Dakota Farmer

Hay Land Rent Rates Up

Average rate is $5 per acre higher this year.

June 9, 2014

2 Min Read

Cash rental rates for South Dakota non-irrigated hay land are up again this year, says Kim Dillivan, SDSU Extension crops business management specialist.

The 2014 average cash rental rate for South Dakota non-irrigated hay land was $84.40 per-acre; an increase of $5.10 per-acre or 6.4% from last year.

This percentage increase was smaller than reported increases from the past three years. For example, annual increases of 20.4%, 15.3%, and 10.9% were reported in 2013, 2012, and 2011, respectively.

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All South Dakota regions experienced increases in non-irrigated hay land average cash rental rates from 2009 to 2014, Dillivan says. Hay land average cash rents in the northwest region increased 39.6%, while hay land average cash rents in the north-central region had appreciation of 65.3%. The largest percentage increase in average cash rents during this period was 93.6% in the southeast region. The smallest percentage increase in average cash rents was 7.1% in the southwest region.

Although South Dakota alfalfa hay and other hay production are not concentrated in any one region, non-irrigated yields tend to be highest in the southeastern part of the state. Also, alfalfa hay is more common in eastern regions, while native grasses are more common in the central and western regions.

In much of South Dakota local prices received for alfalfa hay were elevated from July 2012 to June 2013 (> $200 per ton) and this appreciation likely contributed to increased hay land rents, particularly in regions with significant alfalfa production and on high-productivity ground, Dillivan says.

Like cropland, high-productivity hay land commands a price premium relative to low-productivity hay land. For example, 2014 cash rental rates in the north-central region varied from an average of $42.65 per-acre for low-productivity hay land to an average of $93.75 per-acre for high-productivity hay land. Similar rate variability occurred in the southeast region where low-productivity hay land averaged $107.40 per-acre and high-productivity hay land averaged $245.35 per-acre. Lowest rents for high-productivity hay land occurred in the northwest region where the average was $32.20 per-acre in 2014.

The 2014 estimates are based on survey data supplied in February and March by agricultural lenders, Farm Service Agency officials, rural appraisers, assessors, realtors, professional farm managers, and SDSU Extension field specialists. Land values and cash rental rates are reported only for privately owned land and should not be considered as estimated values for tribal, federal, or state owned lands.

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