Date of this Version
Cornhusker Economics (March 2011)
The widow lady was calling from her retirement care facility. Her tenant of over 20 years wanted to finalize the cash rent agreement for 2011, and she was wondering, “What should I do?” With a lease rate that hadn’t seen an increase for several years, her per-acre rent payments in 2010 were not even half the average for the area. Even when her tenant said he could “raise it a few dollars per acre for this year,” the 2011 payments would fall even further behind the area average.
The out-of state land owner was following national media coverage of the strong agricultural economy and wanted to raise the rent on his irrigated land to $450 per acre. This was a big jump from the $250 per acre level in 2010, which was more than fair since the tenant was providing both the center pivot and irrigation motor. But because the land owner had heard of some people in his state netting over $400 per acre last year with a crop share lease, he was determined to get a big increase.