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Farmland lease costs could rise sharply in 2022
A University of Missouri ag economist said he expects farmland lease costs to rise more than 10 percent in 2022 compared to last year.
Ray Massey tells Brownfield the sharp increase would follow the recent trend in farmland values.
“What we see with lease values is that they tend to lag land values,” Massey said.
He said strong farm incomes from high commodity prices, paired with low interest rates, have driven the land market for nearly a year. Massey said the expected rise in farmland lease costs would double the typical growth rate, putting steep financial pressure on farmers in the next few years if commodity prices fall.
“Commodity prices – they go up and down, fertilizer prices go up and down,” he said. “When you have a high land value or high land price, that part of the cost of production is pretty fixed, it’s not going to move very much. And so, it can have a long-term impact on a farmers profitability.”
Massey said the rising land and lease costs will likely slow farm growth and block potential new farmers from the industry.
