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What is the going rental rate for organic cropland?

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Rental rates for all cropland have increased rapidly over the past five years. Ethanol mandates, strong export markets and the increased demand for meat and dairy products have resulted in high conventional grain prices. The demand for more conventional cropland is driving the rate increase.

People often think that because land is certifiable as organic, and because the organic premium is higher than conventional prices, that organic cropland can command higher rental rates. This is definitely not true. Organic farmers are usually not willing to pay any more than the going rate for similar conventional cropland — nor should they, for a number of reasons.

Conventional farmers can focus only on the two most profitable crops: corn and soybeans. The advent of GMO, glyphosate-tolerant crops has allowed the two-crop rotation to become the norm. Spray for weeds, spray for pests, add synthetic fertilizer as needed and, as long as you have insurance to cover disaster and subsidies to cover low pricing, you have a “can’t-fail” system that is driving rental and land prices to historic highs.

Organic farmers cannot, by law, continually plant row crops year after year. They must use farming practices that protect and build soil. So they have more complex crop rotations that include cover crops, small grains and forages. They also cannot use the time- and labor-saving herbicides and pesticides. So they must have a much more long-term approach to build soil and control pests. It is not uncommon to see five- to seven-year rotations in organic row crop systems. Organic small grains and forages do not command the same premiums as corn and soybeans. Knowing that, organic farmers are unwilling to pay more than the going rate for rental land, and they usually want longer rental contracts to reap the results of soil building.

Organic farmers, also by law, have to protect the natural resources of the land they farm. The fence row to fence row, put-everything-under-cultivation approach of conventional row crop farmers may make perverse sense economically, but it has been a disaster for our natural resources. An estimated eight million new acres of previously unfarmed land, much of it sensitive wetland or previously conserved acreage, has gone under cultivation, mostly to conventional production, over the past five years due to the insatiable quest for more cropland.

Organic farmers must protect wetlands, streams and natural areas by rule, and because having diversity actually helps protect against disease and pest outbreaks. Landowners need to take into account long-term goals for their land, and not just consider the highest possible rental price when considering with whom to rent their land. If bulldozing down trees, ripping out fencerows, tearing out contour strips and terraces, filling in wetlands, spraying it all with glyphosate, and dousing it with anhydrous ammonia sounds incompatible with your land use vision, you should take that into account when negotiating rental rates with organic farmers.

Cropland rental rates vary considerably from region to region. Soil quality and land quantity are the main factors to consider. Marginal land that needs a lot of inputs to be productive will be on the low end, while larger acreages of high quality soil will command the highest rates. Rental rates may be as low as $125 and up to $250 or more per acre for the most desirable cropland. The best way to determine local rates is to talk with your county’s University Agricultural Extension Agent. They are usually familiar with the going rates in your area. Getting a soil test and understanding the results can help when negotiating rental rates.

It pays to talk with potential renters about their management practices. Ask them about their crop rotation plan, pest and weed control, their soil-building practices, and how they plan to prevent erosion and protect sensitive natural areas. Organic farmers should be able to explain their management practices. Landowners who care about the stewardship of their land should and will make their rental decision on more than maximizing rental rates.

For more information about organic contracts and rental agreements, see the Farmers’ Legal Action Group (FLAG) website .

Posted: Jan 2017
Answer By: Joe Pedretti