Farmland rental rates climbing in conjunction with ownership costs

by

New survey data shows around half of farms that have farmland rental agreements up for renewal this year are expecting rental rates to increase, with some anticipating a significant jump in the land rent component of their cost of production.

Rising land rent costs are coinciding with the increasing cost of owning land, as borrowing costs and farmland values have climbed.

In collaboration with MNP, RealAgristudies looked at land rental agreements in the April Canadian Farmer Sentiment Index survey. The Friday Issues Panel on RealAg Radio included the discussion below on some of the key survey findings:

(click to enlarge)
  • 55% of farmers plan to renew land rental agreements this year, a figure which some say is higher than they expected due to the prevalence of multi-year rental agreements;
  • 53% of farmers renewing rental agreements this year expect land rent will increase;
  • 18% are bracing for an increase between 25 and 50%.

Concerns and implications:

  • Keep in mind that rental agreements can take many shapes and formats depending on the agreement between the landord and farmer, which may impact the risk and or cost to the farmer over the long and short term.
  • As Stuart Person of MNP noted, high rental rates may hinder producers’ profitability.
  • Increased cost of buying land, driven by higher interest rates, is affecting the rental market.
  • Wide variability in the cost of production between farms influences their ability to pay higher rents, with some farms managing costs much more efficiently.

Watch/listen to Stuart Person of MNP, Meagan Murdoch of Hill & Knowlton, Kelvin Heppner, and Shaun Haney discuss this data on the May 31 Friday Issues Panel. If you have any feedback to [email protected] or the RealAg Feedback line at 1.855.776.6147. 

 

Wake up with RealAgriculture

Subscribe to our daily newsletters to keep you up-to-date with our latest coverage every morning.

Wake up with RealAgriculture

Privacy Preference Center

Necessary

Necessary cookies help make a website usable by enabling basic functions like page navigation and access to secure areas of the website. The website cannot function properly without these cookies.

gdpr, __cfduid, PHPSESSID, wordpress_test_cookie, woocommerce_items_in_cart, woocommerce_cart_hash, wp_woocommerce_session, wordpress_logged_in, wordpress_sec, wp-settings, wp-settings-time, __cf_mob_redir, wordpress_cache, realag
__cfduid

Marketing

Measuring interactions with the ads on the domain.

__gads,fsk_ut_2317
IDE

Statistics

These are used to track user interaction and detect potential problems. These help us improve our services by providing analytical data on how users use this site.

_ga,_gid,_gat,_cb,_chartbeat2,_chartbeat4
_ga,_gid
metrics_token

Preferences

Preference cookies enable the website to remember information that changes the way the website behaves or looks, like your preferred language or the region that you are in.

chartdefaults, comment_author, comment_author_email, comment_author_url
JSESSIONID, _os_session,anonymous_votes,csrf-param,csrf-token,user,user-id,user-platform,intercom-session,intercom-lou,intercom-session
personalization_id, tfw_exp

 

Register for a RealAgriculture account to manage your Shortcut menu instead of the default.

Register