Oklahoma cropland rental rates, 2010-11

              Division of Agricultural Sciences and Natural Resources • Oklahoma State University
CR-230
1110
1 Averages reported are the simple average of rates reported by the respon­dents. They are not weighted by acres in the lease agreement.
2 Advantages and disadvantages of different types of lease agreements are discussed in OSU Extension Fact Sheets AGEC-214 and AGEC-215.
Figure 1. Regions Used in Reporting Farmland Leasing Survey Results
Northwest Northcentral
Southwest East
Oklahoma Cropland Rental Rates: 2010-11
Damona Doye Roger Sahs
Regents Professor and Extension Economist Extension Assistant Specialist
Rental agreements and rates are influenced by the landowner’s costs, the tenant’s expected earnings, previ­ous rates charged, competition for the land, government programs, tax laws, and the non-agricultural economy. The results of a statewide farmland leasing survey conducted in August of 2010 are reported here. Respondents were individuals contacted through the Oklahoma Cooperative
Extension Service who agreed to complete periodic surveys plus recipients of a mailing by the Oklahoma Agricultural Statistics Service. Approximately 160 surveys were returned with useable data. Figure 1 shows the regions of the state used in reporting survey results: northwest, southwest, north­central, and east.
On average, crop cash lease agreements had been in effect for 14 years (Table 1). Average lease sizes ranged from 175 acres in eastern Oklahoma to 399 acres in Northcentral Oklahoma. Most tenants and landlords in Oklahoma appear to be satisfied with their lease agreements. Fifty-eight percent of respondents with cash lease agreements and 50% of re­spondents with crop share agreements classified their leasing agreements as either good or excellent from a standpoint of fairness. Twenty-seven percent of respondents with cash lease agreements and 33% of respondents with crop share agreements classified their leasing agreements as adequate from the standpoint of fairness.
Cropland Cash Rental Rates
Cash leases require a fixed payment, typically cash (or infrequently, a specified yield such as 10 bushels of wheat). Survey results document some regional differences in rental rates and average sizes of tracts rented. Cash rental rates for dryland wheat were highest in the southwestern region of the state, averaging $33.12 per acre, compared to $29.04 to $32.68 in other regions of the state (Table 2).1 The range in reported rental rates was from $10 to $75 per acre. The state average of $31.78 decreased more than $1 per acre compared to the 2008 average of $33.14. While this was true in most regions as well, southwestern Oklahoma was an exception with the average increasing from $31.91 per acre in 2008 to $33.12 per acre in 2010.
Figure 2 shows the distribution of responses (98) for dryland wheat cash rental rates. None of the respondents reported a rental rate less than $10 per acre, 10% reported a rental rate between $10 and $19 per acre, 28% reported a rental rate between $20 and $29 per acre, 36% reported a rental rate between $30 and $39 per acre, 19% reported a rental rate between $40 and $49 per acre, and 7% of the respondents reported a rental rate of $50 or more per acre.
Dryland grain sorghum average rental rates were less than wheat at $27.90 per acre while dryland alfalfa averaged significantly higher than wheat at $41.61 per acre. (Note that there were only 6 responses on both grain sorghum and dryland alfalfa rates, thus the averages and distributions are less reliable than they would be with more observations.)
Cropland Share Rental Rates
In a crop share lease, certain costs are often shared in the same proportion that production is shared.2 In crop share leases statewide, the tenant on average receives around
2/3 of dryland wheat, alfalfa, or grain sorghum, while paying that or more of the fertilizer, herbicide, insecticide, and chemical application expenses (Table 3). On average, the tenant pays nearly all seed and harvesting (combining, hauling, cutting, raking, baling) expenses.
Current Report
Oklahoma Cooperative Extension Service
Oklahoma Cooperative Extension Fact Sheets are also available on our website at:
osufacts.okstate.edu