a rental rate per acre of from
provide information on current pastureland values. $168 ($120 per ton x 35 percent x 4 tons per acre =
Don Hofstrand , extension value added agriculture specialist
co-director Ag Marketing Resource Center
75 641-423-0844, dhof@iastate.edu
William Edwards, extension economist
515-294-6161, wedwards@iastate.edu
Page 2 File C2-23
$168 per acre) to $252 ($120 per ton x 35 percent x Typical rates per AUM by county and region of the
6 tons per acre = $252 per acre) for hay production. state are shown in Information File Cash Rental
Rates.
Rent per head per month
With this method, the livestock owner pays rent ac- Carrying capacity
cording to the number of animals grazed and length This method is based on the carrying capacity of
of time the pasture is used. This is measured by com- the pasture. The rental rate per AUM is multiplied
puting the animal unit months (AUMs). An AUM by the carrying capacity of the pasture in AUMs per
is the amount of forage required to support a 1,000 acre to estimate a pasture rental rate per acre for the
pound cow with a calf up to 4 months of age for one whole grazing season. The rental rate per AUM is
month. Table 2 can be used for figuring AUMs. For computed by either multiplying the hay price dur-
example, 10 cows (1,000 Ibs. each) and calves pas- ing the grazing season by the pasture quality fac-
tured for three months equals 30 AUMs (10 x 1.0 x tor (Table 3), or by using a typical rental rate from
3). Note that forage consumption normally parallels Information File Cash Rental Rates.
the weight of the animal.
For example, a $100 grass hay price and a tallgrass
Table 2. Animal unit months by type and weight pasture rating of .20 results in a rental rate per AUM
of animal. of $20 ($100 x .20). A brome grass pasture may
produce four AUMs per acre during the grazing sea-
Type of Animal Weight of Animal AUM
son (Table 1). Multiplying the rate per AUM by the
Cow & calf 1,000 Ibs. 1.00
Cow & calf 1,200 1.20 AUMs per acre results in a rent of $80 per acre ($20
Bull 1,500 1.50 per AUM x 4 AUMs).
Heifer 600-800 .70
Ewe & lambs per head .25 Rent per pound of gain
Horse 1,400 1.40 With this method, pasture rent is based on the added
weight the livestock gain while they are on pasture.
Rent is figured by multiplying a rental rate per AUM This approach is best suited for stocker and feeder
by the number of AUMs. A rental rate per AUM can cattle rather than beef cows. To determine the rent
be figured by using the current hay price and the payment, it is necessary for the cattle to be weighed
quality rating of the pasture. Four forage quality rat- or an average weight estimated before they are
ings are shown in Table 3. placed on pasture and after they are taken off pas-
ture. This may not be practical in some situations.
Table 3. Pasture quality ratings
Rating
Gain from pasture forage can be valued at about
Lush, green, high protein pasture = .22
Excellent tallgrass pasture = .20 two-thirds to three-fourths the feed costs of gain in a
Fair to good native shortgrass pasture = .15 feedlot. In a normal year the value of gain of live-
Poor short grasses or weedy pasture = .12 stock on pasture is from 50 to 60 cents per pound of
gain. Rent is figured by multiplying the value of the
For example, let’s assume the pasture is brome (tall- gain by the total amount of gain.
grass) pasture. Also, assume the average grass hay
price during the summer is $100 per ton. The rental For example, assume the average gain per animal is
rate per AUM is $20 ($100 x .20). If ten, 1,000 1.25 pounds per day. The amount of gain for a month
pound cows with calf by their side are pastured for is 37.5 pounds (1.25 Ibs. x 30 days). If the rental rate
three months, 30 AUMs of pasture are used during is 50 cents per pound of gain, the rental charge for a
the summer. The rent is $600 (30 AUMs x $20 per month is $18.75 per head (50 cents x 37.5 pounds).
AUM) for the summer.
. . . and justice for all Building, 14th and Independence Avenue, SW, Washington, DC 20250-9410 or call 202-720-
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and 5964.
activities on the basis of race, color, national origin, gender, religion, age, disability, political
beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all Issued in furtherance of Cooperative Extension work, Acts of May 8 and June 30, 1914, in
programs.) Many materials can be made available in alternative formats for ADA clients. To cooperation with the U.S. Department of Agriculture. Jack M. Payne, director, Cooperative
Extension Service, Iowa State University of Science and Technology, Ames, Iowa.
76
file a complaint of discrimination, write USDA, Office of Civil Rights, Room 326-W, Whitten
Flexible Farm Lease Ag Decision Maker
Agreements File C2-21
F
luctuating markets and uncertain yields make it dif- tenant and owner, in the same proportion as the gross
ficult to arrive at a fair cash rental rate in advance revenue. In this respect, it is similar to a crop share lease.
of each crop year. To address this problem, some
owners and tenants use flexible lease agreements in which Most of the flexible leases in Iowa specify that the rent
the rent is not determined until after the crop is harvested. will be equal to anywhere from 35 to 45 percent of the
The final rental rate is based on actual prices and/or yields gross revenue. The share received for very productive
attained each year. A recent survey showed that flexible land should be higher than for less productive land. The
leases accounted for nearly 12 percent of all cash leases table below shows the average cash rent paid for corn and
in Iowa. soybean land in Iowa during the past 10 years as a percent
of the estimated crop gross revenue each year, not includ-
Flexible leases have the following advantages: ing USDA direct and counter cyclical payments or crop
• The actual rent paid adjusts automatically as yields insurance proceeds.
or prices fluctuate. Base Rent plus Bonus
• Risks are shared between the owner and the tenant, Another type of flexible lease formula specifies a base
as are profit opportunities. or minimum rent, plus the owner receives a share of the
gross revenue in excess of a certain base value.
• Owners are paid in cash--they do not have to be
involved in decisions about crop inputs or grain
Example 1 - Corn
marketing.
• Cash rent will be equal to 35 percent of the gross crop
Share of Gross Revenue value.
The most common type of flexible lease calls for the • The actual yield of corn is 150 bushels per acre, and
owner to receive cash rent equal to a specified share of the the actual price is $3.53 per bushel.
gross value of the crop. The value of the crop is deter- • The gross income is equal to (150 x $3.53) = $529.50.
mined by multiplying the actual harvested yield by the • The cash rent is equal to (35% x $529.50), or $185.33
market price available, usually at harvest time. Under this per acre.
type of lease both price and yield risks are shared between
Table 1. Average Iowa Cash Rent as a Percent of Gross Revenue
Average Cash Average Gross Revenue, Average Cash Rent
Rent Paid/acre 1/ $/acre 2/ as % of Gross Revenue
Year Iowa Corn Soybeans Corn Soybeans
1999 $ 117 $ 282 $ 252 42% 46%
2000 $ 120 $ 272 $ 229 44% 52%
2001 $ 122 $ 276 $ 231 44% 53%
2002 $ 124 $ 368 $ 256 34% 48%
2003 $ 128 $ 339 $ 228 38% 56%
2004 $ 131 $ 371 $ 266 35% 49%
2005 $ 135 $ 337 $ 299 40% 45%
2006 $ 137 $ 459 $ 300 30% 46%
2007 $ 150 $ 604 $ 493 25% 30%
2008 $ 177 $ 602 $ 382 29% 46%
Average $ 134 $ 391 $ 294 36% 47%
1/
Cash Rental Rates for Iowa, AgDM File C2-10
2/
Iowa average yield x Oct.- Dec. Iowa average cash price or USDA loan for Iowa (National Ag Statistics Service)
FM 1724 Revised February 2009
77
Page 2 Flexible Farm Lease Agreements
The base rent may be the amount that was being paid Leases that base the rent on price only or yield only may
several years ago, before the recent increases in grain actually increase the tenant’s risk in some years. This is
prices (see Table 1). because prices may be high when yields are low, or prices
The base value for gross revenue can be the amount that may be low when yields are high. Thus, adjusting the
would be received under typical yield and price condi- rent based on only one factor does not always reflect the
tions corresponding to the base rent (see Table 1). It also actual profits received in that year. Adjusting the rent for
can be equal to the tenant’s cost of production per acre, changes in both price and yield ensures that the actual rent
including the base rent, if any. will be closely tied to the tenant’s income each year.
