Buck Hollow Sporting Goods - click or touch to visit their website Midwest Habitat Company

Tillable cash rent questions….

Rous14

Rous14

PMA Member
Wondering what some of you are hearing or getting on tillable ground. Have a smaller field around 20ac that I need to determine what I want to do with. Currently in production at $175ac but I’m being told by a realtor friend that he’s seeing $350ac lately on quality dirt And feels I could get that if I tried. I have little to no experience with how all that works. How does a farmer go about valuing something like that? PI and soil type I assume? Realtor mentioned he’s been using cashrent.com anyone have any experience with it?
 
Does the 20 ac field get any wildlife damage? Can it crank out 200 bu corn or more? Do you know what the PI is? You could go to websoilsurvey and try to calculate it. Is it odd shaped or a nice efficient square cornered piece? 350 seems high to me for an average 20 ac piece around here.
 
Pay for a soil study and require the tenant to maintain the soil quality otherwise you could get into a situation where the guy comes in and does corn on corn for two years, puts down no P,K,N stripping all your nutrients and then walk away
 
As long as the curent renter is, and has taken care of the ground, and the taxes are being paid, then I would mayby ask him for fifty dollars more, and see if he will pay it. Otherwise I would let him keep renting it. Farmers in todays state of finances are being pushed to the limit with seed, fuel and firtlizer cost. They also have the chance that the crop dose not produce as intended, and the markets could be less.
 
Honestly, I, myself couldn't get it figured out for years. So, before last years crop, I contact 4 farmers that had a good reputation in the area and asked them to bid cash rents on the ground. I figured I let local demand set the cash rent.
I had discussions with each of them beforehand what fertilization requirements I had and how it'd work. Then I selected 2 and gave 2 farms to each of them.
What that seemed to do, without it being my initial goal, was create an ongoing competition of "do it right" each and every year according to the lease because there's someone else who'd be glad to take that ground that I'm already working with. I didn't select the highest bidder, I selected 2 that through conversation, had the same goals as I did of improving/taking care of the ground and what their role would be, and what mine would be.
I'm in the 2nd year of this process.
Where the first years fertilization application didn't meet what the crop removed, extra was being put on this year to make up for the delta. It took some discussions, but I think we all have the understanding that I'm not the bank in this process.
All the farms but 1 were limed this year, all but 1 were grid sampled. It's been a process but with commodity prices high, now is the time to get a good agreement/management practice put in place imo.
20a is a little more difficult as it won't be a huge draw for a lot of farmers, but it's still ground someone would want to have.
Figure out what your goals are and go from there.
Good luck.
 
$175 isnt all that bad if its a smaller uneven field with lots of point rows and surrounded by timber.
That type of field gets hammered by the wildlife and is not very efficient to farm.
The guys paying 350 are probably bigger, square fields away from the timber edges.
 
northcedar said:
Does the 20 ac field get any wildlife damage? Can it crank out 200 bu corn or more? Do you know what the PI is? You could go to websoilsurvey and try to calculate it. Is it odd shaped or a nice efficient square cornered piece? 350 seems high to me for an average 20 ac piece around here.
Click to expand...
Appreciate all the replies. Few of the questions that I know answers to or kinda answers

- PI is 140 (I’m told this is about as good as it gets?)
- surrounded by great deer habitat so it definitely gets hit pretty hard by wildlife (I’ll try to ask the current farmer what types of yields he’s getting)
- shape is not square or rectangular but it’s pretty close
 
Bump it i up to $200 and if call it good.

To ask $350/acre in a smaller field is asking a lot ?
 
140 PI is what I'd call A+ soil. Now how it lays or drains is somewhat of a different thing to consider. Yield history would tell a lot. 147 is the highest soil in IL. 133 is considered class A. There could be cases of a whole field being Drummer soil (144 PI) but it's a soil lower in elevation in its respective soil series and if it doesn't have any tile it could potentially be a swamp. Much depends on how it lays.
 
Remember!!!…. So I’m the farmer that wants to rent your ground for example…. I could pay you $400/acre for ONE year…. I’d skip the p&k & TAKE from the land & I would make $!! Lock in $7 corn or $14.50 beans & not put a drop of p&k down - I’ll come out making great $ THIS YEAR. That’s probably $125-200/acre in fertility im taking out. So- don’t chase the top dollar!! Make sure replenishment rates of p&k are applied!!! Watch it & make sure it actually goes on!!!
I’d rather do a long term contract for a reasonable rent price vs a 1 time high dollar figure.
Here’s what will determine your true rent prices…. Ask folks what they will pay based on a 3 year lease for example.
Specific to you…. Agree on above- Depends on how the ground lays, how well it’s been cared for in past (p&k for example, manure, cover crops, etc)…. Is it tiled or does it have wet spots, etc etc. 2-3 rent quotes on a 3 year contract will likely give you a pretty reasonable market rate.
 
