Agricultural producers can gain access to the land they need through two general channels. Some own their land, after purchasing it from another landowner, bidding on it in an auction, or inheriting it from a family member. The alternative to ownership is renting land from another producer or a non-operating landowner (a person who owns land but is not actively involved in agricultural production). Per the most recent data published in the 2022 Census of Agriculture, rented farmland in Oregon accounts for 29% of all farmland in the state. This is relatively low compared to the national figure, which stands at 39%, but still accounts for roughly 4.5 million acres of land in the state.
The comparatively low rental percentage in Oregon likely can 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 46% of all harvested cropland in the state was irrigated in 2022 – which is also less commonly rented out due to the capital and maintenance costs associated with irrigation infrastructure. For example, of Oregon’s farms where all of the harvested cropland was irrigated, only 24% of the land was rented. These farms account for 39% of all farmland in the state, but only 10% of all farmland in the US.
Each year, the US Department of Agriculture’s National Agricultural Statistics Service (USDA-NASS) publishes cash rental rates at the state and county levels. The county-level data come from a cash rental rate survey conducted every summer to collect information on the cash rents 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 shorter and less complicated than other USDA surveys, and as a result, the response rate tends to be relatively high. In 2024, 55% of the 3,349 surveyed producers responded to the USDA-NASS cash rent survey in Oregon. This is actually down from the 70% response rate in the 2023 survey, so the latest numbers should be interpreted with that in mind. The state-level cash rent data come from the same June Area Survey that USDA-NASS uses as the basis for its annual farmland value estimates (see my recent blog post here).
Over the past year, the statewide cash rent for irrigated cropland increased by 0.8% in inflation-adjusted terms, bouncing back from declines in the previous two years. Irrigated cropland tends to be rented for much more than non-irrigated cropland, due to the higher returns associated with irrigated production and the costs of maintaining irrigation-related equipment and water conveyance infrastructure. In 2024, irrigated cropland was rented for an average of $266/acre, which is in line with the average rent over the previous five years (2019-2023). Looking across the state, irrigated rents tend to be highest in the northern Willamette Valley and other counties along the Columbia River (Hood River, Morrow, and Umatilla). With a couple of exceptions (Klamath and Malheur), counties in the eastern, central, and southern parts of the state tend to see lower irrigated cash rents. The largest percentage gains over the previous year occurred in Clackamas and Morrow, while Deschutes, Baker, and Klamath saw the largest declines.
In contrast to irrigated cropland, non-irrigated cropland rent, at $107/acre, was down by 1.85% over the past year. Note that the nominal 2024 rental rate of $107/acre is identical to the one reported in 2023, so the decline is entirely due to the inflation adjustment. Compared to the inflation-adjusted average over the previous five years, the 2024 rate is down by about $5/acre. Counties in the northern and mid-Willamette Valley, along with Tillamook County, tend to have the highest rents. Given its dry climate, Eastern Oregon tends to have lower non-irrigated cash rents. Over the past year, the largest annual percentage gains were in Umatilla and Clackamas, whereas Union, Tillamook, and Wasco had relatively large percentage decreases.
The average 2024 pasture cash rent was $11.50/acre. Like the non-irrigated cropland rent, this value is unchanged in nominal terms compared to the previous year but represents a 1.85% annual decrease after accounting for inflation, and continues a general downward trend since USDA-NASS started their current rental rate reporting program. Although the dollar values involved tend to be lower on a per-acre basis, pasture operations tend to be much larger, so small deviations in rental rates can add up quickly. Pasture rents have generally declined continuously since 2009, with the 2024 rent being about $2.50 (or 18%) lower than the 2019-2023 average of $14/acre. Western Oregon tends to have the highest pasture rents, while eastern Oregon, where farms tend to be larger, have lower per-acre rents. Lower average pasture rents give way to large percentage changes from year to year. For example, Gilliam and Harney had 85 and 45% respective gains, while Polk (-30%) and Columbia (-22%) had large declines.
As I’ve mentioned before, it bears emphasizing that the USDA-NASS pasture rent figures paint an incomplete picture of the rental market for this type of land. This is because the USDA survey only reports on land rented for cash, but most private grazing land is rented on a per-animal unit month (AUM) or per-head basis. In addition, a considerable fraction of land in grazing operations comes from public land owned by the Bureau of Land Management or U.S. Forest Service, with those lands also rented on a per-AUM basis.
Cash rents can be a useful snapshot of the overall health of the farm economy, as they are heavily influenced by the net returns to agricultural production. Nationwide, cash rents reached a record level this past year, which may squeeze farm profits for renters when other input costs remain high amid falling commodity prices.
Rents also tend to be a lagging indicator. Leases for the upcoming year tend to be negotiated following harvest in the late fall, winter, or early spring, so the values reported by NASS for 2024 are more reflective of what landowners and renters expected the year to bring, not what actually happened. In addition, some leases, particularly for irrigated farmland, tend to be renewed on a multi-year basis. Thus, for example, a three-year fixed-cash lease covering the 2022-2024 production years could also be included in the 2024 NASS values, which makes it further removed from current production conditions.
Because purchasing land outright typically requires extensive financial capital (e.g., money for a down payment and other land currently owned as collateral), renting is often seen as a way for new and beginning producers, or producers who are otherwise financially disadvantaged, to build and grow an operation. Land rental, however, is far from being limited to smaller producers, as discussed in this 2016 USDA report that I coauthored. Most commercial farms in the US contain a mix of owned and rented land. In addition, it can be difficult for beginning producers to find land to rent, as landlord-tenant relationships tend to be fairly long-lasting, despite the fact that most contracts for farmland are renewed annually, and about one-third of land is rented between family members.