An overview and recent snapshot of farmland rental in Oregon

Print Friendly, PDF & Email

The challenges associated with farmland accessibility for new and beginning farmers comes up often in agricultural policy discussions. Renting land is typically seen as a natural first step to securing land access, due to the lower required financial capital costs when compared with a land purchase. In this blog post, I’ll take a look at some of the recent patterns and trends in cash rental rates for Oregon farmland and offer suggestions for how to tailor future data collection efforts to provide more useful information for Oregon’s agricultural stakeholders.

In terms of the overall landscape of Oregon farmland, rented land accounts for a relatively small proportion of all land in farms. Per the most recent data published in the 2017 Census of Agriculture, rented farmland in Oregon accounts for 30% (about 4.7 million acres) of all farmland in the state. This is relatively low compared the national figure, which stands at 39%. The comparatively low rental percentage in Oregon can likely be chalked up to a few things. One is the large amount of grazing (pasture and range) land in the state. If it is not owned by the federal government, grazing land is generally more likely to be owned by the producer using it. There is also a large amount of irrigated cropland in Oregon – roughly 27% of all cropland in the state was irrigated in 2017 – which is also less commonly rented out than non-irrigated cropland due to the capital and maintenance costs associated with irrigation infrastructure.

The US Department of Agriculture’s National Agricultural Statistics Service (USDA-NASS) conducts its Cash Rents Survey every summer to collect data on the per-acre rent paid for non-irrigated cropland, irrigated cropland, and pastureland. A unique aspect of this survey is that it provides county-level data on an annual basis. Additionally, at just one and a half pages in length, the survey is very short and less complicated compared to other USDA surveys, which tends to produce a higher response rate. In 2022, 53% of the 3,733 surveyed producers responded to the cash rent survey in Oregon.

The 2022 county-level cash rental rates for Oregon are shown in the table below. For each county, the first number shows the 2022 cash rental rate for that particular type of land (a “-” indicates that no data are available for that county-land type combination) and the number in parentheses is the average value over the previous five years (2017-2022; note that there was no survey in 2018).

A few patterns in Oregon’s cash rental rates stand out. First, as one would expect, irrigated cropland is rented at a premium compared to non-irrigated cropland, with the statewide difference in 2022 being $160/acre, which is larger than the five-year average difference of $145/acre. The irrigation premium is attributable to the higher-valued crops that require irrigation water. The 2022 increase in this premium may reflect the multi-year drought Oregon’s producers have endured that has made irrigation water scarcer, and hence more valuable. Irrigation premiums tend to be largest in the drier parts of the state — e.g., Wasco ($334.50/acre) and Umatilla ($300/acre) had the highest irrigation premiums in 2022, whereas Benton ($26/acre) and Linn ($49/acre) had the lowest.

To give a better sense of the recent patterns in cash rents across the state, I’ve also mapped the cash rents for the same categories using the percentage difference of the 2022 value from its five-year average. All of the maps have the same color scale to facilitate a comparison across different cash rent categories. Non-irrigated cropland rents are down by 3.9% statewide but were up in most counties in the Willamette Valley and along the Columbia Basin, with Wasco (42%) and Columbia (45.7%) seeing the biggest gains. Irrigated cash rents are generally up statewide (4.5% overall) but are down in most counties in central and southeastern Oregon. Recent pasture rents show the largest amount of variation, with large drops in most eastern counties, particularly Harney (-57.8%) and Gilliam (-43.8%), contrasting with the large gains in Linn (46.4%), Jefferson (37.7%), and Tillamook (36.3%).

Moving forward, there are several pieces of information that would help to paint a more complete picture of Oregon’s farmland rental markets. For one, a major shortcoming of the current USDA cash rent survey is its limitations for tracking pasture rental. Renting out land used for grazing on a per-acre cash basis is relatively uncommon. While per-acre cash rental is the most common type of arrangement for cropland, pasture is more typically rented out on a per-animal unit month (AUM) or per-head basis, but these types of arrangements are not accounted for in the current USDA-NASS survey. Although the survey is designed to pick up the majority of cropland rental arrangements, it’s also worth noting that share-based rental arrangements are not included, though these represent a fairly small fraction of all rented cropland.

Other information that would be worth tracking is the renewal frequency of farmland rental contracts and the length of landlord-tenant relationships. To this point, although the USDA-NASS data gives a sense of cash rents in the current year, the values may be misleading if the rents were set several years prior. Multi-year contracts are especially common for irrigated land due to the investments in sprinkler and water delivery infrastructure required for irrigated production. In work I did previously at USDA’s Economic Research Service, we found that a large amount of land is rented between the same landlord and tenant for multiple years. Even if contracts are renewed annually, this makes it harder for cash-strapped new and beginning producers to access the land they need to build and grow their operation to a commercially viable scale.

This entry was posted in Farmland and tagged , . Bookmark the permalink.

2 Responses to An overview and recent snapshot of farmland rental in Oregon

  1. Shelby says:

    Is the cash rent for pasture a monthly rate? Please clarify because the “Cash Rent Expense per Acre” tables do not specify. They just list dollars.

  2. Dan Bigelow says:

    Thanks for the question, Shelby. For all land uses, NASS reports the annual cash rental rate and that’s what I reported in the table. The survey questionnaire asks respondents to report the total cash rent for the entire year. See the following link for the full 2023 survey questionnaire:

Leave a Reply

Your email address will not be published. Required fields are marked *