Land prices and rents are among the largest expenses a farmer has to bear each year. Every summer, the Center of Agricultural Profitability (CAP) at the University of Nebraska-Lincoln publishes the Nebraska Farm Real Estate Market Survey. If you want to take a look for yourself, you can find a PDF version at cap.unl.edu/land or contact your local field office. Here are the key points:
Statewide, the average value of farmland in Nebraska rose 5%. The next highest percentage change was in the Northeast, with a 6% increase, and the East was close behind at 4%. Competition for farmland and improved weather conditions were cited as the main reasons for higher market values of land statewide, despite pressures from inflation and borrowing costs.
Due to the increase in land values, rents for irrigated farmland in the Northeast increased 1% to an average of $370 per acre; rents for dryland increased 2% to an average of $270 per acre. Just to remind you, these are averages for a large area of the state (about one-eighth), so there is plenty of room for local variation.
In the Eastern Region, rents for irrigated cropland increased 3% to an average of $355 per acre, while rents for dryland decreased 2% to an average of $240 per acre.
Unlike farmland leases, which begin annually and often on March 1, pastureland leases are typically for a five-month grazing season. Since the lease is only valid for that period, it ends at the end of the grazing season.
Written grazing leases are strongly recommended over handshakes and verbal leases. Setting fair prices is important in all leases, although this can be challenging at times. Variables such as grassland quality, pasture location, fence maintenance, water management responsibility and individual relationships all affect individual grazing lease prices.
Finally, grazing leases can be priced per acre or per pair. Per acre leases are more similar to farmland leases, but I recommend always including a set stocking rate in the lease if you choose to go that route. Leases without an agreed stocking rate are rare, but they put the landowner at risk of overgrazing by the tenant, as there is technically no set limit on the number of animals that can be kept. With per animal unit or per pair leases, this stocking rate must be discussed as part of the lease negotiations.
According to this year’s survey, the average monthly rent paid to graze a cow-calf pair this season in the Northeast region averaged $70.10 per month per pair. Per-acre rents averaged $75 per acre, up 5% from last year. In the Eastern region, grazing rent prices averaged $66.45 per month per pair, while per-acre rents increased 7% to an average of $65 per acre. If you extrapolate these prices over a five-month grazing period, it costs an average of $332.25 to $350.50 to graze a cow-calf pair during the summer. Again, keep in mind that these are just averages.
Pastures are an important resource for farmers, ranchers and our livestock industry in Nebraska. Pasture leasing is a critical factor in the financial well-being of landlords and tenants. Knowing what others are paying for leases can help you negotiate a fair price for yourself.
Ben Beckman is a beef system extension educator serving Antelope, Cedar, Knox, Madison and Pierce counties. He is based at the Cedar County Extension Office in Hartington and can be reached at 402-254-6821 or [email protected].
