Fair return

[JoeyJeremiah]

I have never been able to completely understand why farmers expect to get land rented to them for less than the market is at. Why is it different than the farmer trying to get the most for his canola or wheat or you name it. The people who have land to rent have a commodity that you the farmer kind of require to run that over priced machinery over. Many of the landlords are retired farmers who have paid their dues and now are using the equity in their land to fund their retirement . Seems fair to me. Sorry but I dont understand all moaning and bitching about rent. I dont think there is a cartel of landlords forcing the rent up. Last time I checked it was farmers trying to grow larger that forced the rent higher. BTW I am not a landlord yet,I am the tenant,and probably will have to rent my land at a large discount to my intern.

Because this is the thought process that goes into it when most farmers put pen to paper and figure what they should pay for rent " well I think the neighbour is going to pay $100/acre for rent, and I'm a better farmer then him so I should be able to pay $110." No cost of production numbers, no marginal return analysis, nothing, nada.

And it does directly effect me as all my rents will have gone up to the same level. Maybe they are smarter better farmers then me, but I doubt most don't actually know their cost of production and the marginal returns if they rent that land and increase the local rent by 20%. Perhaps they will last longer than me and I can let them pay me an exorbitant amount for the little I own.

[furrowtickler]

Agree with Joey . Rents are becoming unsustainable if you own a pen and paper and work with real numbers . Time will prove that .

[hobbyfrmr]

15 years ago this may have been the case. The farms around here are well managed. I suspect between FCC and MNP they are aware of their costs and what they can pay for rent. Some farms are 3rd generation and they were well managed long ago. When your cost if production gets into multi millions Im thinking you have hired somebody to run the numbers through with you. Some guys can afford to "average up" on cash rents.

[Wheatking]

15 years ago this may have been the case. The farms around here are well managed. I suspect between FCC and MNP they are aware of their costs and what they can pay for rent. Some farms are 3rd generation and they were well managed long ago. When your cost if production gets into multi millions Im thinking you have hired somebody to run the numbers through with you. Some guys can afford to "average up" on cash rents.

I think you give most producers more credit then they deserve. "Average up" is a good term. I always run the numbers, know my marginal return by adding an extra 160 acres etc... And most of it gets thrown out the window if its a quarter next to mine etc.... I won't go nuts, but most times I don't think as rationally as I should when bidding. But if I thought rationally I wouldn't be farming.

I honestly have never had FCC ask what I pay for land rent. They want to know what my gross income and margin is, they could care less about anything else and how I operate my dark from what I can tell. As for MNP, I have never heard of anyone being given the advice to expand to make the numbers work, ussually it's downsizing and debt reduction.

But there are much more profitable, smarter farmers then me out there, and if they want to pay more for rent, so be it. I just keep telling myself bigger isn't always better, or is that what I tell my wife.

[farmaholic]

Wheatking...I'm sure Mrs. Wheatking doesn't want to offend you.

Seems the older men get, they become better judges of size.

Maybe the law of "averages" finally sets in.