Farmers and Land Rental agreements

[007sevens]

I know we got some farmers on here.

I wondering how you have your land rental agreements set up. I'm not interested in knowing your dollar amounts because frankly I feel its nobody's business but the tenants and landlords. Not interested in how many acres you farm. Just wondering if most are in cash agreements, crop share, etc, etc.

All my agreements a 1 year at a time. I currently have seven landlords, 3 on cash rental agreements, 3 on base plus 2.5% of gross, and one that I'm currently in meetings trying to convince them 1/3-2/3 share. Approx 60% of my total farm base is rented.

Whats your farm look like in comparison to mine?

 

[Shadam]

in sask most rental quarters are 60/40 where I was. good land is hard to get 1 guy just paid over $200,000 for a quarter.

 

[powder junkie]

We used to do 1/3-2/3 on family quarters, other than that one renter is is on 3yr contract at a time for X amount per acre paid every spring and another is verbal year-year paid per acre half spring half fall.

 

[snopro]

Cash rent in our area ranges from $40-$65/acre. There are not many 1/3-2/3 crop shares anymore unless the landlord is paying 1/3 of the inputs. Most are at 25%-75%. I've heard on some other types of sharing but don't know all the insides on how they work exactly.

 

[teeroy]

Cash rent in our area ranges from $40-$65/acre. There are not many 1/3-2/3 crop shares anymore unless the landlord is paying 1/3 of the inputs. Most are at 25%-75%. I've heard on some other types of sharing but don't know all the insides on how they work exactly.

I'm cash renting mine out, but not getting 40-65 bucks per acre. I think we did $35, paid in full every june 1st. we used to do a crop share deal, but it was too inconsistent.

 

[snopro]

I'm cash renting mine out, but not getting 40-65 bucks per acre. I think we did $35, paid in full every june 1st. we used to do a crop share deal, but it was too inconsistent.

There are area's to the north of us Tee that are as high as $90/acre but it is better land as well. I like the crop share because the landlord then assumes some of the risk if you have a failure but in all honesty $45-$60 would be better for me most years with grain prices the way they were a few weeks ago.

 

[Megrizzly]

We do all cash rent (25/75), so they ride the boat as well. A realistic land rent in the area should be in the $50 range for good land, but the "big" guys are in the $70's. We also don't have a limit on the rent. But over the past few years, it would have been cheaper for us to pay the highest cash rent out there. Right now, a good quarter of land would probably sell somewhere north of $250,000, but the commodity prices even when they were quite good didn't support it.

With a good farmer, i think that a crop share gets you the best return.

 

[Bounce]

A good producer will only pay what the operation can afford. There are many things that go into what a producer will pay, location to main operation, land quality, previous land practices, are only a few traits. Our operation currently employ's a base cash rent with bonus's/discounts based on the crop year. Our operation respect's the goals of the land owner however we value that respect back. Have passed on $100/acre rent land this year, hope you get paid with sub $10.00 canola this year!

 

[fredw]

do some 1/3 2/3, some 20/80 and some 35dollar cash rent... this last year the 20/80 deal was the best for the landlord, she has no exspencies and made 20 percent of the crop and her hail

other years 1/3 2/3 usually are better, and on dryer years the cash rent shines

 

[byronkentgraham]

Looking some of the values here and just blown away. Can't imagine renting out a quarter section of land for $40/acre. 40x160=$6,400.

Land around home is still in the range of $750,000 for a quarter section with a pivot and water rights.

 

[snopro]

Looking some of the values here and just blown away. Can't imagine renting out a quarter section of land for $40/acre. 40x160=$6,400.

Land around home is still in the range of $750,000 for a quarter section with a pivot and water rights.

I think everyone is talking dryland here.

 

[mathrulz]

Cash rent seems to be the simplest, and over the longer term, probably comes close to the same after a few good and a few poor crop years. Not sure if it applies for yourself, but cash rent does not equate to farming the land yourself for tax purposes. However, a properly structured crop share agreement can, and might be better in terms of yearly income tax and capital gains should you decide to sell the land someday.

Sounds like some pretty reasonable rates for land around! I can't touch cultivated #2-#3 soil for less than ~$70/acre around here. Lots has been going for close to $100/acre or more for a few years already. I would've thought further south would be higher yet!?! It's even tougher to purchase land - if you're lucky enough to hear there's some for sale, it's going for $3,000 plus per acre easily. I'm waiting for a few years of poor prices and interest rates to go up to see what happens to some of the bigger operations.

