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Analyst anticipates spike in rental rates similar to a decade ago
Cash rent negotiations for 2022 are underway and a farm management analyst expects rates to reflect higher commodity prices.
Kent Thiesse with MinnStar Bank in southern Minnesota tells Brownfield there’s a lot of demand for land driven primarily by improved profitability.
“Certainly as more farmers are looking to increase their land base, they’re willing to pay a little more for land rent. Just like we’ve seen land values come up, land rental rates tend to follow along.”
He says there was a big spike in land rental rates between 2010 and 2014.
“When we had some fairly profitable years, and we’re kind of seeing that same thing occur. We saw a slight increase in rental rates in ’20 from ’19, and a bigger increase into ’21. And we’ll likely see an even bigger percentage increase as we head into 2022.”
Thiesse continues to champion flex lease arrangements because they allow for variables in yield and commodity prices.