The bonus may vary from one-third to one-half of the Determining Yield
amount over the base revenue. Both parties must agree on It is important to agree ahead of time on the procedure
how to calculate gross revenue, and whether a gross rev- for determining the factors that will be used to calculate
enue below the base level will cause the actual rent to be the final rent. These factors should be based on informa-
less than the base rent value. If the base rent also is speci- tion that is available to both parties. Actual yields can be
fied as the minimum rent, it should probably be set lower determined by:
than a typical fixed cash rent for the same land; otherwise, •weight tickets, if all the crop is sold or put into com-
the landowner does not share in any of the downside risk. mercial storage
•combine yield monitors or weigh wagons
•storage bin capacity
Example 2 - Soybeans
When crops stored on the farm are ultimately sold, any
• Base rent is $140 per acre. variation from the estimated yield can be used to ad-
• Tenant’s cost of production is $260 per acre, excluding just the rent paid for that crop. Estimated yields should
land. be corrected to a standard moisture level, for example,
• Base gross revenue is $360 per acre. 15 percent moisture for corn.
• Bonus is 46% of the gross revenue in excess of $360
per acre. Using actual farm yields to calculate the rent may cause
• Actual yield is 52 bushels of soybeans per acre and the lease to be considered a “share” lease by the Farm
actual price is $8.50 per bushel. Service Agency (FSA), as explained later. Using the
• Gross Revenue is equal to (52 bu. x $8.50) = $442 per county average yield as estimated by USDA will avoid
acre. this problem. However, county average yields are not
• Revenue in excess of the base = $442 - $360 = $82 generally announce until March each year.
• Rent is equal to $140 plus 46% of $82, or $140 + $38
Determining Price
= $178.
The price used to calculate the final rent payment can be
• However, if the market price of soybeans is only $7.00
the cash price at a local elevator or processor on a speci-
per bushel, the gross revenue would be only $364, the
fied date, or an average of nearby prices on several dates.
bonus would be ($364 - $360) x 46% = $2, and the
Prices on dates near or before the time the final rent is
rent would be $142 per acre.
paid should be used even though the crop may actually be
sold later. If the landowner is providing storage facilities,
Sharing Risk later prices may be used. Forward contract prices avail-
Owners and tenants should carefully consider the type and able before harvest can be included, too.
degree of risk they want to assume. Taking on risk means An alternative to using a local price is to use a futures
greater losses when prices or yields are low, but can contract price minus a normal basis value for the location
result in larger profits in better years. Owners who wish of the farm. If the price chosen is lower than the USDA
to receive a fixed income from their farm investments county loan rate for that commodity, the loan rate can be
may have to accept a lower long-term rent than those who used instead. This would represent the tenant’s potential
are willing to share risk. Tenants with substantial finan- selling price including loan deficiency payments or gains
cial obligations should consider adopting other means of from USDA marketing loans.
reducing risk, as well, such as purchasing crop revenue
insurance.
78
Flexible Farm Lease Agreements Page 3
Example 3 - Determining Price Government Payments
The Farm Service Agency (FSA) no longer specifies that
Local elevator prices on: under a lease arrangement in which yield risk is shared
April 1 (October delivery) $4.06 between the tenant and the landowner, any direct pay-
June 1 (October delivery) 3.72 ments and counter cyclical payments for which the farm
October 1 (cash) 3.48 may qualify must be shared in the same proportion as the
November 1 (cash) 3.62 risk. All payments are paid to the tenant. In such cases,
December 1 (cash) 3.87 these payments can be included in the gross revenue
Average $3.75 estimates used to determine the amount of rent due, such
as in examples 1 and 2 in this publication.
Other options include using the posted county prices Tenants and landlords who agree on a flexible cash lease
calculated by FSA each day, or the monthly average cash should provide a copy of it to their county FSA office, and
prices reported by the National Agricultural Statistics request approval for the proposed sharing of the direct and
Service (NASS) Iowa branch. counter cyclical payments. Flexible leases in which the
rent is based on the actual market price and a fixed yield,
Other Issues or a yield such as the county average yield each year, do
Some tenants and landlords may want to avoid the pos-
not require a division of USDA payments.
sibility of a very high or very low rent in a given year by
setting a maximum and/or minimum rent. This keeps the Other Resources
actual rent paid each year within a desirable range. ISU Extension publication FM 1538 or Ag Decision Mak-
Many leases ask for a portion of the rent to be paid in er File C2-12 contains a standard farm lease form. ISU
advance, possibly by March 1. Under a flexible lease, the Extension publication FM 1801 or Ag Decision Maker
advance payment may be for a fixed amount while the File C2-20 contains information on how to determine a
final payment depends on actual prices and yields. fair cash rent.
The flexible lease formula to be followed should be tested An interactive spreadsheet to analyze flexible farm lease
by using several different price and yield possibilities so agreements is available on the Ag Decision Maker Web
as to illustrate the range of potential cash rents. Regard- site at: www.extension.iastate.edu/agdm/wholefarm/xls/
less of what type of agreement is adopted, it should be c2-21flexiblerentanalysis.xls .
described in writing (with an example) and made a part of
the written lease contract. The following page can be used
as a lease supplement to specify flexible lease terms.
. . . and justice for all
The U.S. Department of Agriculture (USDA) prohibits discrimination in William Edwards, extension economist
all its programs and activities on the basis of race, color, national origin,
gender, religion, age, disability, political beliefs, sexual orientation, and
(515) 294-6161, wedwards@iastate.edu
marital or family status. (Not all prohibited bases apply to all programs.) Ann Johanns, extension program specialist
Many materials can be made available in alternative formats for ADA (641) 732-5574, aholste@iastate.edu
clients. To file a complaint of discrimination, write USDA, Office of
Civil Rights, Room 326-W, Whitten Building, 14th and Independence
Avenue, SW, Washington, DC 20250-9410 or call 202-720-5964.
www.extension.iastate.edu/agdm
Issued in furtherance of Cooperative Extension work, Acts of May 8 and
June 30, 1914, in cooperation with the U.S. Department of Agriculture.
www.extension.iastate.edu/store
Jack M. Payne, director, Cooperative Extension Service, Iowa State
University of Science and Technology, Ames, Iowa.
File: Economics 1 - 1
79
Page 4 Flexible Farm Lease Agreements
Flexible Cash Rent Agreement
The amount of cash rent to be paid by the operator to the owner for the portion of the real estate designated as cropland
shall be determined as follows (fill in the blanks where needed):
Corn Soybeans
Area of cropland ___________ ___________ acres
Base rent per acre (if applicable) $ ___________ $ ___________ per acre
Base gross revenue (if applicable) $ ___________ $ ___________ per acre
Percent of gross revenue to share (in excess of base) ___________% ___________%
Minimum rent per acre (if applicable) $ ___________ $ ___________ per acre
Maximum rent per acre (if applicable) $ ___________ $ ___________ per acre
Yield
The actual yield used to calculate the rent shall be determined as follows: (check)
____ farm yield, determined by: ____ yield monitor ____ bin measurements ____ delivery receipt ____ other
____ county average yield as reported by NASS
____ other methods (describe): ________________________________________________________________________
Price
The actual price used to calculate the rent shall be determined as follows:
Source of price information to use _____________________________________________________________________
Dates of prices to use _______________________________________________________________________________
USDA Payments
The value of any payments received as the result of participation in programs of the United States Department of Agri-
culture for the crop year for which the variable cash rent applies shall be divided as follows:
a) Direct Payments ($ or %): Owner _______ Tenant _______
b) Counter cyclical payments:($ or %): Owner _______ Tenant _______
c) Loan deficiency payments (LDPs) or marketing loan gains accrue to the owner of the crop.
