$75 to $125. An acre rent, explain how you make a profit in Saskatchewan!

[hobbyfrmr]

Free wheat,

Take on more land to bring down fixed costs of
new machinery. Then you can operate new
equipment with warrantee. Also to maximize
efficiency. A really good high clearance sprayer
can cover 1200 acres a day. Blah blah blah.
I half understand it, it kind of makes sense, but I
literally don't buy into it. Why? Not enough money.
Failure to thrive!! The business world expects
growth. Grow or die! This philosophy cannot be
exactly replicated in ag, like sf3 suggests, Mother
Nature dictates.
John Deere, CNH, landlords and our input
suppliers don't care if farmers don't get a crop.
They only care when they dont get paid for the
product we contractually agreed to buy. We agree
to buy, we sign our names and we pay. If we
don't, another farmer will. The same marketing
skills are applied to real people, gm, ford, Walmart
, landlords don't care if the working man gets laid
off. The risk lies in how much debt we can
tolerate and plan for when it goes right, or wrong.

[charliep]

Lots of work has been done on the size versus profitability issue. Conclusion of most is size doesn't matter. Its what you do with what you have that does.

MNP studies done for ARD highlighted that operating costs/acre were very similar between different farms of all sizes. The variation was in fixed investments in land and machinery was the difference between farm operations looking at efficiency from a return on investment perspective.

[charliep]

A quote from emalt that somewhat relates to this thread.

Quote - "Destiny is not a matter of chance, but of choice. Not something to wish for, but to attain."
William Jennings Bryan

An interesting discussion about how a farm business positions itself for the future and its goals/strategic direction.

[oneoff]

Be careful how badly you beat up landlords.

Maybe a good way of looking at what you want to pay as a tenant would be to be forthcoming in exactly what YOU would be satisfied to rent your landbase to expanding farmers.

If those two figures aren't nearly the same; then all that differs is somone's level of selfishness.

[charliep]

What is interesting to me is there are not more hybrid rental agreements that are combination of cash/crop share. Some are based on a crop yield or combination of crop yields that can be based on crop insurance coverage levels and an agreed way of determining price in the fall.

The big thing is to come up with a process that is fair for both the landlord/renter and allows some sharing of risk.

[HappyFarmer]

Farmaholic
I couldn't agree with you more.
I remember in 04' and 05 guys lots of guys were renting the land by just paying the taxes, and we have 125/acre rent 7 year later? Crazy.
As a younger farmer, I am looking at maximizing every acre that i farm today with expansion on the backburner. Its easy to get greedy after the last 4 or 5 years and want more, more, more. But for the better of the long haul, save your cash, pay off the debt you have, and when the time comes, jump at the lant that will be half the value it is today. Those day will come, but in time.

I will always remember the stories im told about the guys who farmed in the late 80's with high interest rates, low prices and poor crops. You need to talk to guys like that to scare the shit out of you a little bit and put you in your place once in a while. Im sure may of you have been through that and have a lot of respect for you. It must have been terrible. Maybe the guys paying 125 for rent or 2800/acre for land should listen to those stories.

[Hopperbin]

Charlie, no one would rent shop space based on earned income of the renter or vise versa. Why should it happen in farming? As a cash renter I don't like to have to separate someone els's grain from my farms. As for myself farming for 30 years or more i pretty much have an idea of the risks. Also crop share could involve a doubling of rent paid in one year and nothing in the next as grain may be held to the new year, not so good for the person renting the land out better for tax reasons to have a steady income. Sometimes I wonder if these guys paying these high rents just want to avoid paying income tax. Perhaps they made their money farming perhaps from some other venture and are looking at not paying tax. In that event I think those guys are wrong for themselves, like its said many times producing the best possible crop is not as good as producing that crop that earns net income and taxed. In my opinion . Could have something to do with all this high rent.

[TOM4CWB]

Dear Charlie,

A Hybred rental involves much trust and paper work.

If a grain farmer is looking out for the long term viability of the farm operation... bonus payments are a great option to meet in the middle.

It all comes back to relationship and trust.

Cheers

[farmaholic]

Good point Tom. Trust is key.

Hopper: I like your shop rent comparison
too.

[fjlip]

SeaBass 1/4 share no expenses other than good bins,some hoppers and aerated to store all production, is common in our area. How does that sound?
I too would love to see the math on any of the above rents.
Even more on several new combines, tractors and sprayers every year.
All of the economy is well oiled by expanding farms risking all for....?
You are right Freewheat, every publication highlights huge farms. Lets all get into that and borrow, spend, risk and stress out with no life.
People need to get priorities figured out,life is short, enjoy, not just work.

[tstep]

It is reported that 8 quarters has rented in our area for 70--30 crop share with no inputs. Hows that for a good deal for the landlord..

[Hired-help]

Lewvan 2012 will pay your kids child tax refunds.
Maybe the guy paying 27 mil for it should be
questioned..$110 acre is what umm maybe 5
points? What's the interest bill Einstein?

[ASRG]

23 years with the same tenant. I get 1/3 of the crop,pay 1/3 of fertilizer and spray. He markets everything, makes all the decisions on what he grows and inputs. He pays all crop insurance and gets any payout. I supply the bins and will give him a hand if he needs it.
It has worked well for both of us.....he farms it like he owns it.

[seabass]

Sounds good as long as you are paying it and not me. I work hard enuf not to give away 130 to 150 an acre. 75 in a bad scenario for no risk.

[dluther]

GRRR if you find a banker or f.c.c. to go with your plan good for you but just remember they don't loose if things go bad.Cattlemen thouhgt $1400 was a normal price for cows or bred hfrs in 2002. B.S.E. CHANGED THAT and the bankers never lost.It's called RISK AND HOPE.