40% of Farm Operators Willing to Walk Away from Cash Lease

Some 12% of Pro Farmer Members and LandOwner subscribers say they “absolutely will” walk away from a 2016 cash lease “if the rental rate is not lowered.” That finding comes from our annual fall survey of both groups. Another 28% say they “probably will” walk away if they do not receive relief on the rental rate. That’s a total of 40% who are willing to give up ground if their rental rate is not adjusted. This is the first year we’ve asked this question so we do not know how this compares to a year earlier.

Interestingly, 50% of respondents say they “probably will not” terminate the lease if the rate is not lowered and 10% say they “absolutely will not” walk away from the lease. That’s a total of 60% who will keep the lease — a high percentage, in our mind, considering the kind of losses these operators face if they go ahead and farm that ground in 2016.

Some 25% of survey respondents say they expect cash rents to remain unchanged in 2016. That’s down from the 29% our survey found in 2014. Additionally, only 2% expect cash rents to rise in 2015. That compares to 4% who looked for an increase in 2014. Meanwhile, 42% said they expect cash rents to decline by less than 10% for 2016. That compares to 40% who looked for a decrease of less than 10% in 2014. We note that after-the-fact surveys found cash rental rates declined by about 5% in 2015. Some 31% of survey respondents look for rents to decline by 10% or more for 2015. That compares to 27% who looked for a similar decline for 2015.

If interested in seeing a copy of LandOwner, just drop me an email at landowner@profarmer.com or call 800-772-0023.