Tuesday, May 19, 2009

Pondering the average...

Have you checked your county's average cash rent*?  How close to accurate do you think it is?
The data will be based on information NASS gathered from 700,000 agricultural producers nationwide during the 2008 end-of-year surveys: the biannual cattle survey, the biannual sheep and goats survey, the quarterly crops/stocks survey, the annual acreage and production survey, and the first-ever county-level cash rents survey. [More]
 I think several cautions should be considered when utilizing this data.

First, it is self-reported.  While I do not question respondents' honesty, there is an inherent conflict of interest in putting out your highest rents for public knowledge.

Second, there is significant inertia in cash rents.  Some multi-year rents are still stuck on below market rates and won't show up for 3+ years, for example.

Third, some cash rents are simply tenants taking advantage of clueless owners and operating on figures from years ago.  I know this, since like many farmers who have rented new ground, I have seen the astonishment and subsequent irritation when I offered my bid.

Fourth, I think smart operators are working to find ways to make their rents non-comparable to avoid constantly chasing some reported figure. One reason for variable rents is to do just this.  If a tenant is tiling or improving the ground, building storage, clearing trees, etc. the rent could be altered by the value of that work.

Fifth, these are county averages.  What would really add some value is to have the standard deviation.
Still, these numbers will be what folks work with to explain the plight/good fortune of farmers.  Remember, with low reported average rents more of us look like we're making a killing our here.

* Some driving hints:
  • select one filter at a time starting from the upper left
  • you can skip selecting a county to see a list of all counties
  • wait for the screen to refresh each time
  • click for the data


From Virginia said...


The FSA folks running the CRP asked Congress to require this survey in the 2008 Farm Bill. FSA has always been criticized for CRP rental rates being too low or too high and they view the NASS data as better than the swags previously developed by local FSA committees. Time will tell if it is an improvement.

Anonymous said...

Virginia, I am not sure if it is an FSA thing or not. My Extension office did a full court press on our county last fall in obtaining this data. They said there is never any local data for the county because not enough farmers participate, so we needed to participate.

I am not sure if Extension, FSA, or any of these organizations have enough pull with Congress to get things included in the Farm Bill. Now SWCDs, they have a powerful lobby...lots of WDCers cow-tow to them for whatever reason. Maybe they wanted the survey in....LOL