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Cash rental rate expectations for ’23

Four out of ten corn and soybeans growers surveyed in the latest Ag Economy Barometer expect farmland cash rental rates to rise in 2023.

Jim Mintert, director of the Purdue University Center for Commercial Agriculture, says among respondents who expect rates to increase “27 percent said they expected a zero to five percent increase and on the other end of the spectrum, 34 percent said they thought rates might go up 10 percent or more.”

He tells Brownfield farmer expectations are in line with long-term cash rental rate trends.  

“On average (cash rental rates) go up between two and a half and three percent per year, so I think people are back to expecting something a little closer to or slightly above the long-term trend,” he says.

The Purdue University/CME Group Ag Economy Barometer is a monthly national survey of 400 U.S. producers.

Producers remain relatively optimistic about short-term and long-term farmland values.

This month, the Short-Term Farmland Value Index rose one point to a reading of 128 and the Long-Term Farmland Value Index fell 4 points to 146. The small decline in the long-term index follows last month’s nine-point rise.

The survey found that among respondents who expect farmland values to rise over the next five years, there’s evidence of a trend developing with an increasing percentage of producers choosing non-farm investor demand as the main reason they expect values to rise. Nearly 60 percent of respondents who expect values to rise chose non-farm investor demand as the main reason.

Audio Jim Mintert: