2014 Cropland Lease Arrangements in Nebraska

2014 Cropland Lease Arrangements in Nebraska

Types of agland lease arrangements and their percentage use

Figure 1. Nebraska land rental arrangements with grain storage included as part of the lease. (Source: UNL Nebraska Farm Real Estate Market Survey, 2014)

Table 1. Land Lease Arrangements of 2014 Rental Transactions, by Agricultural Statistics District in Nebraska
  Average Percent Distribution Cash Lease
Crop
Share
Cash
Lease
Cash Lease
w/Flexible Provisions
   - - - - - Percent - - - - -
Northwest 74 20 6
North 39 52 9
Northeast 19 68 14
Central 33 56 11
East 43 46 12
Southwest 34 58 9
South 49 43 8
Southeast 46 44 11
State 41 48 11
Source: UNL Nebraska Farm Real Estate Market Survey, 2014.

As part of the Nebraska Farm Real Estate Market Survey, each year panel members are surveyed on new or emerging issues related to the agricultural land market in Nebraska. The special feature recently published as part of Nebraska Farm Real Estate Market Highlights 2013-2014 report evaluated the types of contractual rental arrangements used in Nebraska to lease agricultural land along with the availability of grain storage as part of the agreement.

Panel members were asked to estimate the percent of each style of cropland lease arrangement in their area including:

  • Crop Share: landowner receives percentage of actual crop yield as payment for leasing the agricultural land to tenant. Landowner may share input and production costs of raising the crop. 
     
  • Cash Lease: landowner receives an agreed upon cash payment amount for leasing the agricultural land to the tenant.
     
  • Cash Lease with Flexible Provisions: landowner and tenant set a base cash rental rate which can flex upon actual crop yields, prices, or a combination of the two. Final cash payment made to the landlord for leasing the agricultural land to the tenant may have premiums or discounts made to the base rate depending upon the agreements set up by the two parties.

Land lease arrangements for 2014 varied widely across Nebraska. On average use was divided among cash lease (48%), crop share (41%) and cash lease with flexible provisions (11%).

The Northwest District had the highest rate of crop share leases at 74% percent while the Northeast District had the highest rate of cash leases and cash leases with flexible provisions at 68% and 14%, respectively. Survey panel members indicated that use of the different types of leases across the state correlated to the primary types of crops historically raised in a district and their yield expectations.

Read the rest ...

of this July 9 UNL Cornhusker Economics article.

Jim Jansen
Extension Educator in Cedar and Knox Counties
Roger Wilson
Extension Budget Analyst and Farm Management Specialist

Online Master of Science in Agronomy

With a focus on industry applications and research, the online program is designed with maximum flexibility for today's working professionals.

A field of corn.