Land lease question

I have an elderly lady asking me about somebody wanting to lease her land which is only 20 arcres to plant soybeans. not all of that land is workable. i would say maybe 13 acres is workable. My question what would a fare price for her to get. And should there be a lease agreement or a verable agreement. If a lease what would the responsibilities of the man leasing be. Would it be like maintaining the land like brush hoggin , keeping it clean. not a dump site stuff like that.The man did mention to her about a percentage of the crop paid when sold but i have never heard of this.That to me dont sound like a good deal but then again i dont know.
Thanks for any replies on this because i dont know what a fare price would be.

In years past here in Central Ohio we did a lot of "share" cropping, we would furnish all materials, labor and equipment and give the land owner 1/4,, it kinda worked out for all at the time we took every thing to the mill and divided each ticket at the mill, so a third party made the division, on a good year or good price the land owner shared the good or the bad,, for 'icing' on the deal we would mow what we could around the farm. Now that we have our own grain system we cash rent near all the land, this way no one has to wonder about the division,, we still use the same perks on mowing what we can ..The quality of the land means a lot on the rent value, a large field works better, wet spots, who pays for tileing,,water ways take away tillable land,,fertility,,who pays for the lime..things like this should be spelled out in a simple way for all to understand,,and dependability of the renter,,it don't matter what they "say" they will pay you if they don't pay you. look at some of the farms that they now farm, and their home base farm, sloppy habits spill out onto the farms they rent..

here is a link to a cash rent agreement for the state of iowa. rent will depend on where the ground is and what its yield is. here in n cent illinois, typical cash rents are in the 250 to 400 dollar an acre range. what state are you in?
iowa cash lease

Most state universities publish the prices that other land goes for, no telling not knowing where and what comparable land goes for.

I am in North Carolina and the the ladies Land is in Stanly County

Sounds like normal crop share. Renter paying for all inputs gets 2/3 of income. Next is 50-50 share and Renter and land owner each paying half of seed and fertilizer or chemicals and each gets half the income. On either renter furnishes all labor and machinery. If baling done on the 50-50 share then each pays for half the twine but on land owner that is only on the twine, all labor hired or his own to renter. Now on share no mater if the 1/3-2/3 or 50-50 plan if the owner wants his share delievered to a different elevator then would devide by rows in landowners share forrowed by renters share and repeat, usually no of ros would be determined by sixe of machine, say 6 row machine and 1/3-2/3 share the renter would get the first 12 rows, owner the next 6, renter next 12 and keep repeating across field. If 50-50 then it would be every 6 rows changed. If land owner wants the delievery point a lot farther away then they may figure aditional to land owner for aditional cost for hauling. If land owner wants to store and has bin space and renter wants to sell then split bu rows and then the emptying of bin would fall to landowner. This method was being used way before cash rent was heard of. It came about because owner could no longer do field work but still wanted to raise some livestalk and still have the feed for that. Actually the most fair to both. And together they both decide what crop goes in what field.

I furnish everything and give 1/3 and I get 2/3. I rent some ground for alfalfa hay and I pay $150 cash rent for that.

Location, soil type, rainfall, drainage, and so many other factors determine the worth of crop land. Crop values, which have fallen dramatically the past 18 months, is of course a big part of it as well.

It would be nuts for anyone to give you a simple answer to your broad question!

There are 2 common ways to rent farmland.

Crop share, where the owner of the land gets 1/3 to 1/2 of the crop to do with as they please. On the cheaper vesrions the renter pays all the bills, on the 50-50 deals the land owner typically shares in the cost of fertilizer, weed control, etc. there are of course many different ways to figure it, different regions do it differently. This is not common around me, but much more common in southern parts of the USA I believe. The honest way is for the crop to be split and land owners portion to be put under their name at the elevator, for them to store or sell or do what they want with. For such a tiny field it may be more easy to just let the farmer sell it when he does and split the check then, but that allows more oppertunity for the farmer to chisel things if he is unknown.

Cash rent. The renter pays the owner so many dollars per acre of crop land, and can plant what they wish, and take all the risk of raising the crop. This can range from free to $420 an acre. All depends what crops are worth, and how good the field is where you are at. This is the normal way of renting land around here. After getting cheated back in the 80s with nonpayment, most cash rent deals these days here need payment in March for the coming year.....

Taking care of the extra land is not generally expected, tho it can certainly be part of the lease arrangement. As that costs some, it would generally reduce the payments or percentage a tad?

Often both sides are better off with a long term lease, written down, covering 3 years or so. Everyone can plan better, long term, and do better.

