UD to study Delaware farm rental rates

Leased farmland in Delaware accounts for 31% of all farmland in the state, according to the 2019 U.S. Census of Agriculture. | DBT PHOTO BY KATIE TABELING

NEWARK — As developers demand more land in the First State, the University of Delaware Cooperative Extension has launched a survey for farmers on rental rates.

The survey asks farmers to identify their farms, bushel rates and what they feel is a fair rental agreement to lease land to grow crops. Individual responses will be kept private, but cumulatively, it will be used to assess the average rate farmers are paying to rent out land — and how that impacts a farm’s cash flow.

“Development pressure has increased land values significantly in the state and farmland availability is decreasing at a rapid pace. Farming is becoming a difficult business as commodity prices are decreasing and production costs are increasing,” UD Farm Business Management Specialist Nate Bruce, who is collecting the survey responses, told the Delaware Business Times. 

“We want to use the results from the survey to help producers make more accurate decisions when they are making budgeting decisions for the upcoming crop year and they show them different returns at different rental rates seen across the state,” he added.

Leases historically have been a starting point for early producers as they learn the trade. In particular, these leases may include a cash lease, a lump sum or cash per acre; flexible lease that depends on the crop yield for the season; or a crop-share lease that pays a portion of the harvest.

Flexible leases can benefit farmers in low-yield seasons, while a cash lease incentives tenants to produce more of the crop. 

Leased farmland in Delaware accounts for 31% of all farmland in the state, according to the 2019 U.S. Census of Agriculture. That’s down from 42% in the 2017 census.

The number of farms has stayed the same at 2,300 over the past six years, but the real estate value has gone up as developers have been seeking out land in the First State. Housing developers have been pushing further south and around the C&D Canal, as well as the growing solar field industry.

Cash rents for crops were $174 per acre for irrigated land and $94.50 for non-irrigated land

The Delaware Department of Agriculture’s 2021-2022 statistics bulletin valued farm real estate average in the state at $8,250 in 2017. Last year, it was valued at $9,300.