land rent options

Nick m · Nov 12, 2013

I'm looking for more land to rent and finally got a
bite. I went and looked at the land, crunched some
numbers, and figured out what I could pay based on
this years market and break even, figured that would
be a good thing to figure out then go from there.
What is bad, is you don't really know what the land is
capable of producing, don't have a crystal ball that
tells me next year crop or fertilizer priced, etc. So,
my question here is.... has anyone explored any
other rent options? Flexible rent interested me.
Share cropping maybe? What have you guys done
that works out for both parties?

NY 986 · Nov 12, 2013

If you are lucky the landlord will agree to a deal where there is some sharing of risk and reward. A rebate if yields or prices fail to meet expectations and a bonus if things exceed expectation. Flexible rent is done but sometimes there are additional terms in terms of all rent due up front, fertility clauses, and insurance on the farm operation to cover liability.
Nearly all landlords here seem to want top dollar with no compromise for a bad crop year or market decline. I suspect a fair number take a hefty part of the rent under the table so it is near impossible to tell how competitive a rent offer is until it is too late.

mjbrown · Nov 12, 2013

The problem here in NY is the taxes even at the ag valuation is equal to the going rental rate. No wiggle room for anybody.

Tom Bond · Nov 12, 2013

I bought some acreage a few years back mainly for the investment and my own place to hunt. Not big by any means, only 80 acres, 1/2 that tillable. A local farmer and I made a crop share deal that I felt worked good both of us. 60/40 Him getting the 60, me the 40 of the yield. I paid for the lime a couple years back and we split the chemicals the same way, 60/40. He buys all the seed and does the work, I collect a few bucks being the owner. Last year we got hurt [b:a864496b6a]bad[/b:a864496b6a] with the drought, 4 bpa corn, this year we did pretty good with the beans. I'm not complaining. I've got a great place to hunt with a few $$$ coming in and one of the local guys is making a few $$$ too.
The other 40 is in a tree program with the state. Seems to work.
What do you guys think? Fair for both?

JWalker · Nov 12, 2013

First take a soil sample. That will tell you if land has been taken care of. Then be open and honest with expectations on both sides. Put everything in writing, then do a little extra. Word will spread and you will have plenty to work.

NY 986 · Nov 12, 2013

I would say locally the rental rate in general is considerably above the taxes. I am sure it varies depending where one is located in NY. Where the big dairies are duking it out they are paying phenomenal prices for land that is not all that productive. The added burden of the tax assessor being up to the year on land values will come back to haunt them when the inevitable profit squeeze comes. As has been said farmers respond to good prices by raising production to the point where profit per acre or cow drops back to near zero. Even with the yogurt boom dairies will add cows till the point where milk is extremely abundant.

land rent options

Nick m

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NY 986

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mjbrown

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Tom Bond

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JWalker

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NY 986

Well-known Member

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