Ag Lease 101: A New Approach to Farm Lease Education 2013
Extension Risk Management Education National Conference April 3-4,
2013
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North Central Farm Management Extension Committee Farm lease
publications developed in the 1950s as regional bulletins Cash
leases Crop-share leases Irrigation leases Pasture leases Blank
lease forms included Distributed by North Central states and the
Midwest Plan Service Revised in the 1990s, again in 2012.
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Latest Revisions Done and posted Fixed and Flexible Cash
leases, Crop share leases Pasture leases In process Farm building
leases Breeding livestock leases Machinery and equipment leases
Proposed How to be a good tenant How to evaluate tenants
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All publications Are focused on developing equitable lease
agreements Discuss advantages and disadvantages of the lease type
to landowner and tenant Include examples for calculating rent under
different methods Describe methods for valuing contributions of
parties Emphasize need for communication Have been reviewed by ag
lawyers
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Fixed Cash Rent Methods Cash rent market approach Landowners
cost or desired return Landowners adjusted net-share rent Operators
net return to land Percent of land value Percent of gross revenue
Dollars per bushel of production Fixed bushel rent
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Other Options to Determine Fixed Cash Rent Bid Auction
Professional farm manager
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Putting Flexibility in Cash Rent Agreements Crop-share leases
were the original flexible rents The scale of todays operation
makes share rents impractical Cash rents may be adjusted by market
prices, crop yields, production costs, or a combination
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Establishing a Crop-Share Arrangement Share yield-increasing
variable expenses in the same percentage as the crop Adjust
arrangement as technology changes relative costs Share total
returns in the same proportion as parties contribute resources At
the end of the lease, compensate operators for portion of long-term
investments made that are not fully depreciated
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Pasture Rental Arrangements Possible ways to delineate stocking
rate By the head By animal units By pounds Important to agree on
the number, size, type of animals and grazing period duration
Establishing land owner and livestock owner contributions Cash,
share of gain, price risk adjustment
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Great resources for a variety of programs Women in ag
conferences Stand-alone farm lease meetings Annies Project series
Farm real estate conferences Webinars Client requests
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The Next Step.. Additional publications and lease forms More
FAQs Links to other farm leasing materials Additional regional
webinars for educators Sample flexible leases Survey of farm
building rental rates
