If it's $1 per acre more than it was 35 years ago, many farmers will complain and try to get the owner to come down on price.
The first one arrived today
- Thread starter soybean
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If it's $1 per acre more than it was 35 years ago, many farmers will complain and try to get the owner to come down on price.
You sound like another guy that inherited farm land and is crying about it. If you could make so much more selling it, why are you hanging onto your land?
I'd listen to @Herkster5, he seems like he knows what he is doing.
I would determine the quality of the renter, is he a local renter or a big corporate renter? I like the idea of young people getting into the farming business. They are the future. I would be less likely to cut a deal on someone who rents 2000+ acres.
If he does a good job caring for the land and there is a good relationship I would be willing to negotiate. A good long term renter may be worth more than a few extra bucks in your pocket this year. Sometimes people are very short sighted.
I'm not crying about my rent. I'm happy with what the farmer pays and if he asked to pay less I would probably take it. I kept the land because it means something to me not because I wanted to make more money. If I did sell it, I'd like it to go to a young person that otherwise would not have the opportunity to get into farming. I realize I'm lucky as was my father before me. I'd like more people to grow up the way I did.
Soy, I've always enjoyed your posts. This one seems a little touchy around here. I lowered ours 5%, tenant came to me an asked. We are very hilly with shitty csrs The deciding factor was his care of our property. I watch some of our neighbors try and make it in these clay hills and they are trashing their property. For me it was easy, the guy protects my investment, so rather than risk getting a careless tenant who I'd have to bounce in a year, I gave a little. My 2 cents.
Another possible input in Soybean's situation here is the renter's banker might be behind this story...putting pressure on the renter for next seasons operating capital?
Soybean,
I'm a licensed farm manager, but not in Iowa. I manage mostly farms that are highly productive or have been made to be that way.
I echo about everything Herkster mentioned. Here are some additional thoughts.
The Iowa State publication of cash rents is low. If you are 85% of the CSR amounts, you will have no issue finding someone who is solid financially and easy to get along with. If I ran an add in the Register, Farm Bureau pub, or CR Gazette, I'd get 75 to 150 applicants of which 10 would be fantastic farmers, easy to get along with and pay the kind of rent you want (and you are likely low).
I like using flex cash leases.
My formula is this:
APH (trend adjusted) yield x expected prices. Dec 2025 futures right now are $4.50 and that minus a basis is a good place to start but I would wait.
Take the yield x price x 36 or 38 percent and that is your base rent. That is the minimum. Take actual yield (verified by scale tickets/crop insurance yield and yield monitors (all 3) times the average price on a day of the month (such as 2nd Tues) from Jan - Oct or Nov and the actual rent is either the base or the equation number, which ever is higher. I also take 5-10 percent of any crop insurance proceeds. A few owners ask for part of any govt payments which were huge under Trump but not something I readily do.
My farmers become my friends and we have open dialog. I don't keep difficult one's that lay on the "oh its so tough". That is a standard line and I don't like it.
Your land would/could still sell for +$15k per acre. Do the math on a 2.5 percent return which is very low historically. It should be 4 to 6 percent and farmer are the main buyers. Many have a lot of cash.
If your yields are typically at or below last year, your yields are too low. I have no way of knowing. Is it fertility? Drainage? Compaction?
A good farmer should have that hitting a minimum 250 in MOST years but not all. 260 to 275 is quite attainable.
Landowners are often intimidated by farmers by farmers. No reason to be.
We are definitely in a tough spot, but we removed a lot of risk from farming and many expect a profit every year.
Fact is with new high speed equipment (another subject) to be frank we have too many farmers for the equipment invested and the ground. This is a hard reality.
On a side note, a good organic farmer will after a few years make your farm more profitable, but is is more work.
I'm a licensed farm manager, but not in Iowa. I manage mostly farms that are highly productive or have been made to be that way.
I echo about everything Herkster mentioned. Here are some additional thoughts.
The Iowa State publication of cash rents is low. If you are 85% of the CSR amounts, you will have no issue finding someone who is solid financially and easy to get along with. If I ran an add in the Register, Farm Bureau pub, or CR Gazette, I'd get 75 to 150 applicants of which 10 would be fantastic farmers, easy to get along with and pay the kind of rent you want (and you are likely low).
I like using flex cash leases.
My formula is this:
APH (trend adjusted) yield x expected prices. Dec 2025 futures right now are $4.50 and that minus a basis is a good place to start but I would wait.
