The Purdue Center for Commercial Agriculture’s long-run cash-rent spreadsheet is available to assist operators and tenants with cash-rent-renewal decisions. The spreadsheet was specifically designed several years ago to help determine whether it would be feasible to continue to rent a particular parcel of land in a depressed-price environment. Farmers typically find that rental rates don’t adjust rapidly during a downturn and consequently they lose money on rented land. But most farmers don’t want to give up rented land even if it’s not profitable because it’s difficult to find another parcel to replace it. They continue to hold on to rented land waiting for better prices, lesser costs and-or better yields.
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Michael Langemeier
Mike Boehlje
Joana Colussi
Michael Langemeier is an agricultural economist with Purdue University. Mike Boehlje is a Distinguished Professor Emeritus in the Purdue University-Department of Agricultural Economics. Joana Colussi is an assistant professor in the Purdue University-Department of Agricultural Economics. Visit ag.purdue.edu for more information.
