How do cash rents on dryland that is left fallow work?

dmiller · Apr 17, 2014

Not much of the dryland around here is continuously cropped. In fact I know of only one guy that does it and I think he's not getting much, more of a program farmer than crop farmer.

I thought the way to do this might be to estimate the net profit as if there was no land cost and then split that profit 1/3 2/3 with the landowner. For example if the ground can make $60 in wheat then the cash rent would be $20. but that's on the year it is cropped. There should still be a rent on the fallow year but what?
Just for info. on those of you that say these are unrealistic numbers. County ave. is 30bu. per acre on dryland and 10 acres a month per cow calf pair. Had info from the county agent for 2008,09 and the county ave at the time was $19 per acre on dryland.

John A. · Apr 17, 2014

dmiller, In the High plains where Summer Fallow is the Norm. My trade with the Estate that own the parcel I farmed was....
1/3-2/3 and I received 2 Bindweed spraying ? yr. No question, My Call. I did all farming, fought sand, mowed ditches, furnished seed, NH3 fertlizer and grazed the wheat when It was applicable.
Estate Got 1/3 of crop make, No expenses! except for Bindweed spraying!
My dryland wheat never made below 25bu was as high as 48bu one yr. Hope this helps.
Later,
John A.

dmiller · Apr 17, 2014

Shares are normal and easy to figure, on the fallow year they get nothing. I think I have more opportunity talking landowners into a cash rent but am not sure how to price it so they get a payment each year but I spread the cost over both years. Simple halves make it so small I'm not sure landowners would be interested.
Option 1: 30 dollars crop year, 0 fallow year
Option 2: 15 dollars both years.

John A. · Apr 17, 2014

dmiller, The below post is an example of a 1/3,2/3 Dry-land with No cash exchange between Lessee and Lessor.
Later,
John A.

dmiller · Apr 17, 2014

John,
Thanks for the input, but I want to know about the cash exchange. Shares are easy to figure and work with. However most people that own land anymore (at least around here) don"t know or care much about agriculture. They want an income from the land and don"t want to mess with taking a share of the crop. They have no way to store it, haul it, sell it. If I can talk cash with them they are more interested.

How do cash rents on dryland that is left fallow work?

dmiller

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John A.

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