Take the yield x price x 36 or 38 percent and that is your base rent. That is the minimum. Take actual yield (verified by scale tickets/crop insurance yield and yield monitors (all 3) times the average price on a day of the month (such as 2nd Tues) from Jan - Oct or Nov and the actual rent is either the base or the equation number, which ever is higher. I also take 5-10 percent of any crop insurance proceeds. A few owners ask for part of any govt payments which were huge under Trump but not something I readily do.
My farmers become my friends and we have open dialog. I don't keep difficult one's that lay on the "oh its so tough". That is a standard line and I don't like it.
Your land would/could still sell for +$15k per acre. Do the math on a 2.5 percent return which is very low historically. It should be 4 to 6 percent and farmer are the main buyers. Many have a lot of cash.
If your yields are typically at or below last year, your yields are too low. I have no way of knowing. Is it fertility? Drainage? Compaction?
A good farmer should have that hitting a minimum 250 in MOST years but not all. 260 to 275 is quite attainable.
Landowners are often intimidated by farmers by farmers. No reason to be.
We are definitely in a tough spot, but we removed a lot of risk from farming and many expect a profit every year.
Fact is with new high speed equipment (another subject) to be frank we have too many farmers for the equipment invested and the ground. This is a hard reality.
On a side note, a good organic farmer will after a few years make your farm more profitable, but is is more work.
How much would it cost to rent out a few acres for a weekend for an HBOT Olympics/Kegger
People in this thread are hiliarous.
@soybean has been in this game through all the cycles and knows what he's doing. He's not going to drop a good tenant for a few bucks. He did seem to be a little farmer bitchy in the OP, but who cares.
@IAFB2021Champs you were right the first time when you mentioned not understanding. Your subsequent posts continued to reinforce that and added a level of envy or something.
@soybean has been in this game through all the cycles and knows what he's doing. He's not going to drop a good tenant for a few bucks. He did seem to be a little farmer bitchy in the OP, but who cares.
@IAFB2021Champs you were right the first time when you mentioned not understanding. Your subsequent posts continued to reinforce that and added a level of envy or something.
True, but you would be a good steward of the land, and a friend of the environment.
Thanks Hawk, but as usual, everyone has their own opinions, just like I do. Even with the landlords I work with, we know that we could make two phone calls and have the highest bidder without a doubt. However, most like to help younger farmers, or farm families, that have lent a hand in the past. Not that I'd criticize someone for chasing the highest dollar, it's their land to do what they chose, I just don't think it gets cared for the best (I've got two very, very large farmers that have moved into our area the last few years, and it's evident in the weed control and how the crop looks).
Why is it a pain in the ass? If you've got a good tenant, pay your bills, he'll help market some grain for you if you want, and you get a tax deduction for the farm inputs to help lower your income on paper. We've given our crop-share landlord several of our contracts in the past few years, as well as advising that, "Hey, we are selling a fair portion of our crop now, and here is why. If you want to jump on board, let me know". Seems like a win/win to crop share.
Wants to keep it in the family and pass it on to the next generation to do with it as they please. As his folks did.
This might be the silliest farm related comment that I've seen in awhile. Pay more in rent than owning it? That's an absurd comment.
Your comments in this thread are childish, foolish, and seem greatly uninformed.
Might want to sit this one out, champ?
Haha I’m not the one that created a thread complaining about having to find a new renter to rent out my inherited farm land at the same time poking fun at farmers always thinking they should get a handout.
Dude got a handout in the form of inherited land and is complaining about it.
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The CSR soils he mentions are not average soils so therefore the numbers would be hired as well as not indicative of less than arms length transactions compared to open market.
Risk/reward is the issue and flex cash leases will bring in more rent most years with less risk.
If the OP wanted some advice that’s fine. You don’t mock the hand that feeds you. Both cash for rent and food on your table.
I assume you meant higher not hired. I used the average from Google knowing that a lot of farm ground would bring much higher prices including my own which lies on a major highway just a mile outside of town. Over the years many people have wanted to buy off pieces of our ground for development but like I said the farm always meant more to my family than money.
I stepped in to a situation, slapped a lien on the farmer late and later he went full bankrupt by the end of the year. It does happen. He is now in Terre Haute Fed Penn for fraud.
One of my uncles inherited the farm on my mom’s side. He still farms and his boys farm with him. They rent a lot of land around them as well.
My grandpa on my dad’s side got screwed over by my great grandpa. Apparently my grandpa was doing all the farm work and my great grandpa reaped all the benefits until the day he really f’ed over my grandpa and sold the farm in a selfish move.
