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BTO question

K

Kyle in KY

Member
I"ve got a question I"d like to get some feedback concerning BTO"s in your area.
Recently my mother passed away leaving the home farm to us boys. A brother continues to farm the homestead as he has for years.
Anyway a BTO has come along and offered 400 per acre cash rent which is interesting but I"m not 100% confident with this BTO or very trusting of the offer.
I no longer live close to the homestead, the area I live, some of the BTO"s have a reputation of paying big bucks for cash rent. Along with that reputation, they are known to rape the land by not fertilizing properly, maintaining weed control, etc. Then at the end of the contract split, leaving a worthless piece of land that cost THOUSANDS to get the land back in shape.
What are the reputation of some of the BTO"s in your area? Or is this just a problem here?
"IF" we decide to rent, the contract will have to be bullet proof to hold them accountable ~ correct?
 
Let your brother continue to farm the place! Dont take it away from him.He will still be there after the BTFO is gone....
 
That is my choice, but I feel that one brother is seeing $dollar$ signs.

I just don"t trust the guy or offer!
 

Kyle, there are good and bad tenants. Just like renting a dwelling. If it's your decision you have to talk to the brother with the dollar signs in his eyes. You really don't want to have to go court over it.

If the BTO in question has a reputation then maybe this is one to stay away from. There are others out there. They may pay a little less but take better care of the land.

Rick
 
Sounds like you may need to hire a reputable farm management firm to keep the BTO in line and complying with your rules and any other requirements that could affect the value of the land down the road.
 
4 in all but only one farming the homestead and has for 30+ years.
I guess the one thing that chaps my backside is some of these operators are like buzzards. Days after the funeral the calls started coming, "Sorry about your loss but is the farm for sale?"
There has never been a solicitation for offers to rent, but one has come, which is high for the area. I've had experience with some BTO's, some good, some ~well not so trustworthy.
Just curious how some operate in your area and what is the best way to protect all involved.

Kyle
 
How would it make you feel if you had farmed the family farm for 30 years and some BTO tried to rent the farm away from you?? If your brother has done a good enough job for 30 years, I would vote to let the brother keep farming it. Deals that are too good to be true are too good to be true.
 
There are all kinds of shenanigans being pulled by the BTO's. The price per acres might sound good, but in the end he will only pay for tillable acres according to HIS measurements (which he adjusts to his favor).

Many of the tricks that they use have been discussed on this forum, so be very wary. The latest discussion I saw was pointing out that if they make the first half of the payment, they try to get out of paying the second half.

If the BTO isn't somebody you've known for a long time and trust, a quick "thanks for the offer, but we're not going to make any changes" will take care of the matter.

I hate it when somebody in the family tries to take the land away from the one who has been farming it for all those years. I also hate it when those who have not worked the farm are left equal shares in the land; just doesn't seem right to me.

A realtor called my stupid uncle the day after my Dad's funeral - and the uncle brought the offer to us right away. I told him to go home and keep his nose out of our business.

I managed Dad's estate and set it up for my younger brother to take over the farm and buy the land from Mom. He did well and is retired now.
 
I will speak from my firsthand experience with cash renting farmland in Colorado to what I would consider big time operators. In both cases they did an excellent job of taking care of the land using modern no-till "chemical fallow" farming practices, leaving it in better condition than my brother had previously left it. It was in their best interests to do so in order to maximize their yields. That's not to say they didn't try to shaft me in other ways. For example one got me to cut the rent in half the first year of the lease because the land would be fallow that year (standard practice with dryland on the High Plains), then proceeded to raise a crop knowing I lived out of state and might not find out.

Two recommendations:
Check them out with their other tenants.
Do NOT sign a lease granting them a right of first refusal if you choose to sell the land.
 
