Louisiana farmers are benefiting from high crop prices, but the prices also drive up the rent for land, according to LSU Agricultural Center Economist Kurt Guidry.
Farmers in some areas of the state are seeing dramatic increases in land rents, which could hurt their bottom lines and affect planting decisions, Guidry said in a news release. Landlords see high commodity prices and think the rents should increase.
But Guidry said farmers have seen steep increases in fuel, fertilizer and seed prices.
“Even though commodity prices have increased and gross revenue has increased, it’s costing a lot more to get to that gross revenue. So, from a producer’s standpoint, basing it on gross revenue could lead to financial difficulties for that producer,” Guidry said.
What a landowner may charge in rent can vary widely. Guidry said local supply and demand for agricultural land in the area will be a driving force for what a producer has to pay and what a landowner will receive.
The economist said rent could account for 10 percent to 15 percent of a farmer’s total production costs --- or higher on more valuable land.