How much to rent an acre?

Hello, growies!

My business partners and I are starting a small farm in north-metro Atlanta, and we have found a piece of land in a quiet suburb that is perfect for our operation. It's owned by a family friend who wants us to come up with a figure for him to charge us for rent, and we don't really know where to start. Anyone have advice on pricing the land? Here is some info about it...

We are building all structures on the property, before that the land is untended. There is a well on the property, and the owner is hiring someone to run water and install spigots around the property. The field is about 3 acres, but the property also contains several acres of woods and a house, which we will eventually be moving into (the house needs a lot of work, so for now we're just renting the field). When we move into the house, in several months, we will renegotiate the terms of the lease, but until then, if anyone can provide me with resources or advice on how to appropriately value the land itself, anything would be very much appreciated!

Thanks!

Around here, land is typically a burden to it's owners. Therefore, the true cost of land is that the landowner ends up paying someone to take care of it for them. And the owner pays the water bill, and property taxes.

So if you are considering paying any rent to a property owner, that seems like too much. My "rent" consists of vegetables from the garden for the land owners and extended family. And I typically mow the areas of the land that I'm not actively farming. (Wildfire mitigation.)

Here it is $18 an acre on average, but your best bet is to get a copy of the National Agricultural Statistics Service (NASS), which is part of the US Dept of Agriculture and tracks land rent per acre everywhere in the country, by county. You can look your county up on their website, or just call you local US Dept of Agriculture Farm Service Agency and they can get you the information.

It really changes a lot depending on where you live.

My soil in one particular field is listed as "Vital to the State of Maine Agriculture" and so I would get a high rate of $35, BUT that field is bigger than 25 acres, if it was smaller it would only net $25 per acre. Yet other fields on my farm with lower quality soil would get $15 an acre...so it is very spot specific. Land in the corn belt might force a farmer to pay a few thousand per acre.

BUT...keep receipts for any improvements you make. By law, any improvements a farmer makes, and the landowner kicks them off in the next 7 years, and the landowner has to pay them back, written contract or verbal. The reason for this is simple: it just is not fair to have a farmer install drain tile, improve the soil with compost, or make swales, then once the improvements are made, for the landowner to kick that farmer off and lease the land to another farmer (or farm the land themselves) for a higher rate. These laws are in every state that I know of, and in Canada, just because they are fair.

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See if you can find some farmers in the area that rent land and give you an estimate. It might be hard to get info from them about it but they'll know the going rates. If you ask large/conventional farmers, they'll probably name a price much higher than what you should pay because they often pay for large acreages for convenience. If there are any market gardeners that rent land, it might be worth asking them. I also second asking local extension, Farm Service Agency or even your local Soil Conservation District. At the very least, they should be able to point you in the right direction.

Rent prices are pretty competitive in my area, Eastern Shore Maryland because it is almost entirely agricultural with some housing development pressure from DC/Baltimore. Generally rent is $100-150 per acre but we have excellent soils, flat land, large acreages and lots of large conventional growers. Land is in demand here.

For what you're looking to do, I'd say it would be much less than our area.

Natasha Flue wrote:Generally rent is $100-150 per acre

I'm presuming that is per year?

Joseph Lofthouse wrote:

Natasha Flue wrote:Generally rent is $100-150 per acre

I'm presuming that is per year?

Yes.

Joseph Lofthouse wrote:

Natasha Flue wrote:Generally rent is $100-150 per acre

I'm presuming that is per year?

Holy mackerel. I'm astounded at the affordable rents in y'all's areas. Sometimes I think I ought to move somewhere cheaper...but then, it's so dang pretty where I am.

anyway, I love the OP's plan! Urban farming, woohoo!

Joseph Lofthouse wrote:

Natasha Flue wrote:Generally rent is $100-150 per acre

I'm presuming that is per year?

Rent is generally about $100 an acre per year here as well.

Growing wheat yields about 65 bushels per acre... At $4.23 per bushel that is gross income of $275 per acre. Land rents have to be much lower than that for a farmer to afford the equipment, the seed, the labor, and still get some profit. Other combine harvested crops are similar....

Around here, land is a burden to it's owners. They'll pay you to take care of it for them, and grow something useful.