A recent article published by Reuters notes that farm land across the Midwest, including South Dakota, reflects that despite the lower prices being received by farmers for corn, soybeans, and other commodities, land prices are holding steady. Though real estate professionals are seeing perhaps a bit less demand, they haven’t seen a big reduction in prices – yet. Professionals state that there still isn’t an abundance of land on the market and so while sellers aren’t seeing an increase in prices, there hasn’t been much of a market decline.
Land rental prices are remaining similarly steady. If anything, market analysts are noticing more flexibility being added into lease agreements. Rather than an outright reduction in rent prices, farmers concerned about being able to pay rent with lower crop prices are negotiating a variable rent agreement based on crop production and market prices at the time of harvest.
These types of lease agreements provide a win-win situation for all concerned parties and can be a good option individuals using lease agreements as an integral part of their operation.