An interesting read ...

[furrowtickler]

Check out Agriculture.com , a thread in marketing by 'hobbyfarmer' - "it has already begun"
Goes along with a thread I had here a week or so ago.

[farmaholic]

Why don't the leaches that supply us with goods and services reduce their margins a little instead of only relying on the landlord to reduce his margins???

[furrowtickler]

The point here is farmers signing firm cash rents not based on production or market fluctuations causes a shit show when there is a significant drop in either or both.
If Cash rents were set up based on markets and production this would not be an issue. It's not hard to do , much like crop share - only in cash .
The problem is that greed and ego get in the way of common sense for both the farmer and landlord
As for your comment on inputs , that does happen - just got to be prepared to buy 6 months in advance or more . Not saying it's right or wrong but it is the way it is now.
Fert was 20% cheaper or more back in Oct. Seed for the most part was 15% cheaper . Were they still too much then ? , probably but 90% of the time our inputs are too much in relation to our net returns - sucks but true .

[charliep]

Merle Good had an interesting idea.

Crop insurance yield for your area. Not your individual coverage yield for farm but the general one for the area.

Times the crop insurance coverage price that year.

Times 25 percent (negogiable).

Average this calculation for the 3 or 4 crops you grow based on a likely crop rotation.

Viola - a cash rent that reflects market conditions and can be fit into a multim year rental agreement.

[MBgrower]

Problem with using crop insurance data. These bto wannbees always have the biggest yields, so why should the landowner want any less?

[Horse]

The trouble with renters is they want to base the rent on a poor crop and farm for the large one, now if they were willing to give a percentage we would all benifit on the good yrs and suffer a bit on the poor yrs.

[LEP]

I remember several years in the past like 2002,2003 and 2009 where we took a big hit and never once had an offer to lower or forgive some rent to buffer the pain. I never asked for it either.

I read an analysis of the latest agriculture boom that said 3/4 of the positive financial benefit has shown up in the appreciation of land. So don't feel too sorry for the old boys.

A couple of my land lords said that they are making more money renting the land out than they ever made farming it. Hard to feel to sorry for them.

[farmerboy]

Land is the most important 'Input" if your farming so why should the rent be reduced? Reduce some other input or get out and let somebody else farm it!

[farmaholic]

Like canola seed, chemicals, repairs, machinery costs(new)?

Fertilizer went up instead of down or stayed the same. Fuel went down but by the time most are ready to fill their tanks(with summer grade)or during spring rush delivery the price will have come up, it always does.

And where have grain prices gone? Don't pick the odd shining star out of the whole cosmos either. Inputs don't track crop commodity prices nearly close enough. No one wants to give up what they've gained.

I agree with farmboy, without the land the rest is useless...

[LEP]

So Farmerboy you are obviously a landlord. If you want to rent your land to the latest shooting star that is likely to flame out, fill your boots. Don't expect sympathy when you don't get paid.

Renting land is a business relationship just like every other facet of farming. Like I said our landlords have always been paid on time, even in years when I lost alot to drought or hail and had a large negative net. I never asked them to shoulder any of the burden.

I pay decent dollars in rent, but I refuse to go to all my landlords and increase rent mid contract, because some young wannabe is offering $75 or $100 an acre in rent. I don't farm land for no return just to say I am a three thousand acres bigger than last year.

By the way paying big rent and cutting back on other inputs is exactly a recipe for disaster. Seen it a hundred times.

[furrowtickler]

One way we have rented land that works very well for both parties is a cash/crop share split.

cash at 5% of assessment $80,000 = $25/ac in April
then either crop share or cash value based on crop produced by Nov 1 at 10%.
$300/ac = $30
$500/ac = $50
*note - just a base example.
On a poor year you might be out $35-40/ac , on a good year you may pay $75/ac or more.
This gives cash for land tax early and reduces overall risk or crop failure or market collapse.
The landlord assumes some risk as well but if the tenant performs well with crop production and marketing the numbers are good for both with far less risk to the farmer. This also forces the farmer to take care of the dirt and have it produce well or he will be gone.

I like working off true assessment - that is the actual productive number for the land - not on precieved market values - If landlords want "market value" then they should sell the dirt and cash out IMO.
There are lots of ways to skin this cat but if your balls are big enough to sign very high cash rents then you should not leave the landlord hanging because your head gets deflated when markets and or weather change the game, unless you are lucky to have a forgiving landlord.

[farmaholic]

furrow, your arrangement requires a lot of trust on the Landlords part. Not all Producers may give the landlord what he had coming to him in the second part of your formula. Trust is key...

Cash is the most straightforward but leaves the risk with Producer.

As you said many ways to skin that cat.

[furrowtickler]

Your right the trust must be there , time proves it's self in these arangements . With some landlords this would be a night mare , better off straight cash based on productive value, or just walk away.