This is a hard question for me nothing i would like and still do is help small guys get started.i started renting to neighbors kid after he got started he was better than me his you know what didnt stink his dad covered but finnally ended up renting to his dad (dad lost over 5 farms) rented for 15 + years had to go get check he and neighbors decided how to run farm plowed waterways removed trees complained about everthing.so last year had an add put out one response was bto didnt think much at first but showed up with little kid riding shotgun gave soil samples check up front 20000 more first guy didnt like to pay much lots of problems he said all tillable good road access tama ground .so im renting to bto operator so far so good
 
It is getting real interesting watching the BTO getting bigger. At this one funeral visitation some BTO's were really hanging around close to the family. Never seen so much big machinery on such hilly ground as around here now. I bet this county has lost a fifth of its tree population in the last few years.
 

I know a guy who got a field back last year due to fungus. Too many years in corn. Rotation is something easily put in a contract and easily monitored.
 
A few days back JDSEller had a post about those rents. The way he figures it at those prices they will be loosing their shirts and when that happens then the landowner will also loose as the high priced renter will not be able to make the final rent payment and next year he thinks rents will be way down. He has the figures penciled out in his post and with the prices of crops there is no way that things will pencile out. I feel the same way as JDSeller does.
 
Here in Virginia I know of one BTO that went to war with NRCS over plowing thru waterways and other infractions. The spat lasted over a year. Went to court and the BTO won!!!
 
I figure that you can't put a value on having the farm run by the family. I guess if your brother is getting too old or hopefully you guys get along but if not then its one thing. But personally I'd figure in $10,000+ value in pride of having the farm continue to be farmed by family. One thing I always tell guys around here is that these guys offer this high rent because they think they can make more than $400. So if true then this profit should stay in the family. Also no matter how big of field equipment they have they can't trim tree rows or fix tile lines or care for the ground any faster than the old days so someone's farm could get neglected. If so its not going to be their own ground. And yes, at that high of rent they may feel that they don't need to add plow down fertilizer because you "owe" them since they paid so much. I've seen it here. If your Brother gets out then eventually sells his equipment there's no going back...
 
Follow your heart, it sounds like you know the deal is too good to be true and will not be in your best interest down the road. If I was your farming Brother's shoes I would ask this BTO politely to never speak of this again. He apparently doesn't think highly of your family to basically be telling your Brother that he is obsolete and that they are better. If I was you guys I would counter offer that your family can do it better and that you would cash rent the BTO's home ground as he is no better than your family. Dad's friend had the same thing and it burned him that they would have the nerve to basically ask him to "quit" farming, of course he said no.
 
Well see how strong the $400 offer is by telling him the $$$ has to be up front before he comes onto the property.One brother shouldn't be getting the full benefit of the property while the rest of you get nothing.
 
Like I asked a guy just the other day when he said the same thing,why would somebody pay that much for rent and not take care of the land in a way that would produce an optimal crop?
 
One of my customers has been renting to a BTO for close to 20 years. It's a good business relationship.
My sis rented to a BTO and didn't have any problems either.

Like in any profession it doesn't matter whether the person is big time or a small operator for them to be trustworthy or a shyster.
I say check the guy out. If his other landlords are happy then his offer is legit. That doesn't mean you have to rent to him.
How does what your brother pay compare? I'm not saying your brother should pay the high end of the market for rent, but he shouldn't necessarily be paying well below the market either.
You're walking a thin line, you don't want to cause a family riff, but at the same time you and your brothers are business partners and need to make sound business decisions.
 
The individual guy and his reputation is far more important than all BTOs as a group. If you don't trust him there is at least one reason why, maybe a whole lot of reasons. Those guys got to be big either with sharp pencils or crooked pencils, sometimes both. Make sure your written contract covers all of your worries. If he won't sign it, tell him to take a hike. There are about 4 BTOs in this area. Some I would deal with, and one would get chased off my property.
 
I'd sit down with current renter and tell him about the offer. maybe have some current figures available on what he is paying. tell him you'd rather rent to him and ask him what his thoughts are. don't say a word about raising the rent or anything to cause him to be upset. Tell him you think enuff of him to keep him in the loop. then give him sometime to think it over. at least one crop year. maybe even mention that you'd like to have a yearly meeting. BTO's can be good or bad, lumping them into one category isn't fair. same way with small time renters or relatives. every case is different.
 