Payment Dates
The cash rent as determined by the above procedure shall be paid as follows:
Date Amount (fixed $ amount or flexible rent as calculated)
__________ ________________________________________
__________ ________________________________________
__________ ________________________________________
Examples (fill in numbers to show how the rent will be calculated)
Percent of gross income Base rent plus bonus
Corn Soybean Corn Soybean
Yield Yield
x Price $ $ x Price $ $
= Gross revenue = Gross revenue
x % shared - Base revenue
= Total rent per acre $ $ = Gross rev. shared
x % shared
= Bonus $ $
+ Base rent
= Total rent per acre $ $
80
File A3-13
February 2008
www.extension.iastate.edu/agdm
Custom Farming - A Share of the Crop
C
ustom farming is becoming popular. This the custom operator's income is affected by how
popularity has given rise to new ways of de- well he/she does the field operations. If field opera-
veloping custom agreements. Traditionally, tions are done properly and in a timely manner, crop
a custom farming agreement involves the landowner yields are higher, which increases the returns of both
making a fixed cash payment to the custom operator the landowner and custom operator.
in return for doing various field operations. This is
either contracted individually on each field operation Giving the operator a share of the crop in lieu of a
or in total for all growing and harvesting operations. fixed cash payment reduces the owner's cash invest-
Typical custom rates are provided in the Information ment in the growing crop. It also reduces the risk ex-
File Iowa Farm Custom Rate Survey. Information posure of the landowner. If crop yields and/or prices
File Custom Farming: An Alternative to Leasing are low, the amount going to the custom operator is
provides guidelines for developing a custom agree- reduced.
ment.
Computing a fair division
Custom farming disadvantages The challenge of this type of arrangement is comput-
There may be disadvantages to custom farming. ing an equitable division of the crop between land-
Timeliness, especially during planting and harvest- owner and operator. The procedure shown in Table
ing, is important and landowners often complain that 1 can be used for this purpose. The cost or value of
the custom operations are not done when they should each party’s contributions for growing, harvesting
be. Conversely, custom operators often complain and marketing the crop is listed. The crop is then
that the fixed payments they receive for their efforts divided in the same proportion as the value of each
are little more than wages, giving them little incen- party’s contributions. An example is used to illus-
tive to do a good job. trate the procedure.
Custom farming involves a high cash outlay by the First, list the value of all of the contributions made
landowner. Not only are the seed, fertilizer, and by the landowner, such as seed, fertilizer, pesticides
other expenses paid in cash, but all field operations and miscellaneous costs. A management fee is added
are also converted to fixed cash payments. The cash to cover the cost of selecting, ordering, and deliv-
outlay per acre, including land payments, can easily ering the production inputs. The fee is sometimes
reach $400 per acre. computed as 10 percent of the production inputs
(seed, fertilizer, etc.) A land charge for the year can
Also, custom farming tends to be high risk for the be based on local cash rental rates.
landowner. All costs are fixed but the returns (yield
and selling price) are extremely variable. The custom operator's contribution of machinery
and labor for growing and harvesting the crop can
Share of the crop be estimated by using custom rates for each indi-
Many of these disadvantages can be offset if an vidual operation or the whole crop from Information
arrangement is developed where the custom opera- File, Iowa Farm Custom Rates. A hauling charge
tor receives a share of the crop (including a share of (custom) may be included for delivering the grain to
the government payments) instead of a fixed cash either a nearby market or farm storage.
payment. With this arrangement, the custom opera-
tor has a vested interest in the crop. In other words,
Don Hofstrand
co-director Ag Marketing Resource Center
value-added agriculture specialist
81 641-423-0844
dhof@iastate.edu
Page 2 File A3-13
The custom operator's share of the crop is computed Corn drying
by dividing the value of his/her contribution by the If each party is responsible for drying his/her own
combined contribution of the landowner and opera- share of the corn crop, the cost of corn drying is not
tor. In the example, the custom operator's share of included in the arrangement. However, in some situ-
the costs of producing an acre of corn following soy- ations, the corn is dried on the farm. For example,
beans is $123. The total cost is $553. So, the custom assume that the corn is dried in the landowner's
operator's share of the corn crop is 22 percent ($123 dryer. Here the custom operator would pay the
/ $553). The landowner receives 78 percent ($430 / landowner (i.e. custom charge) for drying his/her
$553) of the crop. Also, the custom operator should share of the crop. As an alternative, the operator may
receive the same percentage (i.e. 22 percent) of the oversee the drying process in exchange for using the
government program payment. landowner's drying facilities and the dryer fuel and
electricity costs are divided in the same proportion
If the contributions are different from those out- as the crop is divided.
lined above, the distribution of the crop between
the custom operator and the landowner will change. Farm storage
Generally, the more productive the land, the lower Sometimes the grain is stored on the farm. In this
the operator's share will be. situation, the operator may pay the owner a fee for
storing his/her share of the grain. An additional ar-
Management rangement for hauling the grain to market may be
The landowner may do the selecting, ordering, needed. See Information File Iowa Farm Custom
and delivering of the production inputs. So a fee Rate Survey, or 2002 Building Rental and Con-
would be included in the landowner’s contribution. tracting Rates.
However, in many situations, the custom operator
is responsible for these tasks. So, part or all of the The division of the grain may occur in the field or
management charge may be listed under the custom- after drying. If all the grain goes to market, the
er operator rather than the landowner. The custom division of the grain can be done when the grain is
operator's costs would be refigured and he/she would weighed.
receive a larger share of the crop (as shown in Table
1).
There may be an advantage to having these manage-
ment tasks performed by the custom operator. For
example, the landowner may be eligible for volume
discounts if the input purchases are combined with
the operator's input purchases on his/her opera-
tion. Also, less coordination is needed between the
custom operator and the landowner. The custom
operator is assured that the production inputs will be
available when he/she is ready to do the field opera-
tions, and has the freedom to choose the combina-
tions that he/she prefers.
Crop insurance
The cost of crop insurance is not included in the
analysis. It is assumed that each party will insure his/
her share of the crop separately.
82
File A3-13 Page 3
Table 1. Determining the custom operator’s share of the crop (example).
Landowner Provides Management
Corn on Corn on
soybeans corn Soybeans
Landowner
Seed $70 $70 $39
Fertilizer 105 120 45
Herbicide 25 25 16
Insecticide 0 17 0
Miscellaneous 10 10 10
Management* 20 23 11
Land** 200 200 200
Landowner Total $430 $465 $321
Custom Operator Contributions
Custom Growing and
Harvesting $100 $100 $90
Custom Hauling 18 18 5
Miscellaneous 5 5 5
Management * 0 0 0
Custom Operator Total $123 $123 $100
Total Contributions $553 $588 $421
Percent of Crop for
Custom Operator *** 22% 21% 24%
Custom Operator Provides Management
$
Landowner Contributions 410 $442 $310
Custom Operator
Contributions $143 $146 $111
Total Contributions $553 $588 $421
Percent of Crop for
Custom Operator*** 26% 25% 26%
* computed as 10 percent of seed, fertilizer, herbicides, etc.
