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Thread: Farmers/Landowners!! How much per acre??

  1. #1
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    Farmers/Landowners!! How much per acre??

    I thought this may be a good place to ask as I know we have some farmers and landowners here.

    For FARMING purposes only:
    What are you paying/recieving on a per acre basis for tillable ground?
    What are you paying/recieving on a per acre basis for pasture (if anything at all)?
    How is the contract structured? A fixed price no matter the yield? Or is it yield dependant? (more crops=more money for landowner)
    What area are you in?
    Do you also lease to hunters?

    The reason I ask is we have a 150 acre property mixed with woods, pasture and tillable ground where the lease price to the farmer hasn't changed in over 17 years. The farmer unfortunately passed away and we are negotiating a new contract with a new farmer.



    I'm sure things have changed quite a bit so let me know if you have any insight on contracts.

    Any help or additional thoughts would be appreciated.

    -Dave


  2. #2
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    This year I am receiving $125 per acre from the operation that is cash leasing the land. There was a bonus structure for higher yields, but that's not going to happen this year. Oh yeah, and I gave up subsidy rights to the operation, which is OK by me since they took all the risk.
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  3. #3
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    In Arkansas, Most Farmers pay cash rent at 100-150 depending on soil type, water structures, quality of fields such as leveling or put on a grade. If it is not a cash rent then some use share cropping at different rates, most common is probably a split somewhere around 80/20 on expenses and revenues. For hunting, most land owners in Arkansas retain all hunting rights or lease them seperately for ducks.

  4. #4
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    Cash Rent is relative to the quality of the ground. Shares is usually done 1/3 land owner 2/3 farmer. Hunting lease $10-$30 per acre also depending on the quality.
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  5. #5
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    Ohio - I can answer a couple of those - but maybe you should ask over in the sub forums food plot section as well. Tillable acres here in W Central Ohio, with GOOD dirt, can bring $300 acre cash rent. That is the top number I have heard lately that is not just rumor. Most acreage is closer to $150 to $200 acre/yr. By the way, my acreage is all in CRP, which brings me only $90 acre/yr. But it is NOT good dirt. It is hilly and rocky and highly erodable - thus a CRP candidate.

    I don't know any locals who cash rent pasture land right now, but I can ask around. With the price of hay going up, there may be a decent possibility to rent to a livestock farmer who makes hay already in your area. At our camp in Meigs County, my pal allows a neighbor with horses to make hay on 25 acres of bottomland for free - just to keep it mowed.

    You were not thinking fenced pasture for livestock were you? As a landowner, I do not think I would want that.

    As far as land rent contracts - there are quite a few ways to structure it. The simplest for everyone, and the most common around here, is a straight cash price per year no matter the yield. The next most popular is a 50/50 split on expenses and yield income, but keeping records is a beetch for the farmer - and there is a possibility for petty or even major squabbles and hard feelings down the pike.

    Lastly - contracts I hear about are usually minimum three or four years - sometimes longer. As a landowner you cannot expect a farmer to only think in annual terms. He rotates and fertilizes and does other work - sometimes tiling (field drainage) - thinking about several years ahead. I think I would offer a farmer a three year rent contract at a set price, with options on both sides at the end of that time.

    Good Luck - you have a nice position in the driver's seat.
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  6. #6
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    Really appreciate all the quick input. It's quite helpful.

    What about annual increases? Is this typical? or only when the contract is renewed (after 3-5 years)??

  7. #7
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    Here in Indiana I get $200 an acre cash rent from my farmer and I think that is very much on the low side. Will proabably go up next year. I do not have anything in the contract based upon yield. Good thing. This year is going to suck due to the drought. I'm hearing 80 bushels per acre on corn, probably...
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  8. #8
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    The best way to do it in your situation is cash rent it imho. Do sealed bid packets and let all the farmers who want to farm it offer you a price. Then you pick the one you like the most.

    For kansas you are lucky to get 35 a acre for dryland wheat. 65-85 a acre for good bean ground. Pasture here used to be 14-15 bucks a acre and fencing supply's cut in half.

    Contracts in kansas are on a yearly basis. March 1-march 1
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  9. #9
    Good ground in East Central IL will see 250 to 300 per acre. Remember you only get paid for TILLABLE acres so if you got a 120 acre field (rarely is it ever exactly 120acres) and you have 10 acres of CRP then you get paid for 110 acres.


    Crap ground around here goes in the 200 or less per acre....


    But its really just up to the landowner on how much he will accept then finding a farmer to pay want you want. Some of the bigger guys can splurge on a field or 2 in cash rent if its in the right area.
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  10. #10
    I have been quoted 180 in a CRP contract on my farm ground which we get 225 for in crops. Trying to get the family to put in the CRP!
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  11. #11
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    So if a landowner has 500 acres of tillable ground and they lease it to a farmer for $200 per acre, then that landowner will get $100,000 per year?

