Date of Graduation

5-2026

Document Type

Thesis

Degree Name

Master of Science in Agricultural Economics (MS)

Degree Level

Graduate

Department

Agricultural Economics and Agribusiness

Advisor/Mentor

Anderson, Andrew

Committee Member

Mckenzie, Andrew

Second Committee Member

Connor, Lawson

Keywords

Cash Rents; Land Value; Sticky Prices

Abstract

Land is an essential resource in production agriculture. Limited supply and high demand for land have resulted in increasing land values which are a barrier to entry for beginning farmers and ranchers with limited access to capital and credit. One way to overcome the high costs of purchasing land is to lease it. While more affordable than purchasing land, cash rents are also increasing. The objective of this research is to determine whether agricultural cash rents follow farm income symmetrically over time. This is accomplished by implementing Ordinary Least Squares (OLS) regressions with two-way fixed effects which account for rental rate variations attributed to the year and county differences. County level cash rental rates are regressed on changes in farm earnings per acre before and after receiving indemnity payments. We expect to see evidence of downward stickiness in rental rates when looking at cash rent before indemnity payments, as without these payments farm income is more volatile, and landlords may be slow to lower rents during periods of income decline. When indemnity payments are taken into consideration, symmetry is expected as these programs help stabilize farm income by offsetting large downward income shocks. We would expect this stability to work its way into land values and rental rates. However, results indicate that the market reacts symmetrically in both the pre- and post-indemnity cases, indicating that rental markets are functioning efficiently. To explore the possibility of attenuation bias, additional models using corn and soybean revenues at both the state and county level were implemented.

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