Posted by paul on September 17, 2015 at 10:58:57 from (70.197.245.97):
In Reply to: Land lease question posted by ditchwitch on September 17, 2015 at 07:09:56:
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.
Upload one or more videos to your post. Photo filesizes should be less than 300K and Videos, less than 2MB. Formats allowed are gif, jpg, png, ogg, mp4, mov, and avi. Be sure to use filenames without spaces or special characters, and filetypes of 3 digits lower case.
We sell tractor parts! We have the parts you need to repair your tractor - the right parts. Our low prices and years of research make us your best choice when you need parts. Shop Online Today. [ About Us ]
Today's Featured Article - Harvestin Hay: The Early Years (Part 2) - by Pat Browning. The summer of 1950 was the start of a new era in farming for our family. I was thirteen, and Kathy (my oldest sister) was seven. At this age, I believed tractor farming was the only way, hot stuff -- and given a chance I probably would have used the tractor, Dad's first, a 1936 Model "A" John Deere, to go bring in the cows! And I think Dad was ready for some automation too. And so it was that we acquired a good, used J. I. Case, wire tie hay baler. In addition to a person to drive th
... [Read Article]
Latest Ad:
Sell 1958 Hi-Altitude Massey Fergerson tractor, original condition. three point hitch pto engine, Runs well, photos available upon request
[More Ads]
All Rights Reserved. Reproduction of any part of this website, including design and content, without written permission is strictly prohibited. Trade Marks and Trade Names contained and used in this Website are those of others, and are used in this Website in a descriptive sense to refer to the products of others. Use of this Web site constitutes acceptance of our User Agreement and Privacy Policy
TRADEMARK DISCLAIMER: Tradenames and Trademarks referred to within Yesterday's Tractor Co. products and within the Yesterday's Tractor Co. websites are the property of their respective trademark holders. None of these trademark holders are affiliated with Yesterday's Tractor Co., our products, or our website nor are we sponsored by them. John Deere and its logos are the registered trademarks of the John Deere Corporation. Agco, Agco Allis, White, Massey Ferguson and their logos are the registered trademarks of AGCO Corporation. Case, Case-IH, Farmall, International Harvester, New Holland and their logos are registered trademarks of CNH Global N.V.
