price of leased cropland?
 

we've got twenty acres of cropland that we're going to lease for corn
or soybeans, and was wondering what the land may be worth? we have
used it as a hayfield for several years but it has exhausted that. several
folks have contacted us with interest, but I just was wondering what a
ballpark figure would be? thanks for any info!
pc

Our deal is that we pay for 1/3 of the fertilizer and other chemicals and get 1/3 of the crop money. Our neighbor farms our 23 acres for us. He pays for seed, fuel and the other 2/3 of fertilizer and chemicals. Last year, he grew soybeans. This year, he has planted corn and it has just sprouted.
This is pretty much the standard agreement in SE Kansas.

The local co-op handles all the money transaction. They send me a bill for my portion of what he buys and send me a check for my 1/3 when he sells it to them. He doesn't have to buy or sell thru them but so far, they have had the best deal. Also, I have the option of selling my portion or storing it in hopes of getting a better price later.

Well you could do it on shares or cash rent, which ever you want. Cash rent down this way on good ground is at around 300 an acre, some of the old timers are getting as much as they paid for some of their farms. > Marc

A local farmer used 13 acres of our former hay field to plant soybeans last year and is getting ready to plant something there this year. In exchange he bush hogs our 96 acres and does kudzu erradication for us. Plus, he brings us hay for the horses in the winter and extra fruit/veggies from his place in the summer (last year he kept us in watermelons and corn).

In our area, nearly all the cropland it rented for cash only. It makes less stress on the landlord when he knows what he will get for his ground usage. It helps the renters out quite a bit by saving them the time and expense of keeping each farms crops seperated and delivered to market. When a renter has several farms to keep track of individualy, it adds time and trips to market. Also many renters have on farm storage for a large portion of their crop. Weighing out his half for storage and delivering your half to mkt is an unessesary pain.
I didn't answer your question did I? Cash rent in this area is running about a dollar cash rent for each bushel per acre that your ground would produce in a normal year. If the yield varries for some reason, one of the involved parties will get the better end of the bargain. Now that the prices have skyrocketed cash rent will be all over the board. Farm expenses have also skyrocked, so all that glitters is not gold.
Another plus for going cash rent is the renter usualy pays half the rent in the early spring like April first. The second half is paid in the fall, like Nov first. When you rent on share basis you have to pay out in the spring and get your reward in the fall after harvest is over. Maybe in the middle of winter.

Good farmland can go $150-300 an acre these days in our areas. Cash rent has become most common around here, very little share cropping any more, but whatever you want to do - share cropping you get to spend some money too on seed, fertilizer, herbicides, then you get a portion of the grain to store or sell or do what you want - share-crop can affect your income taxes ans social security greatly, so think ahead if you do share-crop.

Now, why was it in hay? is something wrong with the land - sandy, wet, steep, rocky?Walled in by a line of trees on all sides so a lot of shade & tree roots taking water away?

Is it a nice rectangular 20 acres, or is it all funny shapes hard to rowcrop?

Did you keep up the soil fertility, or is it horribly under-fertilized and the fella is going to have to dump double fertiliy on it to make a crop?

Is the land in the farm program, or is it totally outside the program? Have you done any drainage or land-shaping that would cause issues for a farmer with wetlands or sod-buster rules - that could be a real issue.

Will you be offering it one year only, or are you figuring on 3 or more years - farmers will be a little more interested in fertilizing it properly if they have a longer time frame to fix it up and then make use of their soil improvements.

Was it in alfalfa, that could make it valuable for corn this year, the built up N in the ground. Was it a thin stand of grass hay, then probably best going into soybeans. Did it get worked up last fall, or will they need to no-till in a crop this psring into the hay?

This is a long-winded way of saying the rent you get will depend a whole lot on what exactly you are offering - what quality is the ground? :)

Getting late to get up to speed on getting the land ready to go, can't wait too much longer. Planters are idling everywhere around here, waiting for the ground to dry out.

It's common to get the money up front, or else a split payment - 1/2 now before planting, and 1/2 at harvest time. Not sure which way you go, the up front is nice as a land owner. Might be a few dollars less that way, but then you got the money, no wondering.

--->Paul

Thanks to all for the advice. I just wanted to get an idea of it. It was in hay due to
the previous owner, and now us, have horses so we needed the hay. I'm sure it will
need fertilizer since the hayfield was pretty much exhausted. It is easy access but
a 30' border is in CRP (Quail Forever--i did finally hear a bobwhite last summer ;-)
We have a big agribusiness that does organic looking at it and a couple of neighbors.
Neighbors would probably be doing GMO corn but one of them also does hay, so we
could trade like half for hay to get us thru the winter. That a plus!

If you think hay exhausted the soil, wait till you have row crops on it. That's not a move up!!!!

This may sound like a totally stupid question, but here goes:) When someone says "$300" per acre, they mean $300 per year right?

Around here I have heard people say and seen ads for $80-$85 per acre. I always assumed this meant per month, per acre. But that would be really high compared to $300 per year.

Thanks for any clarification!

C

Your state agricultural service should have a posting of average rents per area. At least, they do in Ohio. I got my renter to make a substantial upward adjustment thanks to that.

