Fair rent agreement.

[shtferbrains]

You probably have it covered but IMHO the most important financial thing going into retirement is tax planning.

Taxes can take a large part of your accumulated lifetime wealth if your not well advised.

Big cash income and no expenses for first time.

[TOM4CWB]

You probably have it covered but IMHO the most important financial thing going into retirement is tax planning.

Taxes can take a large part of your accumulated lifetime wealth if your not well advised.

Big cash income and no expenses for first time.

Expenses can be part of the payment, the Gross income becomes net income… with expenses and income totaling the payment to land owner. Fair, simple, meets the requirements. Actual numbers are very close to 1/3-2/3 with expenses the 1/3-2/3 being paid by landlord…

The 23% can be adjusted… to meet the needs of the parties.

Blessings

[oldjim]

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.

[ATTACH]13107[/ATTACH]

I know of three or four around here on crop share - 30%, renter pays expenses, owner pays the taxes, some grain storage available.

[jazz]

I see where you are going. The cash rent is just too small versus the land being actively farmed, hence the crop share. Another option is getting your renter to custom farm a couple quarters for you. Give them a straight up cash rental deal maybe with a little discount kicker for some of it and then have them farm some for you.

That sort of carves out the crop share part out from under your renters umbrella. You cover your own inputs, insurance, make your own crop decisions and they just put it in your bin at harvest. Maybe cleaner arrangement.

[TOM4CWB]

I see where you are going. The cash rent is just too small versus the land being actively farmed, hence the crop share. Another option is getting your renter to custom farm a couple quarters for you. Give them a straight up cash rental deal maybe with a little discount kicker for some of it and then have them farm some for you.

That sort of carves out the crop share part out from under your renters umbrella. You cover your own inputs, insurance, make your own crop decisions and they just put it in your bin at harvest. Maybe cleaner arrangement.

Jazz, this is what our arrangements do, custom farm, whatever expenses are negotiated… but the net payment is locked in before spring planting… 23% of gross revenue… or what ever is acceptable to both parties. This spreads the risk appropriately to both sides in a reasonable way.

Cheers

[Guest]

I know of three or four around here on crop share - 30%, renter pays expenses, owner pays the taxes, some grain storage available.

Ouch ,
So on 50 bu canola owner gets 255$
Farmer spends 650$ on inputs and machinery and gets back $595
That renter will need a steady stream of farmers cause they won’t last long

[makar]

Ouch ,
So on 50 bu canola owner gets 255$
Farmer spends 650$ on inputs and machinery and gets back $595
That renter will need a steady stream of farmers cause they won’t last long

It cost 104000 a 1/4 to grow canola?

[oldjim]

I see where you are going. The cash rent is just too small versus the land being actively farmed, hence the crop share. Another option is getting your renter to custom farm a couple quarters for you. Give them a straight up cash rental deal maybe with a little discount kicker for some of it and then have them farm some for you.

That sort of carves out the crop share part out from under your renters umbrella. You cover your own inputs, insurance, make your own crop decisions and they just put it in your bin at harvest. Maybe cleaner arrangement.

One of our neighbours rents to two different outfits - one is cash rent the other the aforementioned crop share. Been doing it for a few years now, he says some years the cash pays better, sometimes the crop share pays better. One advantage of crop share for the landlord, I understand he is considered actively farming for things like municipal hail, vehicle licensing, etc. Cash rent the landlord has none of that. Cash gives the landlord an assured amount each year (providing he receives the full amount, some split the cash rent in half - spring and fall payments). Crop share the landlord runs the risk of little or no rent on bad years. The third option, custom farming, was mentioned to me by an acquaintance. That might be a viable alternative provided the owner isn't left until last on everything. Seems to me Sask Ag used to publish a schedule of custom rates for various field operations - I don't know if they still do that. It would at least give both parties a starting point in negotiations.

[Guest]

It cost 104000 a 1/4 to grow canola?

Talked to a couple young movers , shakers
Yes they said their cost per acre on canola is $650

[checking]

Talked to a couple young movers , shakers
Yes they said their cost per acre on canola is $650

After what it really is, you can say/make it whatever you want. Is someone placing a value on sunshine and water?

[Retired]

Talked to a couple young movers , shakers
Yes they said their cost per acre on canola is $650

At those $ I dont know why anyone would grow canola, Thats a 50 bu or a 24$ per bu crop, I think that would be hard to maintain. I dont grow it so can only go on hear say but there is a lot of acres planted , hard to think the risk is that high.

[blackpowder]

Sounds a little high. But I can see it for some last year yes.

[Guest]

After what it really is, you can say/make it whatever you want. Is someone placing a value on sunshine and water?

Million each for sprayer ,two combines , all the rest , has to be pencilled in somewhere

[Guest]

Roundup $7
Seed $70
Fuel $25
Fertilizer N-$160
P $39
Fines and floating $39
Weed spray $25
Fungicide $22
Crop ins $15
Hail ins $12
Bug spray $10
Ours last year $424 , what did I forget ?
No Mach expense or time or repairs
If some of you don’t think lots have $225/ac Mach expense per acre you got left behind

[blackpowder]

Now add the rest of the fixed costs.