Fair rent agreement.

[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.

[blackpowder]

This thread has me curious. Does anyone know how Andjelic calculates his rent?

[Guest]

Good luck on your retirement horse

[jazz]

Whats the obsession with holding the land unless you are living on this quarter or you have some hopeful farmer in the ranks.

I mean who would you rather pay you, some farmer with a complicated share crop agreement, or any of Canadas bank stocks who havent missed a dividend payment in 100yrs.

There are covered call funds off the banks paying 8% right now. Are you realistically going to get that return from share cropping.

A cash rent deal around here would net you 3%. Not even close to inflation.

[SmallTimeOperator]

This thread has me curious. Does anyone know how Andjelic calculates his rent?

Online land rental tender process. Tenders out now for next year while current tenant harvests drought stricken crop. Tenant has no land security going forward. At the end of the lease, tenant might be sent packing if he doesn’t bid through the teeth. I don’t agree with this method at all. I need landbase security.

Imagine this one from last winter:
22000 acres south of Melville
You rent for the max.
You need more equipment. In this area 7 combines, 7 straight cut headers, 2 air drills, 2 4x4 tractors, one sprayer, 2 rock pickers and tractors, heavyharrows.
You farm for the 5 years. End of the lease, it’s a land rental tender for him to try to extract the max rent he can. If you don’t win, you have massive equipment payments and no revenue. Call Ritchies.

I refuse to get in on this method. I have been left hanging with leased iron after BTO knocked on door of my landlord and offered more rent than I could afford after 2 years of less than 2 inches of rain.

[blackpowder]

Wish I had 5 year leases.

[shtferbrains]

Whats the obsession with holding the land unless you are living on this quarter or you have some hopeful farmer in the ranks.

A cash rent deal around here would net you 3%. Not even close to inflation.

Hasn't the inflation been more than covered by the rise in land value?

[Retired]

Whats the obsession with holding the land unless you are living on this quarter or you have some hopeful farmer in the ranks.

I mean who would you rather pay you, some farmer with a complicated share crop agreement, or any of Canadas bank stocks who havent missed a dividend payment in 100yrs.

There are covered call funds off the banks paying 8% right now. Are you realistically going to get that return from share cropping.

A cash rent deal around here would net you 3%. Not even close to inflation.

Yes I live on 1 1/4 but others could be sold but dont realy need more money ,and mabey selling piece by piece or as a whole still a question. Does anyone get an 8% ROI?? Today GIC 5.2%
Cash rent 3% would be close to average around here also ,hard to tell as farmers being tight lipped you never know if you are getting the truth.
All this discussion is good but I have more to think about than ever now.

[TOM4CWB]

Yes I live on 1 1/4 but others could be sold but dont realy need more money ,and mabey selling piece by piece or as a whole still a question. Does anyone get an 8% ROI?? Today GIC 5.2%
Cash rent 3% would be close to average around here also ,hard to tell as farmers being tight lipped you never know if you are getting the truth.
All this discussion is good but I have more to think about than ever now.

23% of gross revenue would be reasonably fair for both farmer and landlord…. We include crop and hail insurance in the gross revenue. Some landlords carry their own hail insurance… that is on them to top up if they are so inclined.

Happy Farming!
Blessings

[jazz]

If you have cash on hand, I would invest that and supplement a straight forward cash rental agreement if you are dead set on holding land which is definitely an inflation hedge.

I just feel that overly complicated rental agreements are disincentive for a farmer that already has enough variables to worry about.

I dont know anybody doing crop share around here.