Here it means per year. Cash rent varies in different parts of the country because of land prices and expected crop yields. Around here $75 is the average for nonirrigated cropland.
In a good year crop share rent of 1/3-2/3 or 60%-40% might realize more income, but in a bad year at least you know what you will get with cash rent.

In out county in west-central TN it has been $30 per acre, per year, paid after havest for as long as I have been associated with the area - now going on 20 years. I have what is known as second tier creek bottom land. Bottom land goes for more.

On a separate hunting lease I rent out the wooded area for $3 per acre per year to a hunting club. I have been offered significantly more, but I know the guys in the group, they are local and friends. If they every give up the lease I will put it up for competitive bidding. For example, guy and wife across and down the road a bit are both school related (coach and counciler). He has mentioned to me several times he could easily get a group together to bid. I do require $1M insurance coverage for the club and have it separately on my whole farm.

I didnt say the hayfield caused the the soil to be exhausted, but that the
hayfield IS exhausted. Hayfields dont stay productive forever. This organic
business says they want to plant edamame soybeans. All I know is the DW
is super excited--claims the soybeans will do wonders for the health of our
soil in general...

They will leave a bonus ~40 lbs of N in the soil after harvest. Otherwise they take a fair amount of P and some K out if the soil just like any other crop.

Certainly a nice break from grass hay, will break up the weeds and such, so a good rotation for sure.

--->Paul

thanks for the info paul ;-)

Have each interested party give you a bid.Let them raise each others bid until you reach the value of your rent.I would have a legal binding written lease drawn up by an attorney.I had a lease drawn up and signed for my mothers land and it just renews every year if neither party wants a change.There are issues covered in a lease that you probably have not considered.Things can go wrong without a written agreement.

This ^^^^^ .The days of handshake agreemeants are over innorthern Iowa ,cash is mim. $ 180.00 per acre.

Crop prices are way up. cash rents are too.
Id say $250 a acre would be in the ballpark
Of course in this case location, EXACT location is critical. I know of two feilds side by side here. One gets $300 a acre cash rent the other gets$75
The $75 guy is paying to much.The other has a good deal.

this is a few years old, but it breaks it down by county.

http://www.extension.umn.edu/distrib...ent/M1195.html

Good idea. The neighbor says he would give $90./acre so we are waiting
on offer from organic company. (The neighbor will probably go up a little
since I told him we'd take half in hay ;-)

Thanks Paw...that was useful.

Ask them to replant the area for you in hay when they are finished, or at least leave the land ready for you to plant your own hay. That is what we did when we leased out an alfalfa field to a cropper for 3 years. They did beans, grain, beans and then planted our alfalfa hay for us.

Those prices are way out of date.Rent is higher now.

Keep things local, go with the neighbor!!

:clap::clap::clap::clap:

:thumb::thumb::thumb::thumb:

Great idea sheep! I will bring this up.

I've got some at 50/50 where I pay half of the seed, fertilizer, and such; and some at 1/3- 2/3 where I have to cash the check. Owner is always responsible for lime. It's pretty much a toss up between the two- in good years the 50/50 pays a little better but in b ad years.......

Apparently not. I went by the FSA office and they have the average
rent in the area at $120.00/acre. I will ask for 100.00 since they will
be having to use more fertilizer an such. Also, the organic company backed
out since they say the land isnt large enough track ;-(

on one 70 acre piece we get $35 an acre. Most of that is in corn and beans but there is a low spot that they cut for hay and then a little patch of woods. But they pay us $35 an acre/year for the entire 70 acres. I have another 7 acre hay field and I get all the hay I need for my 2 horses and the occasional cow that I feed so my hay costs are zero for those animals.

I'm in south-central MN, close to the really good farm ground. We're a little wet & a clay soil, so not perfect, but pretty good.

Just had a nearby farm rent out for $400 an acre, that sure makes a lot of talk in the coffee shops! Average is probably $200-225 this year, you heard of $300 last year but that was crazy for last year. But $400! Wow.

Kinda have to be careful of a $400 type deal, people swoop in from miles away, and farm the soil until the fertility is gone, then they leave....

Smaller patches of ground aren't worth traveling too far, and often have odd shapes or trees next to them, all of which makes them worth less. Trees are about the worst thing.

I got a 5 acre patch I run for my sister's estate, wow is it some good ground, better than my farm; but it's lines by trees on all sides, and the first 4-8 rows don't yield nothing much. Really makes a dent in that 5 acres, it's a big % of the field. I don't think I could pay 75 an acre for that ground and make it come out, too small, odd shapes, too many trees. And yet,s uch good ground...

--->Paul

I take care of my mothers 160 acre farm.It is excellent corn and bean ground.I asked our attorney what cash rent was running.He said he had written up nearly 70 contracts and they averaged $217 an acre.It ran from $140 to $350 an acre.Some family members and long time renters get cheaper rent.The greedy boys pay the high end.My mother rents to close neighbor brothers and she can completely trust them.That means a lot to her.

http://www.cffm.umn.edu/Publications...entalRates.pdf

http://www.extension.umn.edu/agbusin...Finbin2006.pdf

http://minnesotafarmguide.com/app/blog/?p=431