Going into 2021, experts' best guess was that newly negotiated farmland rental rates across the region would be a mixed bag: some staying the same, some moving higher, some dropping.
That's the case in North Dakota, according to a new 2021 report funded by the North Dakota Department of Land Trusts. Some agricultural producers and landowners use the annual report as an impartial, third-party source to help determine the the price that the producers pay to rent nonirrigated cropland, nonirrigated pasture and nonirrigated "tame" hay land. Tame hay land refers to land that has been planted to cultivated grass or legumes, particularly alfalfa.
Bryon Parman, North Dakota State University Extension ag finance specialist, said survey results were about what he expected. Though 2020 government payments and higher crop prices at the end of last year helped farmers' and ranchers' bottom lines, just one year of relatively good financial returns — after several years of weak financial returns — weren't enough to trigger across-the-board rental rate increases, he said.
He recommended not reading too much into survey results, especially in counties where the results were based on relatively few reports. Results in a county with only a handful of reports could have been unduly influenced if the land involved was of below-average quality or if they involved an older relative selling or renting land to a younger relative at a discounted price, he said.
"One year just isn't long enough to establish a trend," particularly in counties where survey results were based on a small sample, he said. "Looking at rental rates over the past three or five years provides a bigger sample and generally a more accurate appraisal."
The report was based on a survey this winter in which more than 1,900 farmers and ranchers participated. It came up with county-by-county averages, but not statewide averages. The county results varied considerably, reflecting such factors as local weather conditions and local competition to rent land.
For example, the average rental rate for nonirrigated cropland in Cass County, the state's most populous county and typically the nation's leader in soybean production, rose to $130.40 per acre in 2021 from $126.30 per acre the previous year.
In contrast, the average rental rate for nonirrigated cropland in Sioux County, in western North Dakota, an area where drought is a growing concern this spring, fell to $31.40 per acre in 2021 from $36.70 per acre last year.
A similar pattern — some rates holding roughly the same, some rising, some falling — held true for nonirrigated pasture and nonirrigated tame hay land, the survey said.
As is always the case, rental rates generally were highest in the eastern third of the state, dropping off in the middle third of the state and declining further in the western third. That reflects climate and soil, which typically are most favorable for agriculture in eastern North Dakota but become less so moving west.