** cash rent equivalent
*** computed by dividing the Custom Operator Contribution by the Total Contribution
. . . and justice for all Issued in furtherance of Cooperative Extension work, Acts of May 8
The U.S. Department of Agriculture (USDA) prohibits discrimination and June 30, 1914, in cooperation with the U.S. Department of Agri-
in all its programs and activities on the basis of race, color, national culture. Jack M. Payne, director, Cooperative Extension Service, Iowa
origin, gender, religion, age, disability, political beliefs, sexual orienta- State University of Science and Technology, Ames, Iowa.
tion, and marital or family status. (Not all prohibited bases apply to
all programs.) Many materials can be made available in alternative
formats for ADA clients. To file a complaint of discrimination, write
USDA, Office of Civil Rights, Room 326-W, Whitten Building, 14th
and Independence Avenue, SW, Washington, DC 20250-9410 or call
202-720-5964.
83
Estimated Costs of Crop Ag Decision Maker
Production in Iowa - 2009 File A1-20
T
he estimated costs of corn, corn silage, Corn yields reflect rotation effects. Fertilizer rates
soybeans, alfalfa, and pasture maintenance have been adjusted to reflect current data on re-
in this report are based on data from sev- moval and application rates. Crop insurance costs
eral sources. They include the annual Iowa Farm reflect the mix of multiple peril, revenue and hail
Business Association record summaries, production insurance, as well as noninsured acres.
and costs data from the Departments of Econom-
Machinery costs reflect both new and used equip-
ics, Agricultural and Biosystems Engineering, and
ment. The machine operations assumed are based
Agronomy at Iowa State University and a survey of
on the 2000 Crop Production Practices Survey con-
selected agricultural cooperatives and other input
ducted by the Iowa Agricultural Statistics Service.
suppliers around the state.
Further information on this survey can be obtained
These costs estimates are representative of average by contacting the authors. The Estimated Machin-
costs for farms in Iowa. Very large or small farms ery Costs table can be used to budget other tillage
may have lower or higher fixed costs per acre. and harvesting systems.
Due to differences in soil potentials, quantity of Estimates represent typical costs and are only
inputs used and other factors, production costs intended to be guidelines. Actual costs will vary
will vary from farm to farm. Price shifts of inputs considerably and can be entered in the column for
can change production costs in both the short and “Your Estimates.” Electronic spreadsheets for de-
long run. The attached data reflect average cost of veloping crop production budgets are available on
purchased inputs and a return to land and labor the Ag Decision Maker web site, www.extension.
resources, but do not provide a margin for profit or iastate.edu/agdm.
a return to management. They reflect production
Budgets for alfalfa hay establishment with an oat
costs only, and do not include costs of storage.
companion crop and by direct seeding are included
Labor has been treated as a fixed cost, since most in this publication. Annual production costs for
labor on Iowa farms is supplied by the operator, established alfalfa or alfalfa-grass hay as well as a
family or permanent hired labor. However, when budget for maintaining grass pastures are included
deciding among alternative crops, labor should as well. Additional pasture establishment budgets
be considered a variable cost. The wage rate used are published in Iowa State University Extension
here is $11.00 per hour. The hours assumed per publication AG-96, Estimated Costs of Pasture and
crop are presented in the budgets. The hours per Hay Production.
crop acre includes not only the field work but also
Two low-till budgets, one for corn and one for
time for maintenance, travel, and other activities
soybeans, are included. The major differences be-
related to crop production. The land charge is
tween the low-till and conventional budgets are the
based on rent equivalent. Owned land may require
preharvest machinery, labor, herbicide, and seeding
a greater or lesser cash outlay.
costs. Beginning in 2005, primary soybean budgets
In the short run, cash income must be sufficient to are for herbicide tolerant varieties. Budgets for
pay cash costs, including seed, fertilizer, chemicals, non-herbicide tolerant soybeans are also included.
insurance, cash rent and hired labor, as well as ma- One budget is based on conventional tillage prac-
chinery fuel and repairs and interest on operating tices and one on drilled soybeans.
capital. In the long run, income should be suffi-
cient to pay all costs of production for resources to
be used in their most profitable alternative.
FM-1712 Revised December 2008
84
Page 2 Estimated Costs of Crop Production in Iowa - 2009
Corn following Corn
125 145 165
bu. per acre bu. per acre bu. per acre
Your
Fixed Variable Fixed Variable Fixed Variable Estimate
Preharvest Machinery 1/ $19.70 $17.80 $19.70 $17.80 $19.70 $17.80 $
Seed, Chemical, etc. Units Units Units
Seed @ $3.13 per 1000 k. 25,000 $78.30 30,000 $93.90 35,000 $109.60 $
Nitrogen @ $0.68 per lb. 155 105.40 155 105.40 155 105.40
Phosphate @ $0.90 per lb. 47 42.30 54 48.60 62 55.80
Potash @ $0.72 per lb. 38 27.36 44 31.68 50 36.00
Lime (yearly cost) 7.00 7.00 7.00
Herbicide 37.80 37.80 37.80
Insecticide 17.85 17.85 17.85
Crop Insurance 17.50 20.00 22.50
Miscellaneous 8.00 9.00 10.00
Interest on preharvest 14.97 16.21 17.49
variable costs
(8 months @ 6.25%)
Total $356.48 $387.44 $419.44 $
Harvest Machinery
Combine $15.30 $8.20 $15.30 $8.20 $15.30 $8.20 $
Grain Cart 4.40 2.30 4.40 2.30 4.40 2.30
Haul 2.50 3.75 2.90 4.35 3.30 4.95
Dry (LP Gas @ $1.90/gal.) 5.00 28.50 5.80 33.06 6.60 37.62
Handle 1.25 0.63 1.45 0.73 1.65 0.83
Total $28.45 $43.38 $29.85 $48.64 $31.25 $53.90 $
Labor
2.85 hours @ $11.00 $31.35 $31.35 $31.35 $
Land
Cash rent equivalent $178.00 $205.00 $232.00 $
Total fixed, variable
Per acre $257.50 $417.66 $285.90 $453.87 $314.30 $491.13 Yield:
Per bushel $2.06 $3.34 $1.97 $3.13 $1.90 $2.98 bu./acre
Total cost per acre $675.16 $739.77 $805.43 $
Total cost per bushel $5.40 $5.10 $4.88 $
Chisel plow, tandem disk, apply N, field cultivate, plant, cultivate, and spray. See the Estimated Machinery Costs table.