(quoted from post at 04:47:43 04/10/14) Well see how strong the $400 offer is by telling him the $$$ has to be up front before he comes onto the property.One brother shouldn't be getting the full benefit of the property while the rest of you get nothing.
Click to expand...
And why not? I ran into this attitude with the family I bought my place from, and it baffles me. They all thought that they should get equal rights and income from the homestead that one brother had farmed with his sweat and tears for 30 years. A farm can only be farmed by one person at a time, and so far as I am concerned the affairs of a farm should only concern the farmer. Why leave farmland to those who don't farm it? I guess my take on the original post would be that it would be pretty low to rent it out from under the brother if he still wanted to farm.
 
This is coming out of left field, but everyone's use of the "BTO" term kinda gives an icky feeling to the whole thing. Just has a negative ring to it. I've always seen it as a derogatory term towards larger farmers. A farmer is a farmer whether he has 16,000 sq. ft. acres of vegetables or 25,000 of row crops. Why must we use a label? Makes a person subconsciously lean negatively. There are plenty of farmers that don't do a very good job with their land, but the big guys who don't do a very good job get all the bad press 'cause they're a likely target. Maybe I'm biased because I've been involved with and worked for operations that do a damn good job farming because taking care of the land is in their best interest because it makes the most money possible. Yes, I'm sorry, it IS about making money. Just saying there are poor examples all along the spectrum of farm size. Don't lump the large farms together as hotshots or rapists, aka BTO's. Email's open if you wanna unload on me. To the original poster, I hope your family can come to a happy agreement, and good luck!
 
A few thoughts. What does your farming brother have in the place as far as investment? How many hours has he put in to help your parents while the other siblings were not around? What kind of promises were made by your parents to him that you may not be aware off. How many messes has the brother bailed your parents out of. How many repairs has your brother covered due to negligence by the parents? Dad takes care of stuff good when he is footing the bill but gets reckless with machinery because he is trying to recapture his youth in his last years costing the brother money.
My apologies for the bluntness above but these are things I have seen with farming families when one child stays home and the others leave and do not maintain extensive contact over the years. What I am saying the brother may have more than paid his dues in terms of not being asked to pay top dollar for rent. A frank conversation even if painful may be in order if you really want to pursue negotiating with the BTO.
Lastly, I would protect myself well if I were you if you go ahead with the BTO and that means a large portion of the rent up front and a firm due date for the rest shortly after harvest. Fertility needs to be maintained which means fertilizer applied on a level to get maximum expected production. Conservation plan for the farm is maintained along with gates put back in place if removed plus damaged tile drains by the BTO get repaired.
 
Assuming the brother wants to stop farming it, I would be very wary of renting to anyone, BTO or otherwise, unless I was on the property at least twice a week, preferably more. I was truly annoyed at my retired neighbor last year when he let his tenant cut down and remove all of the tree lines on his property, leaving my woodlot open to unchecked winds blowing from the SW. Place looked like he!! too. I was annoyed until I found out my neighbor had gone south for a few weeks and only came back in time to save the last tree standing on the property. He trusted the tenant to care for the land and paid a dear price for it. This tenant farmer does not sign contracts with most of his landowners. Fortunately he was under NO illusions as to what would happen if he brought his dozer across the lot line. Be really careful. Absentee landlords get vicitimized all the time.
 
Man, it"s all about the money! Get it while you can. These prices won"t be around for much longer. You can build the land up later. God made land to use and farmers to farm it! $400 per acre? Wow!
 
I think he's saying he tried renting to a younger fella that didnt go well because the kid had BTO view of things, it defaulted back to the kids dad for a while but that didnt go well as the same thing.

Now he is renting to a big farmer and it is working well, because the big operation doesn't have BTO disease.

Paul
 
Sounds like you will be renting, not 'if'.

Tough when family is involved, most of us farmers will take the side of the son who is or wants to rent it, lot of us been there and got treated a bit poorly by the siblings that lived far away and thought they deserved to run things from far away and know so much about how farming should be done but never had time to stay home an event to pick a single rock.....

