Leasing farmland for solar energy production remains a hot topic across the country, especially here in the Corn Belt. A Purdue University survey is seeking to find what the going rate is for that land.
The Purdue Ag Economy Barometer has been gathering this data going back to 2021.
“We’ve actually had to change how we give the answers to this question to capture the higher rates because in the early days, the vast majority of responses were at $1,000 per acre or less,” says Dr. Jim Mintert, Professor Emeritus of Agricultural Economics at Purdue. “That’s really started to shift, and if you look at the most recent results, 26 percent of the people who had a discussion, roughly 1 out of 4, said they were offered $1,500 or more per acre.”
In this most recent survey, 42% of respondents were offered over $1,000 per acre. Dr. Michael Langemeier, Director of the Purdue Center for Commercial Agriculture, says it’s interesting to see the wide ranges in these rates.
“There’s probably difference regional, which we can’t pick up because we don’t ask information about regional differences, but the main point I want to bring up is: do your homework! Just because you’re quoted a rate, it might seem really good compared to your cash rent. Try to find out what other people have been offered, if at all possible, because the rates vary tremendously.”
Mintert agrees, though they acknowledge that information can be difficult to get.
“The companies…they discourage that because if you sign one of the agreements, many of the agreements include a non-disclosure agreement with respect to the rates, but that doesn’t apply prior to signing.”
Mintert also encourages you to engage a professional during negotiations because there’s a lot more to the lease than just the dollar amount, like how the land would be managed for example.
Hear more from Mintert and Langemeier in the Purdue Commercial AgCast. You can listen below.
