--> Now is the time dictated by Iowa law to begin negotiating crop land leases for 2015 or at least notify your tenant/landlord, as the case may be, if you wish to change any of the terms in your current lease. (Remember that mutual consent is required if you want to make changes in the middle of a multi-year lease.)
--> If you wish to terminate a cropland or pasture lease ending March 1, 2015, and have not already done so, you must serve notice in the manner set out in Iowa Code §562.7 on or before September 1, 2014. This statute does not apply to custom farming arrangements, but by tradition, many farm operators have come to expect notice by September 1.
--> Basing cropland rent on the current CSR2 (“corn suitability rating” or in some regions “crop suitability rating”) of the soil in question is the most accurate and fair way to arrive at a comparable rent [See Computing a Cropland Cash Rental Rate: http://www.extension.iastate.edu/Publications/FM1801.pdf]. In concert with the slight decline in farm land values and the dramatic drop in grain prices, cash rental rates have remained steady or dropped during the current year. Below is a table of farmland values and cash rents from last year's ISU surveys in counties for which I prepare farm land leases:
--> The table above is based upon averages from sometimes limited survey results, but it does give a general idea of what the market for Iowa farm land looks like. The leases I have prepared so far this year continue to fall in the $2.50 to $3/CSR point range, with the higher quality land falling at the higher end of that range. There continues to be interest in deviating from the traditional cash rent model. By using a formula, tenants and landlords can avoid the often stressful exercise of negotiating a new rental rate every few years in order to keep up with changing economic circumstances. Flex lease formulas can also allow landlords to participate in windfalls during good years and tenants to reduce risk in bad, although current crop insurance revenue products go a long way in protecting farm operators from price and production risk. If you would like more information, I encourage you to contact your local ISU extension office.
--> Water quality issues and increased scrutiny of farm nutrient runoff is currently the prime topic of interest on the political front.
--> Please contact my office if you have questions. Good luck with your negotiations!
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