But happens enough the one on the farm tries to take advantage too so it cuts both ways.

Either way too bad to see families fall apart, which is what you are saying. What would your folks have wanted?

Anyhow, BTO is more a state of mind, it can be a small operation but it is the guy who just needs to chase bigger, bigger, bigger, and will always leverage himself into a situation that will fail eventually, its just programmed into them with attitude to walk over others, take advantage, and take risks that will never pay off but will leave others holding the bill.

Many big operations are not BTO, as they are a few family members working together and getting bigger but do it right, and do it well. They can be bigger than a BTO.

The hard part is sorting out one from the other.

If you are a sibling living far away and not getting along with your sibling on the farm, its a real good chance you won't be able to tell the difference and you will pick the wrong one. All you know about farming is I want more money per acre, and that is exactly the type of person the BTO is looking for, they can snowball you pretty easily.

Yea, I'm doing a lot of judging and supposing here. I can sure be wrong, but see it a lot of times, if you don't fit the mold then good for you.

Paul
 
It would be simplest and fairest if the "farming brother" can buy out the other brothers. Is that an option at todays land prices? If not, then adjust the rent to match average prices for your area?
 
I could not read FwM's reply either. He has good ideas, but the lack of capital letters, pharagraphs and punctuation make it very tough to comprehend some messages. Cell phones with key pads instead of keyboards can be very slow and difficult to type on.
 
I think the BTO term comes in to signify a greedy big farmer. There are good big family farms and people come to them and offer ground for rent. There are big farms on the other hand that go out and overly aggressively seek ground. I think it is important to remember the rules of being a good neighbor. Not asking to rent ground that is currently being farmed unless the landowner comes to you. If the owner of the land seeks you out then it is fair game. If someone is retiring then it is open for all local parties to inquire. And along with that rule if someone is farming their family's farm I feel it is rude to approach them about "quitting". I'd go with my Brother but Your's may be a different situation.
 
My view is that with today's commodity prices... at 400/ac there's probably not much/any money to be made on that ground. I would hazard to guess that someone, somewhere, will make up that shortfall. That will more likely be the land owners than the tenant... I do not believe that the question really has anything to do with whether the tenant is a BTO or a STO. Money is money and when there isn't enough to go around, someone will lose.
I would have a strong inclination to see your brother continue to farm the land vs renting it out to someone else. I wouldn't doubt he's more than paid his dues if he's been looking after his family's ground for 30 years....

Rod
 
Afternoon! I used the term BTO because I'm too lazy to type out all the letters. Whether you farm 5000 or 25000 acres, your a BTO in my view since you farm way more than I could ~ No offense to anyone intended!

There are some big operations and family run operations in the area 5-10k acres and bigger, that are doing just fine. Speaking with some of them on overall rental prices, appears the average for the area and soil type is in the low to mid 200 range. Few to very few in the northern counties with better soils are getting 285-310 per acre. None admitted to paying or would pay those kind of prices. This is why I'm skeptical.

My share portions, as with my brothers are extremely low since the farming brother assumes all the risks, equipment expenses, etc. I do and would help more if I could and was a little closer. The terms agreed to and documentated should remain with the farming brother. Don't get me wrong, money is nice but it is not worth the hassle it creates! As a tale I've heard many times goes, "money is the root of all evil".

Time and patience will tell! I appreciate all your views and thanks for the time you took to respond. Much appreciated!
 
Thanks i was trying to get to work and yes i have a cell phone not much on schooling just know how to work and pay bills.but i think that would be the best way to put it love to put a little guy just starting up on the farm but if they have no respect for you or your values then its not about the dollars.if the bto operator respects you and the little guy doesnt its not an easy choice for me but maybe someday bto has son ready to take over .
 
The numbers you say are real close to what I hear at the coffee shop for my area too. I don't rent land either way so I don't really know.