1/
85
Estimated Costs of Crop Production in Iowa - 2009 Page
Corn following Soybeans
140 160 180
bu. per acre bu. per acre bu. per acre
Your
Fixed Variable Fixed Variable Fixed Variable Estimate
Preharvest Machinery 1/ $16.20 $14.30 $16.20 $14.30 $16.20 $14.30 $
Seed, Chemical, etc. Units Units Units
Seed @ $3.13 per 1000 k. 25,000 $78.30 30,000 $93.90 35,000 $109.60 $
Nitrogen @ $0.68 per lb. 108 73.44 108 73.44 108 73.44
Phosphate @ $0.90 per lb. 53 47.70 60 54.00 68 61.20
Potash @ $0.72 per lb. 42 30.24 48 34.56 54 38.88
Lime (yearly cost) 7.00 7.00 7.00
Herbicide 37.80 37.80 37.80
Crop Insurance 17.50 20.00 22.50
Miscellaneous 8.00 9.00 10.00
Interest on preharvest 13.10 14.33 15.61
variable costs
(8 months @ 6.25%)
Total $313.08 $344.03 $376.03 $
Harvest Machinery
Combine $15.30 $8.20 $15.30 $8.20 $15.30 $8.20 $
Grain Cart 4.40 2.30 4.40 2.30 4.40 2.30
Haul 2.80 4.20 3.20 4.80 3.60 5.40
Dry (LP Gas @ $1.90/gal.) 5.60 31.92 6.40 36.48 7.20 41.04
Handle 1.40 0.70 1.60 0.80 1.80 0.90
Total $29.50 $47.32 $30.90 $52.58 $32.30 $57.84 $
Labor
2.6 hours @ $11.00 $28.60 $28.60 $28.60 $
Land
Cash rent equivalent $178.00 $205.00 $232.00 $
Total fixed, variable
Per acre $252.30 $374.70 $280.70 $410.91 $309.10 $448.17 Yield:
Per bushel $1.80 $2.68 $1.75 $2.57 $1.72 $2.49 bu./acre
Total cost per acre $627.00 $691.61 $757.27 $
Total cost per bushel $4.48 $4.32 $4.21 $
1/
Apply N, tandem disk, field cultivate, plant, cultivate, and spray. See the Estimated Machinery Costs table.
86
Page Estimated Costs of Crop Production in Iowa - 2009
Corn Silage following Corn
15 18 23
tons per acre tons per acre tons per acre
Your
Fixed Variable Fixed Variable Fixed Variable Estimate
Preharvest Machinery 1/ $19.70 $17.80 $19.70 $17.80 $19.70 $17.80 $
Seed, Chemical, etc. Units Units Units
Seed @ $3.13 per 1000 k. 23,000 $72.00 27,000 $84.50 31,000 $97.00 $
Nitrogen @ $0.68 per lb. 150 102.00 150 102.00 150 102.00
Phosphate @ $0.90 per lb. 53 47.70 64 57.60 80 72.00
Potash @ $0.72 per lb. 122 87.84 147 105.84 184 132.48
Lime (yearly cost) 8.00 8.00 8.00
Herbicide 37.80 37.80 37.80
Insecticide 17.85 17.85 17.85
Crop Insurance 17.50 20.00 22.50
Miscellaneous 8.00 9.00 10.00
Interest on preharvest 17.35 19.18 21.56
variable costs
(8 months @ 6.25%)
Total $416.04 $461.77 $521.19 $
Harvest Machinery
Silage Harvester $27.00 $10.00 $27.00 $13.00 $27.00 $16.00 $
Haul 56.00 50.00 68.00 61.00 85.00 76.00
Blower 14.00 11.00 17.00 13.00 21.00 16.00
Total $97.00 $71.00 $112.00 $87.00 $133.00 $108.00 $
Labor
5.0 hours @ $11.00 $55.00 $55.00 $55.00 $
Land
Cash rent equivalent $178.00 $205.00 $232.00 $
Total fixed, variable
Per acre $349.70 $504.84 $391.70 $566.57 $439.70 $646.99 Yield:
Per ton $22.91 $33.08 $21.32 $30.84 $19.14 $28.17 bu./acre
Total cost per acre $854.54 $958.27 $1,086.69 $
Total cost per ton $56.00 $52.16 $47.31 $
1/
Chisel plow, tandem disk, apply N, field cultivate, plant, cultivate, and spray. See the Estimated Machinery Costs table.
87
Estimated Costs of Crop Production in Iowa - 2009 Page
Herbicide Tolerant Soybeans following Corn
45 50 55
bu. per acre bu. per acre bu. per acre
Your
Fixed Variable Fixed Variable Fixed Variable Estimate
Preharvest Machinery 1/ $14.10 $12.20 $14.10 $12.20 $14.10 $12.20 $
Seed, Chemical, etc. Units Units Units
Seed @ $45.00 per 50 lb. 1.2 $54.00 1.2 $54.00 1.2 $54.00 $
Phosphate @ $0.90 per lb. 36 32.40 40 36.00 44 39.60
Potash @ $0.72 per lb. 68 48.96 75 54.00 83 59.76
Lime (yearly cost) 7.00 7.00 7.00
Herbicide 2/ 21.75 21.75 21.75
Crop Insurance 11.25 12.50 13.75
Miscellaneous 8.00 9.00 10.00
Interest on preharvest 8.15 8.60 9.09
variable costs
(8 months @ 6.25%)
Total $191.51 $202.85 $214.95 $
Harvest Machinery
Combine $13.00 $6.50 $13.00 $6.50 $13.00 $6.50 $
Grain Cart 4.40 2.30 4.40 2.30 4.40 2.30
Haul 0.90 1.35 1.00 1.50 1.10 1.65
Handle 0.45 0.20 0.55 0.25 0.65 0.30
Total $18.75 $10.35 $18.95 $10.55 $19.15 $10.75 $
Labor
2.45 hours @ $11.00 $26.95 $26.95 $26.95 $
Land
Cash rent equivalent $178.00 $205.00 $232.00 $
Total fixed, variable
Per acre $237.80 $214.06 $265.00 $225.60 $292.20 $237.90 Yield:
Per bushel $5.28 $4.76 $5.30 $4.51 $5.31 $4.33 bu./acre
Total cost per acre $451.86 $490.60 $530.10 $
Total cost per bushel $10.04 $9.81 $9.64 $
1/
Chisel plow, tandem disk, field cultivate, plant, and spray. See the Estimated Machinery Costs table.
2/
Estimates do not include any insecticide or fungicide costs.
88
Page Estimated Costs of Crop Production in Iowa - 2009
Non-Herbicide Tolerant Soybeans following Corn
Soybeans Following Corn Drilled Soybeans Following Corn
50 50
bu. per acre bu. per acre
Your Your
Fixed Variable Estimate Fixed Variable Estimate
Preharvest Machinery 1/ $15.50 $13.70 $ $13.00 $10.70 $
Seed, Chemical, etc. Units Units
Seed @ $35.00 per 50 lb. 1.2 $42.00 $ 1.4 $49.00 $
Phosphate @ $0.90 per lb. 40 36.00 40 36.00
Potash @ $0.72 per lb. 75 54.00 75 54.00
Lime (yearly cost) 7.00 7.00
Herbicide 29.93 30.63
Crop Insurance 12.50 12.50
Miscellaneous 9.00 9.00
Interest on preharvest 8.51 8.70
variable costs
(8 months @ 6.25%)
Total $198.94 $ $206.83 $
Harvest Machinery
Combine $13.00 $6.50 $ $13.00 $6.50 $
Grain Cart 4.40 2.30 4.40 2.30
Haul 1.00 1.50 1.00 1.50
Handle 0.55 0.25 0.55 0.25
Total $18.95 $10.55 $ $18.95 $10.55 $
Labor
2.25 hours @ $11.00 $24.75 $
1.75 hours @ $11.00 $19.25 $
Land
Cash rent equivalent $205.00 $ $205.00 $
Total fixed, variable
Per acre $264.20 $223.19 Yield: $256.20 $228.08 Yield:
Per bushel $5.28 $4.46 bu./acre $5.12 $4.56 bu./acre
Total cost per acre $487.39 $ $484.28 $
Total cost per bushel $9.75 $ $9.69 $
1/
Chisel plow, tandem disk, field cultivate, plant, cultivate, and spray.
Tandem disk, field cultivate, drill and spray for drilled soybeans. See the Estimated Machinery Costs table.
2/
Estimates do not include any insecticide or fungicide costs.
