organic farm land rent rate
I was wounding what the farm land rent rate should be for 220 acres of organic farm crop land. My farm is certified organic dry land located in Barton county. The current rent is $75.00 per acre and thought that was to cheep. Usually planted in a rotation of corn, beans and wheat. Is $150.00 rent per acre too high to ask. I'm looking for a benchmark to start and be fair to farmer and myself.
There is not a lot of organic farmland in the area to get a feel for this. I will check with the ag business specialists to see if they have any ideas.
Do you have an e-mail and I will forward their responses to you. Thanks
I didn't get your e-mail but here are the comments and links as best as I can post them:
I imagine if they have certified organic land it is definitely worth more for rent, but the question is really how much more? And the problem is as you know there is such a variation in rents paid already. I would dare say there are probably plenty of rents below $75 out there in the Nevada area, but I also imagine there are some close to or in the neighborhood of $150 for just conventional land. I might be wrong, but I bet that range already exists out there based upon the quality of the land and how aggressive the local players are. Questions like these are so difficult to answer.
Ditto what Wes said. However, there certainly should be some premium for land that is already certified simply because of the cost, time lag, and hassle of certifying farmland and the relatively scarcity of significant sized parcels that would certify as organic. Likely they are coming out of CRP or in very marginal cropland areas.
Here’s the link to the conventional cash rents by county:
Attached is the contact for Sue Baird, who is president of the Missouri organic association, perhaps she would have a handle on premiums currently paid.
SueBaird Organics LLC
20547 Creek Rd
Bunceton, MO 65237
Phone: (660) 427-5555; Cell (573) 619-9139
Are the organic crops grown under contact? What is the pool of organic growers in your area like? i.e., demand for organic acres. Sounds like it is fairly low.
My suggestion is for them to start with the rental rate data for conventional cropland—primarily G427 and the NASS survey data for state and individual counties from AgEbb—and negotiate from there based on verifiable differences in organic costs/returns/risks. The Iowa budgets are a start. Actual cost and yield from the tenant data is better.
Arguments for lower rent for organic vs conventional include potentially less competition and higher costs of production/lower yields to grow crops and maintain organic certification. Argument for higher rent is potential higher net returns per acre via price, adjusted for likely lower yields and higher costs.
If possible, key is for both them to be working from the same set of data. What they agree to is the “right” answer, regardless of what anyone else may be doing.
Brent 660-827-0591 ext 105