Agricultural leasing fact sheet available from AgriLife Extension

Texas landowners have a new tool when it comes to determining agricultural leasing rates.

Tiffany Dowell Lashmet, Texas A&M AgriLife Extension Service agricultural law specialist in Amarillo, has published the fact sheet “Negotiating a Fair Cash Lease Rate in Texas.” The document is available as a free download at https://bit.ly/2v4svp2.

“One of the most common questions I am asked is how much a person should charge, if they are a landowner, or pay if they are the tenant, for an agricultural lease,” Lashmet said. “To help answer this question, I have put together a fact sheet listing several free resources available to Texas landowners that may help.”

From who to talk to at the coffee shop to the U.S. Department of Agriculture surveys, Texas Land Value Trend report and Texas A&M University’s agricultural economics department budgets, she said this fact sheet will help landowners and tenants find information related to average lease rates across the state.

“The best information usually comes from other landowners, livestock producers, the local AgriLife Extension county agent or range specialist—people with the latest information about conditions in the area who can help evaluate factors such as the amount and quality of forage, fences and water,” Lashmet said. “Visiting with these people is a good first step when determining a fair lease rate.”

Additional information may be found by way of published survey results from USDA, a yearly report by the Texas Chapter of the American Society of Farm Managers and Rural Appraisers, and interactive budgets from the Texas A&M agricultural economics department.

The fact sheet outlines what each group does and how their resources can be utilized to negotiate a fair lease price, she said.

“For instance, the USDA National Ag Statistics Service publishes survey results for cash lease rates each September,” Lashmet said. “Landowners and livestock producers can go to these reports and drill down to find results by state, by region within the state, and even by county.”

By way of example, average lease rates for Dallam County in 2016 were reported per acre/per year as $97.50 for irrigated cropland, $55.50 for non-irrigated cropland and $6.10 for pastureland.

Similar information can be found in the Texas Land Value Trends report, which includes information on land value ranges as well as average lease rate ranges for Texas, she said. These values are reported by breaking the state down into seven regions and then further looking at sub-regions within each.

Additionally, each year the AgriLife Extension district economists prepare budgets for various districts across Texas, based on a variety of crops. Texas Crop and Livestock Budgets for each district are available on the AgriLife Extension website at http://bit.ly/2H7D4ZM.

Lashmet said an example of the information included for District 1, which includes the Panhandle, are budgets for forage crops such as hay and silage; field crops such as corn, cotton and both irrigated and dryland wheat; and for livestock, including cow-calf and stockers.

Within the cow-calf budget spreadsheet is a line item for “Pasture Cost,” which is the lease cost, she said. For a cow-calf operator in District 1, the 2018 budget includes a projected cost of $7 per acre per year.

“Leasing land can be beneficial to both landowners and livestock operators,” Lashmet said. “Parties looking to determine fair lease rates should consider the numbers reported by these various agencies. However, the right lease rate for any piece of property is the one the tenant and landowner can agree upon, regardless of what the statistics say.”