Cash rental rates for South Dakota non-irrigated cropland increased marginally in 2014 according to results from a farm real estate survey conducted by agricultural economists at South Dakota State University. "The 2014 average cash rental rate for South Dakota non-irrigated cropland was $150.10 per-acre; an increase of $5.80 per-acre or 4 percent from last year (Figure 1)," said Kim Dillivan, SDSU Extension Crops Business Management Field Specialist. "This percentage increase was smaller than increases reported in the past three years." For example, Dillivan said annual increases of 18.8, 22.8, and 14.1 percent were reported in 2013, 2012, and 2011, respectively. The percentage increase in average cash rents for 2014 was slightly larger than the 3.3 percent increase reported in 2010. Figure 1 shows cropland average cash rental rates for 2009-2014. Increasing Cash Rents of South Dakota Cropland All South Dakota regions experienced increases in cropland average cash rental rates from 2009 to 2014 (Figure 2). Cash rents for cropland in the northwest, south-central, and north-central regions increased $15.85, $33.05, and $55.75 per-acre, respectively during this period. However, cropland in the southwest region had an increase in average cash rents of only $1.10 per-acre. The largest dollar increase in average cash rents from 2009 to 2014 was in the northeast region where rents increased $96.15 per-acre. "Since 2009, all South Dakota regions experienced increases of at least 65 percent in cropland average cash rents except the southwest region (Figure 2)," Dillivan said. For example, cropland average cash rents in the northwest region increased 65.4 percent, while cropland average cash rents in the southeast region had appreciation of 82.7 percent. The largest percentage increase in average cash rents during this period was 99.1 percent in the northeast region. The smallest percentage increase in average cash rents was 4.0 percent in the southwest region. Figure 2 shows cropland average cash rental rates for 2009-2014 by region. "Regional average cash rental rates for cropland are simple average, or mean values of useable survey responses," Dillivan said. He explained that statewide average cash rental rates for cropland are weighted by the relative number of acres in cropland by region, and the proportion of farmland acres leased in each region. "In general, average cash rental rates for cropland are highest in the eastern part of the state (Figure 2). Also, recent dollar increases in rental rates were greatest in regions east of the Missouri River, especially in 2012 and 2013. Much of this growth was likely driven by relatively high grain and oilseed prices in 2012 and early 2013, leading to improved net farm income," he said. South Dakota Cropland Cash Rents Influenced by Productivity Survey respondents were requested to estimate per-acre cash rental rates based on land productivity. High-productivity cropland is assumed to have superior yield potential and as a result, command a price premium relative to low-productivity cropland. Survey responses are consistent with this assumption. For example, 2014 cash rental rates in the southeast region varied from an average of $135.70 per-acre for low-productivity cropland to an average of $317.80 per-acre for high-productivity cropland (Figure 3). Lowest cash rental rates for both low- and high-productivity cropland occurred in the southwest and northwest regions. Figure 3 shows 2014 cropland average cash rental rates by region and productivity. Reported cash rents for South Dakota cropland are available in the publication South Dakota Agricultural Land Market Trends 1991-2014. This publication reports land values and cash rental rates for the state as a whole, for each of the eight South Dakota land regions, and by land use including irrigated and non-irrigated cropland, rangeland, pasture and hay land. The 2014 estimates for land values and cash rental rates are based on survey data supplied in February and March by agricultural lenders, Farm Service Agency officials, rural appraisers, assessors, realtors, professional farm managers, and SDSU Extension field specialists. Land values and cash rental rates are reported only for privately owned land and should not be considered as estimated values for tribal, federal, or state owned lands. EDITORIAL NOTE: This iGrow information is based on surveys completed by individuals with knowledge concerning South Dakota cropland cash rental rates. These findings may or may not reflect actual market conditions. Readers should use this information as a general reference only and rely on local sources for more specific details. This iGrow report is third in a series of reports on agricultural land market conditions in South Dakota. Future reports will focus on rangeland, pasture, and hay land values and rental rates. Two previous iGrow reports focused on South Dakota all-agricultural land and cropland values, respectively.
S.D. Cropland Rental Rates Rise
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