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ALEXANDRIA, Minn. 鈥� Farmers may be preparing to operate on a net loss in 2025 with major commodities like corn, soybeans and wheat expected to sell for less than the inputs it takes to grow them.

For those that must rent land, land rental negotiations may be one way producers seek to reduce their costs.

鈥淏ecause a lot of their other expenses they can鈥檛 negotiate as well,鈥� University of Minnesota Extension educator Nathan Hulinsky said during a fair rental agreement workshop on Tuesday, Nov. 19, in Alexandria. He explained how farmers don鈥檛 have the power to negotiate with vendors selling seed and fertilizer, but they may have some wiggle room in rent, which in cases like soybeans is the biggest expense.

Contributed photo

On the other hand, with land values continuing to hold higher, chances may be slim that landowners will be slashing their expected incomes on land that continues to be assessed at higher market values.

Hulinsky is on his annual tours around the state presenting these workshops that can help both landowners and renters hopefully land on a win-win agreement.

While markets fluctuate from year to year, the issues that must be considered to reach a fair agreement remain consistent. Knowing and understanding that data can give both sides some power in negotiating.

It鈥檚 fair to say that every county has different rental rates based on USDA survey data. Those rates are built from factors like land value, fertility, soil type, ease of being able to farm the land, accessibility, and factors like tiling or irrigation. These all play into how many bushels a farmer may expect to get per acre.

According to USDA estimates, non-irrigated cropland cash rent averaged $200 an acre in Minnesota in 2024. That鈥檚 $2 more than in 2023, according to the USDA鈥檚 National Agricultural Statistics Service. Cropland ranged from $287 per acre in Martin County down to $13 an acre in St. Louis County.

In general, rental rates have increased about $5 an acre per year in counties like Douglas and Otter Tail over the past three years.

Hulinsky does not anticipate increases in land rental rates in 2025 due to decreased demand for that land. He adds that demand is still there, as some producers look to generate as much revenue as they can to continue to make loan payments.

Much like rental rates vary from fenceline to fenceline, so do property values.

Hulinsky showed average data from the University of Minnesota鈥檚 Minnesota Land Economics for 2023.

鈥淭he last five years, especially, farmland values have increased, which does lead to some increase in land rental rates,鈥� he said.

(Contributed / USDA)

In central Minnesota鈥檚 Douglas County, land sales ranged from $7,300 to $2,100. In southern Minnesota鈥檚 Martin County, where land rent was highest, land sold for an average of $10,414 per acre. Olmsted County had the record per acre sale at $19,286.

Across the state, the average per-acre sale saw an increase from $6,745 per acre in 2022 to $7,433 in 2023. This data does not include sales between family members.

The big factor that鈥檚 taking a bite out of farmers鈥� bottom lines is the reduced crop prices in 2024 and looking into 2025. The higher commodity prices in recent years helped to increase land value in ag country.

Hulinsky offered an example of what producers in 2025 may be facing. Based on average yield, the price of corn, and anticipated income subtracted by the expenses, including rent, insurance, inputs and others, actual net income was $35 an acre in 2023. That compares to a 10-year average of $32 an acre.

But the 2025 projected net income is a loss of $114 an acre on corn, a loss of $60 an acre with soybeans, and a loss of $136 per acre growing wheat based on those estimates.

鈥淣ot super rosy in the farm economy,鈥� Hulinsky said.

In another example using Worthington, Minnesota, prices, average corn prices for 2023 were $5.64 per bushel, a drop from the record average of $7.10 a bushel in 2022. Average prices for soybeans in 2023 were $14.07 per bushel, down from the record average of $14.85 in 2022.

In central Minnesota, Hulinsky estimated corn prices of about $3.80 a bushel in 2025 and $9.50 per bushel for soybeans.

鈥淪omething has to give. Farmers can鈥檛 continually operate at a deficit,鈥� he said. 鈥淭hey need to generate revenue somewhere to offset that.鈥�

For market values, worksheets and other resources, visit the following websites:

• Agricultural business management:
• FINBIN data base:
• Minnesota Ag Statistical Service:
• Farmland sales:
• Lease examples:
• Fair Rent program:

Fair farm rental agreement workshops continue into December. Check out at the U of M Extension website.