Myself I would stick with a more local fella that takes good care of his own ground, has a pretty good reputation in the local community, and ride an average rent with him. They tend to be around a long time, work conservatively, support the local ecconomy, and treat your land as their own land, in it for the long haul.income and stability for you.

Chasing the biggest rent kinda gets you a reputation as a land owner too, and over time you will get bit by someone with bad checks or mining the land as you say. Only has to happen once to erase all the 'big money' you can make from the high rent offers.

If you have been working on a share rent, then you shoulda been making a killing on your shares the past 5-6 years, that is typically the highest rent right now. Unless the land flooded or drought wiped out then you should have insurance on your portion to cover some income. With the high grain prices, this is the time to be a land owner renting on shares..... If it hasn't been working well for you, perhaps something is not right with your agreement.

Paul
 
So you don't think the owners of property deserve anything for it? He may have farmed it for whatever years but the OWNERSHIP has now changed.Using the land doesn't give any special rights if anything he's gotten a free ride for all those years so now he's going to have to pony up some $$$ to keep using the land.
 
Why not? For starters their mom left the farm to her four sons. They are each part owner of the land, basically business partners in the land rental business.
Not the farming business.

Why leave the farm to those that don't farm? We can only speculate on the reasons. Most likely it was the fairest way to settle her estate. Look at it like this, why should the others get nothing just because they are in a different profession? It sounds like the mom's assets were the ground, not the farming operation. How do we know the farming brother wasn't taken care of separately? Again, we can only speculate, but it's entirely possible he got the assets or at least special consideration to purchase the assets of the farming operation when the father retired or passed.

Should the brother that farms the ground be entitled to special consideration? Maybe, but the OP didn't give enough info to make a judgment on that.
As far as I'm concerned the brother should pay whatever the local market is, less whatever the other three brothers agree to discount.
 
Easiest and fairest way would be to cash rent to the brother who is farming it unless he wants out. I think I understand there are 4 owners, the farming brother should pay each of the owners 1/4 of the cash rent, of course he wouldn't pay himself, all owners remit to the farming brother as the manager of the estate money for taxes and insurance. All owners should get together and discuss the expectations of any renter and hold the brother to it (maintenance, fertilizer, erosion control, cropping practices and rotation). This is not meant to put the farming brother on a short leash but to establish what the other owners expect and put them on a leash. The goal is to set expectations that all owners hold each other to and to stop owners who may be far away from sticking their noses into something they shouldn't. The one who is farming may be at more risk but should get two rewards, if he does well he will make more AND he has some protection from siblings making his business life more difficult than it should be. If /when the brother wants out all the owners have established business procedures to rent the land. This makes the assumption the farming brother already owns the equipment also giving him the freedom to take on other land or upgrade equipment without his sibling's input.
 
I agree. But, unless you know all the ins and outs of what's going on, hiring someone who DOES MAY not cost as much as you think.

If this farm has ANY participation with the federal farm program, the new farm bill binds the decisions made by the landlord and renter to a period of at least 5 years, and in some cases TEN years.

Unless the owners are 100% "up" on all that, expert advice MAY pay over time.
 
Something sounds fishy. This proposed renter is offering nearly double the going rate. It sounds to me like he is going to rape, pillage and plunder in order to get a decent return on his investment.

If this offer had not come along, would you and your brothers be happy with the current arrangement? If it ain't broke, don't fix it. Then again, I understand that sometimes you don't know it's broke until you look under the hood.

Mom and her 2 sisters inherited a good sized chunk of Ozark farm land that had been in the family since 1856. Because they couldn't agree on the best way to settle it, the farm was sold and started to become a housing development.
 
After reading all of the posts and complaints about
BTO"s, I think the definition would be anyone larger than you.
 
Please explain how someone could rape, pillage and plunder his way to a decent return on investment.
 
Around here most all the 'BTO's do a good job of taking care of a farm. Most of the time they will clean a place for a three year lease. As for the 'can't be making money' argument most all the 24 row planters you see here come from the next county over. They will pay more to lease ground in a new county than they will for better ground out their back door. Just saying.
 
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