Fair rent agreement.

[blackpowder]

You have some great ideas.
Demand has always been high here.
Forget about a formal lease normally.
Verbal and you have 5 seconds.
One I did have, the landowner broke it anyway. The only loyalty I ever got was not going up to the area max right away. (2.4% of market value instead of 2.5% LOL)
Having said that, I've also had some wonderful owners.
Was fired by one, (Alzheimer's)
And I fired one, (A Chuck)

[Retired]

I gather from the comments that most of you are renters of some land,whitch is good ,all comments are useful, we all have to make some money or what is the point ,and I am guessing every area is different weather affects ,area average yields, closeness to home and quality of soil ,competition for land and some things you cant realy put a $ value on. Its just nice when you both go away happy.

[Guest]

Still curious tho, would you be paying your share of some inputs ?

[blackpowder]

Still curious tho, would you be paying your share of some inputs ?

And is he recognizing his tax benefits?
And here's one. Is that percentage after trucking and drying? Net after tenant paid all trucking, drying, shrink, dockage? His 1650 flat floor bins? Enough storage?
Allowed to sell all share grain on lowest contracts or averaged? Who tracks it? Grain cart tickets too? Sweep the box corners when moving?
One guy I fired wanted full cash on breaking if I broke it LOL.
Usually son in law takes it back in year 3 for me lol. Lost some this year that way.

Thinking when it's my turn. Just a reasonable to lower for area % of land value. Then a % waiver in years where you're at or in to ins levels.
% crop share is like paying the casino a take on every pot, plus the annual buy in. Too much paid in good years not available to cover the poor. That's my experience, have #s to prove, and MNP agrees.
Supply and demand of course makes all the above buffalo chips.
Good luck to you in your retirement.
Have another landlord in terminal care now myself.

[shtferbrains]

Crop share was popular here when inputs were -$40 an acre and most farmed 1/3 summerfalliow.

Wasn't long for the higher input,continuous crop cash rents to pay better than that did.

But to crop share on todays operating costs reminds me of advice a friend gave me.
" If I'm going to go broke I don't want to work hard at it".

[blackpowder]

No book work either, if you all had permit books.

[Retired]

Still curious tho, would you be paying your share of some inputs ?

That is part of the equation how much if any. I havent rented other than hay and that has always been 1/3 2/3 . I was always a low imput operation ,hay 4 to 6 then bly oats 2 mabey 3 yr then back to hay,worked to keep weeds under control plus good cereals. Not to many million$ combines and tractors in this area,so costs are lower than the btos
60 yr ago when I started farming rent was 10$ or 1/3 2/3 bly .70cents oats 65 .land was less than 100/acre, quite a change.
Lets turn around and ask how much profit do you expect the renter should make.80/20 and no contribution by the landlord looks to be reasonable to me. Way to many variables .

[BreadWinner]

That is part of the equation how much if any. I havent rented other than hay and that has always been 1/3 2/3 . I was always a low imput operation ,hay 4 to 6 then bly oats 2 mabey 3 yr then back to hay,worked to keep weeds under control plus good cereals. Not to many million$ combines and tractors in this area,so costs are lower than the btos
60 yr ago when I started farming rent was 10$ or 1/3 2/3 bly .70cents oats 65 .land was less than 100/acre, quite a change.
Lets turn around and ask how much profit do you expect the renter should make.80/20 and no contribution by the landlord looks to be reasonable to me. Way to many variables .

I think most farmers hope to clear $100 per acre minimum. I think more share crop landlords loose trust and frankly just don’t really want to let go of the reins. My advice to you is put it up for cash rent tender and enjoy your retirement.

[furrowtickler]

That is part of the equation how much if any. I havent rented other than hay and that has always been 1/3 2/3 . I was always a low imput operation ,hay 4 to 6 then bly oats 2 mabey 3 yr then back to hay,worked to keep weeds under control plus good cereals. Not to many million$ combines and tractors in this area,so costs are lower than the btos
60 yr ago when I started farming rent was 10$ or 1/3 2/3 bly .70cents oats 65 .land was less than 100/acre, quite a change.
Lets turn around and ask how much profit do you expect the renter should make.80/20 and no contribution by the landlord looks to be reasonable to me. Way to many variables .

Have you priced out machinery , inputs , insurance and depreciation this past few years ?
There is very very little profit even at 80/20 these days , sorry to break it to you .
If you sucker someone into 1/3 , 2/3 good for you , they will be broke in very short term .
It’s obvious you are worried about how much the renter “ may make” . But at 1/3 , 2/3 the renter will lose big time on average now .
Your costs per acre are not lower than BTO ‘s , that’s guaranteed. Sorry to be negative, but that’s a realistic statement for all of us now
Maybe 30 years ago
It’s too bad that some are worried about that others may , at some point in time make more money than them .
If that’s the case , farm it again yourself and take the massive risk and farm it again.
Or you should just cash rent it out . But it’s your dirt , your choice. All the best . It’s not 1980 anymore

[furrowtickler]

A landlady once told me she takes tje first 10 bushels produced per acre.

Lol , she should go back farming and try that unless she grows oats every year . Would be a serious eye opener

[furrowtickler]

There was a big shot land owner here several years ago that convinced guys into 1/3 , 2/3 crop share .
His idea was great for him , had 3 separate farms on the hook every year . The lowest guy each year was dropped . Then some other clown would try . Every single farm that tried failed … it’s economics 101 . A few that lasted more than a few years ended up getting charged for falsifying yields to try to make it work . After they got hooked , they knew they were screwed.
There is no way unless landlords pay 1/3 total expenses, or it’s 1/3 summer fallow / chemfallow . It can’t happen. But it was amazing how the bravado of some farms would try it .
Better odds going to Vegas with a loan to gamble

[blackpowder]

That is part of the equation how much if any. I havent rented other than hay and that has always been 1/3 2/3 . I was always a low imput operation ,hay 4 to 6 then bly oats 2 mabey 3 yr then back to hay,worked to keep weeds under control plus good cereals. Not to many million$ combines and tractors in this area,so costs are lower than the btos
60 yr ago when I started farming rent was 10$ or 1/3 2/3 bly .70cents oats 65 .land was less than 100/acre, quite a change.
Lets turn around and ask how much profit do you expect the renter should make.80/20 and no contribution by the landlord looks to be reasonable to me. Way to many variables .

Everyone has different fixed costs. In business, you need all the profit. Strange question. That's the definition.
Here, 20% of gross would be very fair compared to area averages being paid over the years. I would take a 20%.
I'd have to see it regarding first year. Rocks etc.
Again, only in a year like this would a higher crop share be beneficial to the tenant.
It's because of years like this that you need to bank all you can when times good. Last year $1000 gross, this year $450 or less. Depending on fixed cost level, less than break even.
Remember, 2 yrs great, 2 yrs awful, 6yrs mediocre. All with the same fixed costs.
There's a reason "sharecropper" is synonymous with dirt poor cotten pickers.