 

[007sevens]

Cash rent seems to be the simplest, and over the longer term, probably comes close to the same after a few good and a few poor crop years. Not sure if it applies for yourself, but cash rent does not equate to farming the land yourself for tax purposes. However, a properly structured crop share agreement can, and might be better in terms of yearly income tax and capital gains should you decide to sell the land someday.

Sounds like some pretty reasonable rates for land around! I can't touch cultivated #2-#3 soil for less than ~$70/acre around here. Lots has been going for close to $100/acre or more for a few years already. I would've thought further south would be higher yet!?! It's even tougher to purchase land - if you're lucky enough to hear there's some for sale, it's going for $3,000 plus per acre easily. I'm waiting for a few years of poor prices and interest rates to go up to see what happens to some of the bigger operations.

Location, Location, Location. Where are we talking about?

I've heard of these rates of $70-$100/ acre before. To me as a farmer I cant make a three year rotation work on a rate like that let along a four year. It leads to wheat, canola, wheat, canola rotation. At $100 dollars in my area where I cant grow longer seasonal crops such as corn or beans I cant make it work. I would need 160 bushel barley crops.

It bothers me when Landlords get confused as to what there land is worth. 3-4% of market value is where the land rent should be, Not based on what people are spending but on realistic land values.

 

[007sevens]

When you guys are running a 1/3-2/3 crop share the landlord is paying 1/3 expense. Right?

This what I have proposed.

I can see some guys settling on a percentage of total production but why should the tenet take all the risk and the landlord none.

 

[snopro]

When you guys are running a 1/3-2/3 crop share the landlord is paying 1/3 expense. Right?

This what I have proposed.

I can see some guys settling on a percentage of total production but why should the tenet take all the risk and the landlord none.

It used to be no expenses for the landlord forever. Now alot of guys say they are getting some expenses. That makes sense at 1/3-2/3 but its tough making a go of it with the landlord getting off scott free imo.

 

[mathrulz]

Location, Location, Location. Where are we talking about?

I've heard of these rates of $70-$100/ acre before. To me as a farmer I cant make a three year rotation work on a rate like that let along a four year. It leads to wheat, canola, wheat, canola rotation. At $100 dollars in my area where I cant grow longer seasonal crops such as corn or beans I cant make it work. I would need 160 bushel barley crops.

It bothers me when Landlords get confused as to what there land is worth. 3-4% of market value is where the land rent should be, Not based on what people are spending but on realistic land values.

This is in Westlock county, north of Edmonton. Landlords wanting 3 or 4 year rotations on canola still get 70-80 per acre, and many 2 year rotations are pushing or exceeding 100 per acre. This is 2.5 to 3.5% of market value for rental.

I'm not saying it's right; I'd definitely have a tough go as well if I was having to pay this. It's been a tough go trying to expand in the area over the past few years for sure.

 

[snopro]

This is in Westlock county, north of Edmonton. Landlords wanting 3 or 4 year rotations on canola still get 70-80 per acre, and many 2 year rotations are pushing or exceeding 100 per acre. This is 2.5 to 3.5% of market value for rental.

I'm not saying it's right; I'd definitely have a tough go as well if I was having to pay this. It's been a tough go trying to expand in the area over the past few years for sure.

We got the Hutts buying up everyuthing this way.

 

[mathrulz]

There's a few outfits around the area here that seem to pay pretty much anything just to say they farm more than the next guy. I sometimes think there should be a limit on the size of operations - make it more fair I think.

Look at trying to start out as a farmer - even a very modest 1,000 to 1,500 acres can set you in debt for $2-4 million say, plus a couple season's of operating expenses to start, and equipment costs. There's a lot of risk there for sure. There's definitely easier places to earn a good living for less work. Still enjoy the lifestyle though.

 

[007sevens]

There's a few outfits around the area here that seem to pay pretty much anything just to say they farm more than the next guy. I sometimes think there should be a limit on the size of operations - make it more fair I think.

No need for size limit on operations because rest assured one 60ft air seeder can only get so much done in one year. This is what keeps things in perspective. At the end of the day it all comes down to profit on one acre of land regardless of the amount farmed.

 

[007sevens]

Not sure what happened there. Quoted wrong post but whatever.

I think the days of new farmers are over. They only way your starting as a new farmer is to inherit it from your father in law. You and I and everybody else is making sure we have have talked to the nieghbour before the daughter is married.