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Society members also said they expect land values to rise by 3.25 percent in the next 12 months.
The average market value of an acre of land expected to yield 150 bushels of corn stands at $2,638. Annual cash rent for the same acre is $140, on average, which represents a cash rent increase of $10 compared to this time last year.
As a percentage of land value, cash rent has fallen slightly in the past two years. Agricultural economist J.H. Atkinson of Purdue University said the $140 cash rent estimate is 5.3 percent of the current land value, down from 5.8 percent last year and 6 percent in 1995.
"After allowing for land taxes and management, the net cash-rent return to the landowner is not much more than 4.5 percent," Atkinson said. "Investors in land accept a relatively low current return because they expect future increases in land values." He added that profit margins were even smaller for rural landowners in the late 1970s and early '80s.
Members of the Indiana group manage farms for landowners, appraise farm real estate, buy and sell farmland, and provide management and investment consultation.
CONTACT: Atkinson, (765) 494-4266, e-mail: atkinson@agecon.purdue.edu
Purdue News Service: (765) 494-2096; e-mail, purduenews@purdue.edu