Even with farmland values still setting records, it’s likely farmers will see increased competition for land still in 2023. Record-high net income and continued high commodity prices have farmers riding the land-acquisition wave. Cash rental rates are up 6% nationally and even double digits in some states, according to USDA. Iowa State University reported that 2022 state average rental rates were up $256 per acre, or 10% compared to 2021 and 15% higher than 2020.
However, producers seeking to rent more acres in 2023 should be on guard for these four red flags when pursuing more land:
>> Emotional decisions can lead to poor decision-making.
>> A high-rent farm that isn’t beneficial to the overall operation.
>> A “pay me now” landlord. Put in writing when you’ll pay rent in order to avoid this situation.
>> Questionable relationships. Plenty of land will change hands over the next 10 years, so ensuring a trustworthy relationship is key.
Read more on cash rental rates and tips for new rental contracts here.
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