89
Estimated Costs of Crop Production in Iowa - 2009 Page
Low-till Corn and Soybeans
Herbicide Tolerant
Corn Following Soybeans Drilled Soybeans Following Corn
160 50
bu. per acre bu. per acre
Your Your
Fixed Variable Estimate Fixed Variable Estimate
Preharvest Machinery 1/ $11.90 $10.70 $ $10.90 $8.50 $
Seed, Chemical, etc. Units Units
Seed @ $3.13 per 1000 k. 26,000 $81.38 $
Seed @ $45.00 per 50 lb. 1.4 $63.00 $
Nitrogen @ $0.68 per lb. 108 73.44
Phosphate @ $0.90 per lb. 60 54.00 40 36.00
Potash @ $0.72 per lb. 48 34.56 75 54.00
Lime (yearly cost) 7.00 7.00
Herbicide 2/ 36.46 30.63
Crop Insurance 20.00 12.50
Miscellaneous 9.00 9.00
Interest on preharvest 14.35 9.19
variable costs
(8 months @ 6.25%)
Total $329.44 $ $221.32 $
Harvest Machinery
Combine $15.30 $8.20 $ $13.00 $6.50 $
Grain Cart 4.40 2.30 4.40 2.30
Haul 3.20 4.80 1.00 1.50
Dry (LP Gas @ $1.90/gal.) 6.40 36.48
Handle 1.70 0.75 0.55 0.25
Total $31.00 $52.53 $ $18.95 $10.55 $
Labor
2.3 hours @ $11.00 $25.30 $
1.75 hours @ $11.00 $19.25 $
Land
Cash rent equivalent $205.00 $ $205.00 $
Total fixed, variable
Per acre $273.20 $405.71 Yield: $254.10 $231.12 Yield:
Per bushel $1.71 $2.54 bu./acre $5.08 $4.62 bu./acre
Total cost per acre $678.92 $ $485.22 $
Total cost per bushel $4.24 $ $9.70 $
1/
Apply N, plant, cultivate, and spray for corn. Tandem disk, drill and spray for soybeans. See the Estimated Machinery Costs table.
2/
Estimates do not include any insecticide or fungicide costs.
90
Page Estimated Costs of Crop Production in Iowa - 2009
Oats and Hay Production - Seeding Year Costs
Alfalfa-Grass Seeded Alfalfa Seeded
with Oat Companion Crop 1/ with Herbicide 2/
Establishment Costs Your
Fixed Variable Fixed Variable Estimate
Preharvest Machinery
Spray herbicide $1.20 $1.00 $
Tandem disk (2 times) $6.60 $4.60 6.60 4.60
Spread fertilizer 1.60 1.20 1.60 1.20
Harrow 1.60 1.00 1.60 1.00
Seed (drill) 4.80 4.00 4.80 4.00
Total Preharvest Machinery $14.60 $10.80 $15.80 $11.80 $
Seed 3/
Oats 2 bu. $15.10 $
Alfalfa 8 lb. 33.60 15 lb. 63.00
Bromegrass 6 lb. 9.00
Orchardgrass 3 lb. 11.25
Total Seed Cost $68.95 $63.00 $
Herbicide 13.10
Lime (total cost for hay lifetime) 29.00 29.00
Labor @ $11.00 1 hr. $11.00 1 hr. $11.00 $
Total Establishment Costs $25.60 $108.75 $26.80 $116.90 $
Annual Costs Fixed Variable Fixed Variable
One-Third of Est. Costs $8.53 $36.25 $8.93 $38.97 $
(for establishment year)
Fertilizer
Nitrogen 60 lb. $40.80 $
Phosphorus 45 lb. 40.50 35 lb. $31.50
Potash 130 lb. 93.60 125 lb. 90.00
Total Fertilizer $174.90 $121.50 $
Labor @ $11.00 4 hr. $44.00 3 hr. $33.00 $
Land Cash rent equivalent $100.00 $100.00 $
Harvest Machinery
Oats: combine $12.70 $7.20 $
rake, bale, and haul straw $8.90 $6.20 $
Alfalfa: mower-conditioner, rake,
bale, and haul hay $14.10 $10.10 $29.10 $21.18 $
Total Harvest Cost $35.70 $23.50 $29.10 $21.18 $
Total fixed and variable costs $188.23 $239.65 $171.03 $181.64 $
Total cost per acre $427.88 $352.68 $
1/
Assumes 80 bushels oat yield, one ton straw yield and one ton per acre alfalfa yield from one cutting.
2/
Assumes two and a half tons per acre from two alfalfa cuttings with a herbicide-assisted seeding.
3/
Omit oats from August seedings. Higher priced seed varieties or different seed mixtures could vary these costs by 1.2 to 2.0 times.
91
Estimated Costs of Crop Production in Iowa - 2009 Page 9
Annual Production Costs for Established Alfalfa or Alfalfa-
Grass Hay
Hay Production Level
4 tons per acre 1/ 6 tons per acre
Your
Fixed Variable Fixed Variable Estimate
One-third of establishment costs
Machinery, seed, lime, labor,
and herbicide 2/ $8.53 $36.25 $8.93 $38.97 $
Annual fertilizer 3/
0-13-50 lbs/ton removed
plus spreading $1.60 $196.00 $3.20 $294.60 $
Harvesting Costs: Large Round Bales 4/
Mower-conditioner, rake, baling,
and hauling $43.90 $32.10 $59.20 $43.70 $
Labor Costs: 1.33 hr./cutting
@ $11.00 per hour $44.00 $58.67 $
Land
Cash rent equivalent $100.00 $125.00 $
Total fixed and variable cost using
large round bales $198.03 $264.35 $255.00 $377.27 $
Fixed and variable cost per ton $49.51 $66.09 $42.50 $62.88 $
Total cost per acre $462.38 $632.27 $
Total cost per ton $115.60 $105.38 $
Harvesting Costs: Small Square Bales 4/
Mower-conditioner, rake, baling,
and hauling $40.10 $30.10 $54.20 $41.20 $
Labor Costs: 2 hr./cutting $66.00 $88.00 $
@ $11.00 per hour
Land
Cash rent equivalent $100.00 $125.00 $
Total fixed and variable cost using
small square bales $216.23 $262.35 $279.33 $374.77 $
Fixed and variable cost per ton $54.06 $65.59 $46.56 $62.46 $
Total cost per acre $478.58 $654.10 $
Total cost per ton $119.65 $109.02 $
1/
For harvest as silage use machine cost estimates from the Estimated Machinery Costs table.
2/
Assumes alfalfa-grass seeded with oat companion crop. If alfalfa seeded with preplant herbicide then use other costs (see previous page).
3/
For 6-ton yield goal, a split application of fertilizer is assumed.
4/
Harvest cost estimates assume 3 cuttings for 4 tons and 4 cuttings for 6 tons; stacker cost per acre.
92
Page 10 Estimated Costs of Crop Production in Iowa - 2009
Maintaining Grass Pastures - Annual Cost per Acre
Improved
Improved Grass 2/ Grass-Legume 3/
Your
Fixed Variable Fixed Variable Estimate
Machinery Costs
Spreading fertilizer $1.60 $1.20 $1.60 $1.20 $
Spraying herbicide 1.20 1.00
Clipping weeds 2.50 1.90 2.50 1.90
Total Machinery Cost $5.30 $4.10 $4.10 $3.10 $
Fertilizer and Herbicide 1/
Nitrogen @ $0.68 per lb. 80 lb. $54.40 $
Phosphate @ $0.90 per lb. 30 lb. 27.00 30 lb. $27.00
Potash @ $0.72 per lb. 40 lb. 28.80
Herbicide 11.67
Total Fertilizer and Herbicide $93.07 $55.80 $
Labor
Growing practices .5 hr. @ $11.00 $5.50 $5.50 $
Fence maintenance 1 hr. @ $11.00 11.00 11.00
Total Labor $16.50 $16.50 $
Land
Cash rent equivalent $55.00 $65.00 $
Total cost $76.80 $97.17 $85.60 $58.90 $
Total cost per acre $173.97 $144.50 $
1/
These are average rates and may vary with soil test and the level of management on a particular field. Different herbicide alternatives
could vary this cost.
2/
Improved grass pastures assume a dominance of cool season grasses such as smooth bromegrass, orchardgrass, tall fescue, or reed
canarygrass.
3/
Improved grass-legume pasture assumed one third of the forage is made up of red clover, birdsfoot trefoil, or alfalfa.
93
Estimated Costs of Crop Production in Iowa - 2009 Page 11
Estimated Machinery Costs
The following cost estimates are for on-farm use, excluding labor. Depreciation is based on current replacement cost,
interest is based on average market rates. Fixed costs will be greater for newer machinery. If annual machine use is
greater than that assumed, fixed costs per acre will be lower, and vice versa. Hauling costs are based on a round trip of
one mile. Remember these are estimates and they should not take the place of accurate record-keeping. Diesel fuel is
estimated to cost $2.50 per gallon, delivered to the farm in bulk.
Fixed Cost per Acre Variable Cost
Hours of Use (depreciation, interest, per Acre
Operation Assumed per Year insurance, housing) (fuel, oil, repairs)
Subsoiling (V-ripper) 120 $6.00 $7.10
Moldboard plow 120 8.00 8.20
Chisel plow 120 3.50 3.50
Chop stalks 120 3.90 3.70
Tandem disk 120 3.30 2.30
Offset disk 120 3.80 3.00
Peg tooth harrow 60 1.60 1.00
Sprayer/disk 120 3.60 2.70
Field cultivator 120 2.10 2.20
Disk/Field cultivator 120 2.40 2.40
Bulk fertilizer spreader 60 1.60 1.20
NH3 applicator 120 4.20 4.10
Chisel plow, NH3 applic. 120 4.50 4.90
Grain drill 100 4.80 4.00
Broadcast seeder 100 1.70 1.00
Planter 100 4.00 3.20
No-till planter 100 5.10 4.10
No-till drill 100 6.40 5.20
Rotary hoe 60 1.30 0.90
Cultivator 120 1.40 1.50
Sprayer 150 1.20 1.00
Combine corn 175 15.30 8.20
Combine beans 100 13.00 6.50
Combine small grain 140 11.10 4.80
Haul grain (on farm) 600 0.02 /bu. 0.03 /bu.
Grain Cart 200 4.40 2.30
Silage harvester 200 27.00 12.60
Haul silage 140 3.70 /ton 3.30 /ton
Rotary mower 120 2.50 1.90
Mower-conditioner 120 3.80 2.90
Rake 120 1.90 1.40
Small square baler 120 6.20 /cutting 3.60 /cutting
Round baler 120 7.60 4.60
Stacker 120 7.80 4.70
Large square baler 120 7.40 5.00
Windrower 200 2.50 2.00
Forage chopper 200 12.90 9.50
Haul small square bales 120 1.10 /ton 1.60 /ton
Haul large round bales 120 1.00 1.35
Forage blower 100 0.90 0.70
94
Page 12 Estimated Costs of Crop Production in Iowa - 2009
Estimated Crop Production Costs in Iowa, 2003-2009
20031/ 20041/ 20052/ 20063/ 20073/ 20083/ 20093/
Corn following Corn
Machinery $80.99 $86.78 $94.55 $100.07 $102.94 $110.88 $115.99
Seed, Chemicals, etc. 146.19 159.57 184.77 201.62 222.22 271.97 387.44
Labor 25.65 27.08 27.08 29.93 31.35 31.35 31.35
Land 135.00 140.00 140.00 145.00 155.00 190.00 205.00
Total Cost Per Acre 387.83 413.43 446.39 476.61 511.51 604.20 739.77
Assumed Yield 135 bu 135 bu 135 bu 140 bu 145 bu 145 bu 145 bu
Total Cost Per Bushel $2.87 $3.06 $3.31 $3.40 $3.53 $4.17 $5.10
Corn following Soybeans
Machinery $79.55 $85.68 $93.37 $97.39 $100.12 $107.88 $113.98
Seed, Chemicals, etc. 125.10 135.74 156.03 169.26 189.33 230.35 344.03
Labor 23.40 24.70 24.70 27.30 28.60 28.60 28.60
Land 135.00 140.00 140.00 145.00 155.00 190.00 205.00
Total Cost Per Acre 363.04 386.12 414.10 438.95 473.05 556.83 691.61
Assumed Yield 150 bu 150 bu 150 bu 155 bu 160 bu 160 bu 160 bu
Total Cost Per Bushel $2.42 $2.57 $2.76 $2.83 $2.96 $3.48 $4.32
Soybeans following Corn 2/
Machinery $43.38 $41.51 $40.53 $45.90 $46.76 $48.50 $55.80
Seed, Chemicals, etc. 84.47 90.76 96.53 106.79 107.58 126.06 202.85
Labor 22.05 23.28 23.28 25.73 26.95 26.95 26.95
Land 135.00 140.00 140.00 145.00 155.00 190.00 205.00
Total Cost Per Acre 284.90 295.54 300.34 323.41 336.29 391.51 490.60
Assumed Yield 45 bu 45 bu 45 bu 45 bu 50 bu 50 bu 50 bu
Total Cost Per Bushel $6.33 $6.57 $6.67 $7.19 $6.73 $7.83 $9.81
Alfalfa Hay, annual production, 6 ton per acre, large round bales
One-Third of Est. Costs $32.84 $33.84 $34.45 $36.83 $37.27 $46.23 $38.97
Annual Fertilizer 60.25 71.62 84.74 103.36 103.46 126.00 294.60
Harvest Machinery 103.12 96.24 108.30 107.10 90.40 96.60 102.90
Labor 48.00 50.67 50.67 56.00 58.67 58.67 58.67
Land 85.00 88.00 95.00 95.00 100.00 125.00 125.00
Total Cost Per Acre 329.21 340.36 373.16 398.29 389.79 452.50 632.27
Assumed Yield 6 ton 6 ton 6 ton 6 ton 6 ton 6 ton 6 ton
Total Cost Per Ton $54.87 $56.73 $62.19 $66.38 $64.97 $75.42 $105.38
1/
2003-09 land rents, corn yields, and machinery costs were adjusted to reflect recent averages.
2/
Beginning in 2005, primary soybean estimates are for herbicide tolerant varieties.
3/
Corn drying and fertilizer practices were adjusted in 2006-2009 to reflect recent practices.
. . . and justice for all Prepared by Michael Duffy, extension economist
The U.S. Department of Agriculture (USDA) prohibits discrimination in
all its programs and activities on the basis of race, color, national origin, (515) 294-6160, mduffy@iastate.edu
gender, religion, age, disability, political beliefs, sexual orientation, and Darnell Smith, extension associate
marital or family status. (Not all prohibited bases apply to all programs.)
Many materials can be made available in alternative formats for ADA
(515) 294-8122, darnell@iastate.edu
clients. To file a complaint of discrimination, write USDA, Office of Civil
Rights, Room 326-W, Whitten Building, 14th and Independence Avenue,
SW, Washington, DC 20250-9410 or call 202-720-5964.
Issued in furtherance of Cooperative Extension work, Acts of May 8 and
June 30, 1914, in cooperation with the U.S. Department of Agriculture.
