Farm sale prices are determined by a number of factors, two of which are the productivity (yield) and the rental income. If a farm is able to produce more bushels of corn or beans compared to the farm down the road from it, it is worth more when it comes time to sell. The same can be said about the rental income from a farm. If your farmer pays you a more competitive rent compared to farms in the area, the farm is worth more in a sale.
Wisconsin Average Corn Yield for 2021
|8||Fond du Lac||Wisconsin||2021||Corn||108.75|
Wisconsin Average Cash Rent for 2021 – $138
Wisconsin reports solid and consistent cash rent year over year compared to other states in the Midwest. Although most tracts are smaller than other states, the land is productive and experiences consistent crops.
The average cash rent earned throughout the state in 2021 was $138 an acre. Below is a chart of the highest average cash rents by county.
The average cash rent of the top 10 cash rent earning counties in Wisconsin in 2021 was $186.80/acre.
2021 Non-Irrigated Cash Rent County Leaderboards
|State||County||2020 Avg. Cash Rent||2021 Avg. Cash Rent|
When landowners and farmers calculate cash rent, one common method is the Return on Investment (ROI) approach. In this method: Rent = Value of Land/Acre X ROI (~2.5% – 4%)
Here is an example of the ROI method:
Rent = $1,000,000/100 acre X 2.5%
Rent = $10,000 X 2.5% (0.025)
Rent = $250 per acre.
What this means: If land has traditionally been under-rented compared to its potential yield productivity (bushels per acre) it can lower the overall value (price per acre) of a farm in the event of a sale. This is why it is crucial to track cash rent and evaluate it compared to the productivity of the farm and track soil testing and nutrient application.
Wisconsin Average Soil Productivity (PI) – 47.70 NCCPI
For most, Wisconsin is known for its rolling hills full of dairies that produce some of the best cheeses in America. But Wisconsin also produces its own fair amount of corn and soybeans with some of the most fertile land in the Midwest.
In all states (except Illinois, Iowa, and Minnesota) soil productivity ratings are determined by the overall NCCPI (National Commodity Crop Productivity Index) developed by the NRCS (Natural Resources Conservation Service)
The average soil productivity in the top 10 most productive counties in Wisconsin is 64.6.
Here are the top 10 Counties by average soil in PI In Wisconsin:
|County||State||Crop Productivity Index|
Wisconsin Average Farm Sales – 2021 – $6,406.37/acre
As one might suspect, the counties with the highest average yields, cash rent, and soil productivity are usually the highest counties in the state for average sale prices for farmland*. All of these extremely important pieces of data about farmland go hand-in-hand.
The average sale price for the top 10 counties in Wisconsin in 2021 was $6,406.37/acre. Below is a chart showing the top 10 counties for average sale prices offor farms for sale in Wisconsin in 2021.
|County||Sold Year||Median Price per Acre||Total Acres|
*We’ve removed sales of residential and development property to the best of our ability to accurately portray the sale values of farmland throughout the state.
Farm Loans in Wisconsin
With all of this data about yield, cash rent, soil, and sale prices, the next step in one’s journey in farmland ownership and investment is, “how do I pay for it if it is such a valuable asset?” Farm mortgages are very common when investing in farmland or expanding your operation. Unlike home mortgages, farm mortgages typically require 25%-35% of the purchase price of the farm as a down payment. This can also be represented as a Loan-to-Value ratio. Now, if you already own farmland with equity, you are able to pledge farmland as collateral for the new farm purchase which can lower the amount required for a down payment.
If you are ready to purchase your next farm you can explore our farm mortgage rates here and get a decision in 15 minutes without ever having to go to the bank and fill out pages upon pages of paperwork for an approval.
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