Sligh1 said:
Remember!!!…. So I’m the farmer that wants to rent your ground for example…. I could pay you $400/acre for ONE year…. I’d skip the p&k & TAKE from the land & I would make $!! Lock in $7 corn or $14.50 beans & not put a drop of p&k down - I’ll come out making great $ THIS YEAR. That’s probably $125-200/acre in fertility im taking out. So- don’t chase the top dollar!! Make sure replenishment rates of p&k are applied!!! Watch it & make sure it actually goes on!!!
I’d rather do a long term contract for a reasonable rent price vs a 1 time high dollar figure.
Here’s what will determine your true rent prices…. Ask folks what they will pay based on a 3 year lease for example.
Specific to you…. Agree on above- Depends on how the ground lays, how well it’s been cared for in past (p&k for example, manure, cover crops, etc)…. Is it tiled or does it have wet spots, etc etc. 2-3 rent quotes on a 3 year contract will likely give you a pretty reasonable market rate.
Click to expand...
Is it typical for the replenishment of p&k to get put on in the fall after harvest or is it typically in the spring prior to planting?
 
Rous14 said:
Is it typical for the replenishment of p&k to get put on in the fall after harvest or is it typically in the spring prior to planting?
Click to expand...
Depends on the grower, season, retail locations etc. Every area is a little different. Remember there are multiple removal rates so do your research.
 
Rous14 said:
Is it typical for the replenishment of p&k to get put on in the fall after harvest or is it typically in the spring prior to planting?
Click to expand...
Typical is fall after harvest. Some folks get on in winter or spring before planting. When applied in spring, much is not available that season - takes a year to break most down …. you are often applying small broke down rocks like potash.
manure is usually fall as well. Sometimes winter & spring. Similar situation- some of the p&k is not available year 1.
That’s why a long term farmer is ideal- if they start this season - they know the p&k, etc put down today will be available while they have the crop ground contracted over several seasons ahead.

Side notes:
-Manure is more desirable vs conventional. I’d put a bonus on a farmer applying that to my farm.
-I’d also give bonus to any farmer doing cover crops.
-ag lime where needed. Good farmer will apply if needed & keep ph where it needs to be.
-care of waterways, guys with plenty common sense & a good local reputation is huge.
-many neighbors likely can give you some assistance. On some occasions for large absentee land owner, they will use a farm management company for all of this.
 
I would look at iowa states rental rates. It has it broke down by county and then by poor, med, and high quality dirt. Good place to start in my opinion. I agree with others that said don't piss off your current farmer if he's taking care of the ground. Look up the average and talk about what rent should be over a beer.
 
Nightvision said:
I wouldn’t run a good farmer off for a little more money. If he’s been good to you and your dirt, I’d take that into consideration.
Click to expand...
Ya. Just trying to balance what you’re saying here vs getting potentially double the income. That’s hard to say no to. Nothing personal with the current farmer just trying to get the best return I can same as him. As Sligh said above I need to make sure that if I get a much higher offer that it’s w someone reputable that isn’t going to rob the ground.
 
I actually deal with this issue professionally in a different state but I would assume many of the same strategies could be employed. (Disclaimer - This is not legal advice.) The only way to determine what the ground is really worth is to accept bids. I advertised in a local newspapers and bids flooded in. In multiple instances, bids were double what the current tenant was paying. If you take this approach, be sure to time it with the termination of your current tenant so that you don't end up with a disgruntled tenant farming your land for a season (Can lead to mistreatment of the soil).

Get a legitimate, written, cash-rent lease.The contract will detail procedures for ensuring the farm tenant maintains proper fertility and farming practices. Don't be overly loyal to your current tenant, I see landowners getting taken advantage of on a consistent basis. Farm tenants know what this land will fetch if public bids are taken and are happy to pay below market rates. Allowing a farmer to farm for cheap is no different than writing him a check at the end of the season for $100-150 acre (what you are giving up in rent). Most of my clients will give the current tenant the first crack renewing the lease at a higher rate. You will likely want to consult an attorney at the beginning of the process as the prospective tenants will want to see the lease and soil maps before bidding.

There is still insane demand for tillable acres, regardless of input costs. My personal farm tenant is paying 40% more than previous tenant, and uses cover cropping, has installed infrastructure for me, and also plants an acre of corn or beans for me at no additional cost. I'm assuming you are a hunter so these other bonuses may be worth a lot to you.
 
  • Like
Reactions: arm
You must log in or register to reply here.
Top Bottom