Jack M. Payne, director, Cooperative Extension Service, Iowa State Univer-
sity of Science and Technology, Ames, Iowa. www.extension.iastate.edu/agdm
File: Economics 1-8 www.extension.iastate.edu/store
95
96
On the Iowa State University campus, contact . . . For farm and agribusiness
Michael Duffy Chad Hart management strategies
ISU Extension economist - ISU economist -
farm management grain marketing and outlook and information . . .
478E Heady Hall 468E Heady Hall
Iowa State University Iowa State University
Ames, IA 50011-1070 Ames, IA 50011-1070
Phone: (515) 294-6160 Phone: (515) 294-9911
Fax: (515) 294-3838 Fax: (515) 294-1700
E-mail: mduffy@iastate.edu E-mail: chart@iastate.edu
William Edwards Robert Jolly
ISU Extension economist - ISU economist -
farm management financial management
478C Heady Hall 478D Heady Hall
Iowa State University Iowa State University
Ames, IA 50011-1070 Ames, IA 50011-1070
Phone: (515) 294-6161 Phone: (515) 294-6267
Fax: (515) 294-3838 Fax: (515) 294-3838
E-mail: wedwards@iastate.edu E-mail: rjolly@iastate.edu
Darnell Smith Shane Ellis
ISU Extension associate - ISU Extension program specialist
farm management 475 Heady Hall
473 Heady Hall Iowa State University
Iowa State University Ames, IA 50011-1070
Ames, IA 50011-1070 Phone: (515) 294-8030
97
Phone: (515) 294-8122 Fax: (515) 294-1700
Fax: (515) 294-3838 E-mail: shanee@iastate.edu
E-mail: darnell@iastate.edu
Roger Ginder Ann Johanns
ISU Extension economist - ISU Extension program specialist
agribusiness, cooperatives 315 Main Street
478B Heady Hall Osage, IA 50461
Iowa State University Phone: (641) 732-5574
Ames, IA 50011-1070 Fax: (641) 732-5574
Phone: (515) 294-6260 E-mail: aholste@iastate.edu contact your ISU Extension
Fax: (515) 294-3838
E-mail: ginder@iastate.edu farm and agribusiness
John Lawrence IMPORTANT WEB SITES
ISU Extension economist - ISU Extension Ag Decision Maker
management specialists
livestock marketing www.extension.iastate.edu/agdm
468F Heady Hall
Iowa State University ISU Farm Economics Current Issues
Ames, IA 50011-1070 www.extension.iastate.edu/feci
Phone: (515) 294-6290 ISU Agricultural Management E-School
Fax: (515) 294-1700 www.extension.iastate.edu/ames
E-mail: jdlaw@iastate.edu
ISU Extension Publications
www.extension.iastate.edu/store
ISU Extension Farm Financial Planning Program
www.extension.iastate.edu/farmanalysis FM 1848 Revised November 2008
Bringing farm management and marketing information to you. . .
. . . Iowa State University Extension field specialists
Each Iowa State University Extension farm and agribusiness management field specialist has an office at the address
below but serves each county in the area. In addition, specialists serve the entire state in their areas of specialization.
LYON OSCEOLA DICKINSON EMMET KOSSUTH WINNEBAGO WORTH MITCHELL HOWARD WINNESHIEK
1 ALLAMAKEE
SIOUX O'BRIEN CLAY PALO ALTO HANCOCK CERRO GORDO
NORTHWEST FLOYD CHICKASAW SOUTHWEST
10 5 FAYETTE CLAYTON
1. Ron Hook NORTHWEST NORTHEAST 7. Tim Eggers
5463 130th Street PLYMOUTH CHEROKEE BUENA VISTA POCAHONTAS HUMBOLDT WRIGHT FRANKLIN BUTLER BREMER 311 E. Washington St.
Sibley, IA 51249-1607 2 6 Clarinda, IA 51632-1723
Phone: (712) 754-3648 WEBSTER BLACK HAWK BUCHANAN DELAWARE DUBUQUE
Phone: (712) 542-5171
WOODBURY IDA SAC CALHOUN HAMILTON HARDIN GRUNDY
Fax: (712) 754-3649 Fax: (712) 542-5936
E-mail: rhook@iastate.edu 3 E-mail: teggers@iastate.edu
TAMA BENTON LINN JONES JACKSON
Dairy, marketing, insurance MONONA CRAWFORD CARROLL GREENE BOONE STORY MARSHALL
Leasing, strategic planning,
and risk management marketing
CLINTON
CENTRAL CEDAR
HARRISON SHELBY AUDUBON GUTHRIE DALLAS POLK JASPER POWESHIEK IOWA JOHNSON
SCOTT
2. Tom Olsen 4 SOUTHEAST
MUSCATINE
824 Flindt Dr., P.O. Box 820 POTTAWATTAMIE CASS ADAIR MADISON WARREN MARION MAHASKA KEOKUK WASHINGTON 8. Jim Jensen
Storm Lake, IA 50588-3208 9 127 N. Main St
LOUISA
Phone: (712) 732-5056 SOUTHWEST SOUTHEAST Mt. Pleasant, IA 52641
Fax: (712) 732-5006 MILLS MONTGOMERY ADAMS UNION CLARKE LUCAS MONROE WAPELLO JEFFERSON HENRY Phone: (319) 385-8126
E-mail: tolsen@iastate.edu DES MOINES
8 Fax: (319) 385-2617
Leases, machinery, land valuation, FREMONT PAGE TAYLOR RINGGOLD DECATUR WAYNE APPANOOSE DAVIS VAN BUREN
98
LEE
E-mail: jensenjh@iastate.edu
crop and livestock environmental 7 Leasing, land valuation,
management value-added agriculture,
quality systems
CENTRAL NORTHEAST
3. Kelvin Leibold 5. Robert Tigner 9. J. Bob Wells
524 Lawler St. 104 E. Main St. 212 North I Street
Iowa Falls, IA 50126-8000 New Hampton, IA 50659-1452 Oskaloosa, IA 52577
Phone: (641) 648-4850 Phone: (641) 394-2174 Phone: (641) 673-5841
Fax: (641) 648-4862 Fax: (641) 394-5415 Fax: (641) 673-0559
E-mail: kleibold@iastate.edu E-mail: rtigner@iastate.edu E-mail: wellsjb@iastate.edu
Global ag, estate planning, machin- Dairy, human resources Crop and livestock economics,
ery, leases, beg. farmer programs, risk management, marketing,
crop and livestock economics beg. farmer programs
STATEWIDE
4. Steve Johnson 6. Craig Chase 10. Don Hofstrand
1625 Adventureland Dr. Ste. A 720 7th Ave SW 2023 South Federal Ave.
Altoona, IA 50009 Tripoli, IA 50676 Mason City, IA 50401-6726
Phone: (515) 957-5760 Phone: (319) 882-4275 Phone: (641) 423-0844
Fax: (515) 967-6164 Fax: (319) 882-4292 Fax: (641) 423-2642
E-mail: sdjohns@iastate.edu E-mail: cchase@iastate.edu E-mail: dhof@iastate.edu
Grain marketing, crop Business planning, value-added Value-added agriculture,
insurance, storage, contracting, agriculture, sustainable strategic and business planning
risk management and alternative agriculture
. . . and justice for all. The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.)
Many materials can be made available in alternative formats for ADA clients. To file a complaint of discrimination, write USDA, Office of Civil Rights, Room 326-W, Whitten Bldg., 14th and Independence Avenue, SW, Washington, DC 20250-9410 or call 202-720-5964. Issued in furtherance of Cooperative
Extension work, Acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Agriculture. Jack M. Payne, director, Cooperative Extension Service, Iowa State University of Science and Technology, Ames, Iowa. File: Economics 1-5
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