The difficulty right now is we have had a very big roller coster of grain prices the past 5 years, and we are currently going downhill into red ink in a big way. So it is difficult for farmers to plan ahead, or offer a good long term rent - we don't know where things are going! So the cash rent is hard to figure out. But landowner like it, they have little risk, just sit back and cash the check.

Crop share leases are fairer, as the land owner gets more crop on good years, less crop in poor; can market their grain how they want to for better prices if they can, and can shift income from one year to the next for tax purposes if they need to. But the land owner can suffer from a crop failure or lousy prices and have very uneven income, if they are needing the even income every year it can be tough.

Many many many folks work with just a handshake, but if this is someone unknown to the land owner,a written lease would be really really smart! There can be state laws (like Iowa does not allow you to cancel a lease after September 1st...) that affect you, and one needs to be careful the soil fertility is maintained, not mined out. And so on.

I am concerned that is a relatively small piece of ground, if it has trees around it it is worth a lot less, they suck out the water and nutirents for many rows around the edge. And I'm concerned the land owner is demanding soybeans be planted, farmers need to farm, do what rotates in best. Demanding owners tend to get less rent......

Government is a big player in farming these days, if this ground is covered/ enrolled in the farm program it can add or subtract $50-80 worth of value to the farmer farming it. That will affect its value in rent of course. There will be papers for the landowner to sign if it is.

Take this for what its worth, you asked a real big question, these are some random thoughts. There are 1000 different ways to do it, whatever both sides agree to is fine. I just mentioned the big outline of common issues.

Paul

On 13 irregular acres out of a 20, we might assume tree lined and or wet and dry spots in the field, it will be very difficult for either side to feel good about alternating rows..... There will be a few good rows, nothing square, and real bad rows around the outside but they will be longer going around stuff.....

I suspect they will be better off harvesting the field, and splitting the bu at the elevator out of the total.

You have a real good description of crop share on good squared bigger fields tho.

I run 5 acres of land on my sisters place, spilt into 2 fields, trees all around it. For free, I can't hardly make anything, driving 5 miles to it costs more than actually running the field cultivator or combine while there. Hard to do a good job on such small irregular plots when they aren't right outside your machine shed, too much wrapped up in travel time expenses.

Paul

That was good info Paul Thank you, She dont care what somebody plants. Here main thing is just enough to pay the taxes which are not much for farmland here and keep it bush hogged and neet thats all she really cares about. From what i have read and yall schooled me on. i told her if she would ask 100 dollars an acre and for the farmer to keep it bush hogged and neet like shes asking and the farmer keep it fertilized she should come out ok.
Thanks for yalls input on this

sounds like it hasent been farmed in years..... so no government payment and no inputs to ground.sitting there growing weeds, ground has to be built up with fert to get a crop by the farmer. he said beans, corn would be better first year after many years of weeds. beans require a better ph than corn to get a yeald......I would say 50.00 an acre to start with and soil sample to see where the ground stands

I would cash rent it with payment all due in advance of planting.Renter does nothing but farm the 13 acres.A percentage of the crop never works out,there's no way to verify anything.

You can look up reported cash rents using the National Agriculture Statistics Service "Quick Stats" service. According the Quick Stats, Stanly County cash rent for non-irrigated cropland runs around $70/acre.

For a small piece of property like that, a cash rent makes sense. The owner is guaranteed a fixed income to cover taxes and isn't subjected to any risk. Crop share can be more profitable for the landowner, but there's a fair amount of risk due to commodity prices and weather. And yes there should be a lease; you can find sample leases online.

She should NOT sign any lease which grants the renter "right of first refusal" in case she wants to sell the property.
NASS Quick Stats

Thank you Mark for that information. Man i tell ya yall guys are the stuff when someone needs a little help with something .Even a major question someones is here to help. Thanks again

Thats what i was kinda thinking to Ray. It just leaves the opportunity for someone to not be so honest when they sell it. I know theres alot of good folks out there that wouldnt do that but theres always that someone that will.

The property joins some of her kin folks that makes a bigger field. And from what i took from the conversation they are not getting along so good now after one of the kin folk passed away. I have never seen the property except i did look it up from a GIS site and saw the aerial veiw. she did mention that someone has been cutting hay off of it for sometime for that persons cows. But now someone else is interested in farming it. She ask me to help find some information so she would be knowledgeable about it when she talked to the guy. I told her i knew right where to go to ask a question like that. Of coarse YT. Theres so much knowledge on this site its unreal. Common sence knowledge is off the charts on here. Thanks again everyone