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Economist says rents for subpar farm ground are still too high
Farmers continue to pay too much to rent subpar farm ground, according to Dr. Michael Swanson, chief ag economist for Wells Fargo.
“The single biggest thing that we have to get—to get this market to make money—is for people to stop overpaying for average and mediocre ground,” Swanson says.
Swanson says he understands how difficult it can be to give up rented ground.
“It’s really hard for an operator who is operating 1,500 acres to want to give up 200 acres because you know they’re not making any money,” he says. “You wonder what you’re going to do with your equipment and your time. So you keep paying too much for certain fields.”
But Swanson tells Brownfield he doesn’t see a big turnaround in the ag economy anytime soon.
“This is a situation where it’s on the farmer-operator to make different decisions. Because we’re not going to get a real run-up in crop prices. There’s really no incentive for corn to go back to 4.50 or something like that.”
According to a University of Illinois report, cash rents in 2020 were virtually unchanged from 2019 across most of the Corn Belt. Analysts says ad hoc federal aid to farmers is one of the reasons cash rents are not coming down.
