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2019 CASH RENT OUTLOOK:

EXPECTATIONS & RESOURCES

Melissa O’Rourke B.S., M.A., J.D.

Attorney –and– Farm & Agribusiness

Management Specialist www.extension.iastate.edu/agdm

morourke@iastate.edu 563-382-2949

@MelissaISU

Wright

Worth

Woodbury

Winnebago

Webster

WashingtonWarren

Union

TamaStory

Sioux

ShelbyScott

Sac

Ringgold

PoweshiekPolk

PocahontasPlymouth

Palo Alto

Osceola

O'Brien

Mus-catine

Monona

Mitchell

Marshall

Marion MahaskaMadison

Lyon

Lucas

Louisa

Linn

Lee

Kossuth

Keokuk

Jones

Johnson

Jefferson

Jasper

Jackson

Iowa

Ida

Humboldt

Howard

Henry

Harrison

Hardin

Hancock

Hamilton

Guthrie

Grundy

Greene

Franklin

Floyd

EmmetDickinson

Des Moines

Decatur

Dallas

Crawford

Clinton

Clay

Clarke

Chickasaw

Cherokee

Cerro Gordo

Cedar

Carroll

Calhoun

ButlerBuena Vista

Bremer

Boone

Black Hawk

Benton

Audubon

Wayne

Wapello

Van Buren

Monroe

DavisAppanoose

Winneshiek

Fayette

DubuqueDelaware

Clayton

Buchanan

Allamakee

Taylor

Pottawattamie

Page

Mont-gomeryMills

Fremont

Cass

Adams

Adair

SE

CB

MO

Lucas

TE

SJ RD

GW

Farm Management Field Specialists

Review the

discussion

and

reference

other

articles on

HOW to set

cash rental

rates.

Survey

Responses:• 1,596 responses • 47% farm operators• 29% landowners• 9% ag lenders• 13% professional farm managers & realtors• 2% other professions• Respondents indicated being familiar with

over 1.8 million cash rented acres across Iowa.

• On average, that’s about 1,128 acres per respondent.

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Does the cash rent survey tell

you what your rent should be?► It’s a tool that can be a starting or reference point for determining an appropriate cash rental rate for a particular farm.

► It is not intended to be the sole source for determining cash rents.

Multiple

spreadsheets to

try different

scenarios.

Interactive

spreadsheet

to compare

estimated

returns by

Farm Lease

Arrangement.

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Newsletters and

analysis by ISU

Agricultural

Economists like

Dr. Alejandro

Plastina . . . .

. . . and Dr.

Wendong

Zhang – who

directs the ISU

Farmland Value

survey that will

be out next

month!

Worksheet

included

for two of

the basic

methods

Go to Ag

DecisionMaker

to find the

Excel

spreadsheet

that allows you

to plug in

different %s,

yields, prices

Average Iowa Cash Rent as Percent of

Gross Crop Value and Gross Crop Revenue

– data on Ag Decision Maker2018

Crop

Budgets

2019 Budgets

available in January!

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2019 Cash Rents?• Cropland cash rents have declined over past

four years -- stabilized in 2018.

• Stabilization increases economic pressure on

farmers looking at continued low grain prices.

• Demand for rented land remains strong – so not

as much room to downward adjust 2019 rents.

• Find other ways to reduce costs (beyond rents).

• Improve crop marketing skills – “find the dime.”• Try tying lease arrangements to land

stewardship. Landlords are more interested in

soil & water conservation, may be more willing

to work with tenants to adjust cash rents if the

tenant uses conservation farming practices.

Manage 2019 Costs in all Categories Financial Analysis

Expertise?• Farm Financial Planning: Confidential, private service.• Computerized financial analysis using FINPACK software.

• For anyone who wants a more complete picture of farm finances.

• Takes guesswork out of whether a change would increase profitability

and improve cash flow.

• FINPACK analysis provides more in-depth evaluation, which many

lenders are requiring before further credit extension.

• Helps evaluate farm business, determine whether change is desirable.

• Provides in-depth plan so operator & lender can make decisions.

• Answers basic questions of sound farm business management:

• Where am I today? Where do I want to be? How do I get there?

• Looks at profitability, liquidity, solvency, and risk-bearing ability.

• Considers alternative plans such as addition, expansion, or phasing

out a livestock operation, or buying, selling, or renting land.

• Evaluate ways to correct negative cash flow, profitability problems.

How does it work?

What’s the cost?

• Trained extension associate meets with family – farm business owners to discuss the analysis and possible effects if changes are made.

• May introduce other farm and family financial materials or information about outside sources of help.

• Cost?? No charge. Funded by the Ag Credit School, a program of ISU Extension and Iowa Bankers Association.

• Who performs the analysis? Farm Financial Management associates are part-time extension employees with college degrees and special training in farm budgeting and financial analysis. They have farm backgrounds so they understand the current farm situation.

LOCATIONS of FINANCIAL ASSOCIATES shown on the map. Clients

may travel to these locations, or may be able to arrange meetings at

ISU Extension offices. If you want more information on this

no-cost financial analysis program .

. .

• Talk to the Farm Management Specialist presenting the program today.

• VISIT the ISU Extension website that describes the program and lists contact information:

• www.extension.iastate.edu/farmanalysis/

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Are you – or someone you

know – feeling stress on

the farm?

There are a

variety of

resources

available to

help.

IOWA CONCERN HOTLINE:

1-800-447-1985• Available 24/7

• Free

• Confidential

• All kinds of concerns –financial, legal, family, stress-related

Also 24/7:

Iowa Concern On-Line CHAT

• Just Google “Iowa Concern” and click on the link for On-Line Chat

• Available 24/7

• Free and Confidential

Resources

on

managing

Farm &

Family

Stress

Don’t hesitate to call –

Iowa Concern Hotline:

1-800-447-1985

Thank-you! Please contact ISU

Extension with your Farm

Management questions!

Melissa O’Rourke B.S., M.A., J.D.

Attorney –and– Farm & Agribusiness

Management Specialist www.extension.iastate.edu/agdm

morourke@iastate.edu 563-382-2949

@MelissaISU