What Should Farmers Pay for Cash Rents

Gregory A. Ibendahl and Ronald A. Fleming

No 35127, 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama from Southern Agricultural Economics Association

Abstract: Determining what to pay for cash rental rates is a big problem for most farmers. Typically, crop budgets are used for this decision. However, problems arise from this approach because the average revenue contained in the budget is often not the true marginal revenue. Farm size differences certainly affect the average and thus the marginal revenue. This paper calculates the true marginal revenue per acre so that a better estimate can be made of the cash rental rate. Farm analysis data is used to calculate the total revenue per acre. The first derivative then gives the marginal revenue.

Keywords: Land; Economics/Use (search for similar items in EconPapers)
Pages: 14
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:ags:saeatm:35127

DOI: 10.22004/ag.econ.35127

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