Choice among leasing contracts in farm real estate

Abstract

The leasing market for Midwestern farmland is experiencing greater reliance on cash versus share leases and increased competition for leased acreage. This study identifies significant factors associated with the use of cash leases relative to share leases, and with the associated levels of cash rent. A greater likelihood of cash leases is significantly related to higher income variability, lower soil quality, smaller tracts of leased acreage, shorter relationships with landlords, and to farmers with larger net worths and higher debt‐to‐asset ratios. Levels of cash rent are associated primarily with differences in soil productivity, tract size, and net worth.

Citation

Sotomayor, N.L., Ellinger, P.N. and Barry, P.J. (2000), "Choice among leasing contracts in farm real estate", Agricultural Finance Review, Vol. 60 No. 1, pp. 71-83. https://doi.org/10.1108/00214700080001111