2003 Land Rental Guide for the Shenandoah Valley

Farm Business Management Update, April/May 2003

By Bill Whittle & Tom Stanley

During late fall 2002, Northwest District Farm Business Management Extension staff surveyed Shenandoah Valley farmers in 10 counties (Augusta, Bath, Clarke, Frederick, Highland, Page, Rockbridge, Rockingham, Shenandoah, and Warren) on land rental values. A total of 317 landowners and tenants representing 652 separate lease agreements responded to the survey. Respondents were split almost evenly between landlords and tenants with 51% landowners and 54% tenants. Several respondents indicated that they were both a landlord and a tenant.

This information is used by landowners, tenants, and agricultural lenders as a starting point for determining fair market rental value for land. Terms of leases vary greatly from contract to contract. Of those answering the survey, 33% said that their lease agreement was a written document while 67% said that their lease was oral. In many situations individuals had both oral and written lease agreements.

The tables summarize results of the 2003 survey. Since not all categories are applicable to all counties, only those counties for which data are available were included in the tables. They provide the average rental rate and length of lease based on land use as well as the range involved with lease rates and length of lease that has been negotiated.

Averages are reported by county and for the Shenandoah Valley. All averages are weighted averages; larger tracts of land rented at a given rate have more influence on the overall average rate than a small parcel of land. Rental rates are reported for the following categories: pasture per acre and pasture per head; good cropland (ability to average more than 100 bushels of corn equivalent in a typical year); average cropland (averages less than 100 bushels of corn equivalent in a typical year‹this category also includes hay land); whole farm leases and dairy farm leases.

The reliability of the average figures reported increases as the number of responses increases. Within a rental category the very high rental rates were generally for smaller parcels of land and the very low rental rates often had other circumstances involved such as the desire by landowner to maintain Use Value tax rate on the parcel or a family relationship between landowner and tenant.

This year we requested information on barter leases. Twenty-seven respondents noted that they were renting land on barter. They would have represented 7.8% of all replies if they had been incorporated in the survey results. Barter situations are complex and difficult to compile as an average and range because each barter is different. However, some broad similarities were determined. Most barter rentals involved hay and pasture, and the vast majority dealt with less than 30 acres. In most situations, the tenant had to keep the land mowed and cleared of heavy brush. In several instances, year-round caretaker responsibilities such as mowing the lawn and snow removal were involved.

Table 1

County	Pasture Per Acre
	# Farms	Average Length of Lease (Months)	Average Rate Per Acre Per Year ($)	Low Rate per Acre ($)	High Rate per Acre ($)
Augusta	92	19	20.20	10.00	50.00
Bath	4	23	16.92	5.00	25.00
Highland	19	14	14.23	4.29	45.00
Rockbridge	9	31	10.31	5.00	17.00
Rockingham	62	20	29.30	10.00	80.00
Clarke	13	19	19.88	6.00	40.00
Frederick	10	24	17.76	7.00	40.38
Page	22	13	16.22	1.33	40.00
Shenandoah	29	19	17.55	8.00	60.00
Warren	3	14	9.96	5.55	14.81
	Total			Actual Range
Valley Average	263	19	19.93	1.33	80.00

Table 2

County	Pasture per Head
	Cow-Calf
	# Farms	Average Length of Lease (Months)	Ave Cow/Calf Rate per Month ($)	Low Rate per Month ($)	High Rate per Month ($)
Augusta	7	8	8.29	5.00	10.00
Highland	9	9	6.39	5.00	17.00
Rockingham	5	10	6.76	1.66	10.00
		Stocker
	# Farms	Ave Length of Lease (Months)	Ave Stocker per Month ($)	Low Rate per Month ($)	High Rate per Month ($)
Augusta	11	9	6.34	2.00	13.00
Highland	3	8	5.73	5.00	6.20

Table 3

County	Good Crop Land*
	# Farms	Average Length of Lease (Months)	Average Rate pr Acre per Year ($)	Low Rate per Acre ($)	High Rate per Acre ($)
Augusta	45	26	41.57	12.00	100.00
Bath
Highland
Rockbridge
Rockingham	50	20	53.56	15.00	150.00
Clarke	5	34	21.35	15.00	50.00
Frederick	3	12	23.70	20.00	25.00
Page	6	12	38.95	25.00	45.00
Shenandoah	20	24	28.69	15.00	50.00
Warren
Valley Average	129	23	40.45	12.00	150.00

* In certain counties cropland was combined into one category, either Good Crop Land or Average Crop Land, because too few responses were received to differentiate between good and average cropland.

Table 4

County	Average Crop Land*
	# Farms	Average Length of Lease (Months)	Average Rate per Acre Per Year ($)	Low Rate per Acre ($)	High Rate per Acre ($)
Augusta	29	19	26.94	10.00	60.00
Bath	5	12	10.83	2.00	36.67
Highland
Rockbridge	5	22	23.51	10.00	35.00
Rockingham	32	18	41.63	17.50	80.00
Clarke
Frederick	7	12	23.59	15.00	25.00
Page	6	19	30.06	15.00	40.00
Shenandoah	16	21	26.15	11.00	45.00
Warren
Valley Average	100	18	27.08	2.00	80.00

* In certain counties cropland was combined into one category, either Good Crop Land or Average Crop Land, because too few responses were received to differentiate between good and average cropland

Table 5

County	Whole Farm*
	# Farms	Average Length of Lease (Months)	Average Rate per Acre Per Year ($)	Low Rate per Acre ($)	High Rate per Acre ($)
Augusta	41	26	23.70	5.13	100.00
Bath
Highland	4	12	7.94	5.00	22.73
Rockbridge
Rockingham	23	19	38.48	rate	98.48
Clarke
Frederick
Page	5	48	28.50	20.00	50.00
Shenandoah	13	22	16.05	5.75	30.00
Warren
Valley Average	86	24	24.74	5.00	100.00

* Whole farm leases often contain a mix of pasture, cropland, and wooded land. Structures such as barns or shelters and facilities such as corals are often included.

Table 6

Valley Dairy Farms*
# of Responses	Average Length of Lease (Months)	Average Rate per Farm per Year	Average Rate per Farm per Month	Low per Month	High per Month
10	47	$145.77	$2,011.67	$833.33	$4,800.00

* Dairy farm leases include milking facilities and some land. Residences are occasionally included.

Table 7

Inputs in Addition to Cash Rental Rates*
	Tenant Supplies	Landlord Supplies
Fertilizer	50%
Lime	33%	13%
Weed Control Labor & Material	44%
Herbicides		11%
Minor Repairs of Fence Coral & Building	62%
Fence Building Supplies		46%

* Other tenant-supplied inputs for pasture included bushogging or clipping. Other landowner-supplied inputs included electricity for livestock, water, and electric fence.

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