  12. #12
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    Quote Originally Posted by BP1992 View Post
    So if a landowner has 500 acres of tillable ground and they lease it to a farmer for $200 per acre, then that landowner will get $100,000 per year?
    And he wont have to lift a finger except pay taxes on it. If a person has the money buy all the land you can and cash rent it out. It will make the yearly payments for you, and basically pay itself off. I've never seen land value drop much haha.
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  13. #13
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    I get $150/acre in north-central IL. My bigger issue is to have a farmer on contract that won't destroy my land and knows how to farm. The guy I have is also a deer hunter so I can get help/advice on food plots and the use his equipment for that as well. So be sure to look at the big picture and hire someone you can get along with. It is a business venture no matter how you slice it. I avoid the 50/50 routine that some guys do on cash rent agreements. Our farm doesn't have good dirt that's why the price is lower than several listed on this thread. I would check with your local Farm Bureau or even a local ag office or even the local farm credit union since they have people that really know the values of your local area.
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  14. #14
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    Quote Originally Posted by BP1992 View Post
    So if a landowner has 500 acres of tillable ground and they lease it to a farmer for $200 per acre, then that landowner will get $100,000 per year?
    Yup! But........you might pay $4000 acre to buy that land, so the $200 acre rent income is a 5% return on investment, not even figuring in your loan interest and taxes and other annual expenses. Not great - not terrible. Get a local platt book with landowners names, and you might see more corporate and LLC landowners than you think. I know some MDs and other professionals putting their $$$ in tillable land lately. Better than stocks and bonds the last few years. Pisses off the local grain farmers however, which I fully understand.
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  15. #15
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    sorry to hijack, but what are the advantages of an LLC/LLP? i noticed most of the land around mine is either an LLC or LLP. ours is just in our families name.
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  16. #16
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    Quote Originally Posted by wango tango View Post
    sorry to hijack, but what are the advantages of an LLC/LLP? i noticed most of the land around mine is either an LLC or LLP. ours is just in our families name.
    Tax rates and limited liablity if multiple owners. If one fails all of you dont go down.
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  17. #17
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    Wango - if your family farm is all in ........ maybe your Dad and Mom's names..........if they should pass suddenly Heaven forbid, the estate goes to probate court. You have no choice. Then the lawyers get a big bite, and some land may have to be sold or split up. Please get some advice from a local trusted attorney about a Limited Liability Corporation or a Family Trust.
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  18. #18
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    that is exactly why our farm in a a family trust
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  19. #19
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    In Illinois, good soil will bring up to $400 an acre for tillable when you have the right group of farmers in the area. $250 is pretty common for decent ground. Pasture ground is usually in the $25 - $35 an acre range.

  20. #20
    (Iowa) I'm getting $180 for tillable, $75 for pasture, and if I remember correctly, maybe $165 for CRP....might be wrong on that.

  21. #21
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    Quote Originally Posted by sleeperls View Post
    And he wont have to lift a finger except pay taxes on it. If a person has the money buy all the land you can and cash rent it out. It will make the yearly payments for you, and basically pay itself off. I've never seen land value drop much haha.
    It's obvious by your post you are young and don't fully grasp the risks involved in owning land or the financial concerns with borrowing money to invest in land.

  22. #22
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    Ohio shooter, you should get a hold of the figures from your area and compare soil types to cash rent figures. There should also be standard leases you can take a look at to get a feel for what you want. Talk to other and owners to see what they are doing.

    Protect yourself, not all farmers are the same.

    Put some requirements in the lease to keep the farmer from mining the soil. A simple soil test before and after the lease with provisions to be at or above current levels is simple for both parties to understand. Might as well throw a ph and rotational requirement in if you feel it's needed

    Some farmers will mow everything up nice, others see it as a waste... Might as well put it in the lease so all parties fully understand everything.

    If you would like the option of "buying" some of the standing crop back to leave for wildlife, discuss it before signing the lease. Better yet, put it in the lease.

    Here many landowners prefer a straight cash payment on a 3 year deal, it's simple, quick, and easy. Some farm on shares, with many more details involved, as it lets the owner stay involved with making decisions. With the high risks involved on the farmer's side, a base price per acre with a "Yield bonus" is becoming more popular as it's becoming a very fair and honest way of covering both parties risks while sharing the reward.

  23. #23
    Quote Originally Posted by ohioshooter68 View Post
    the lease price to the farmer hasn't changed in over 17 years.
    Ouch! You missed out on a lot of money. Rent has gone up a lot over the last 17 years. Contact your local County Extension. They track cash rent rates and can give you good info on current rates.

    Don't lock yourself into 1 farmer and then negotiate. Some just can't do what others can $ wise. Instead open it up for bids and then figure out which of the high bidders you want to do business with.

  24. #24
    Here's a link to your county extension

    http://athens.osu.edu/staff

    Enter "cash rent" into the search bar on the linked site and look through the various hits.

  25. #25
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    Quote Originally Posted by BP1992 View Post
    So if a landowner has 500 acres of tillable ground and they lease it to a farmer for $200 per acre, then that landowner will get $100,000 per year?
    Actually here it will bring 300-350/acre for cash rent. However to buy it will set you back between 8,500-9,000.00/acre.160 acres sold here a week ago,the tillable acreage brought over 9k/acre
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