Lease Your Farm

Are you a farmland owner but not involved in farming? Is your farm leased to a local farmer? If so, what type of lease? Cash rent? Share rent? Flexible cash rent? Custom farming? Are you obtaining the best possible rent for your farm?

Are you a farmland owner and considering a land lease? Has your farm been assessed for capital improvements in the last five years? Our goal is to help you get the highest rent on property that will gain the best possible yields with the most cost effective capital improvement solutions.

If you own a farm, is it improved to gain the best possible yields? Do you have adequate surface and underground drainage? Do you have an adequate outlet for drainage water? Or, do you lose several acres every year to flooding/ponding?

Is your farm irrigated? Do you have underground water available? Have you thought about irrigation? Do you know that center pivot irrigation is now very automated? It can be operated from a tablet or cell phone. It can tell you when it is running, when it is pumping water-or not. It will turn off automatically. It can be setup with weather stations and soil moisture probes, which will assist is efficient irrigation on an ‘as-needed’ basis.

If your farm is leased--is your farmer participating in conservation practices? Are they utilizing minimum-till? Or no-till? Are they utilizing cover crops? Are they maintaining filter strips along drainage ditches to reduce nutrient runoff? Are they maintaining grass waterways to reduce erosion? Do you have land that should be in a long-term conservation program?

These are all questions that can/should be answered with good farm management.

Good Farm Management Questions

Example - Rental Rates:

From 2009 to 2013, cash rent rates more than doubled across much of the Midwest and nearly all property types! Did you take advantage? Did your cash rent double, or more?

Since 2013, rental rates have declined somewhat due to record production and lower grain prices. However, most rent rates have only declined by 10-20% from their peak. But, each geographic area differs. Plus, the quality of your farm soils will dictate the final and proper rental rate. If you have questions regarding the proper rent for your farm--we can help! We can analyze the income potential of your unique farm and illustrate the proper rental rate where both you and the tenant can be profitable.

According to the 2017 Illinois Farmland Values & Lease Trends, investors are still willing to pay a premium for top quality soil. Plus, while average Return On Investment (ROI) has dropped to 2.5%, since 2013, investors find it acceptable in an unstable economy. This year, it’s also expected that 54% of Illinois farmland will decrease in price between 1-5%, which may create a genuine opportunity for investors and operators, alike, to capitalize on.

Example - Capital Improvements:

Did you know that drainage tile improvements could increase your yield potential by as much as 15-20%? That is a corn yield increase of 30-35 bu/acre. Plus, yields are more consistent being able to handle the excess rain events. With this yield potential increase--how much can your rent rate improve?

With our vast experience in management across the Midwest, we can analyze the returns to this type of capital improvement showing you how it is possible to increase cash rents of convert to a flexible rent that will provide high returns to your investment. In many cases, those ROI’s (return on investment) exceed 8-10%. This type of investment in capital improvements could be a better alternative to buying additional acreage.

Example - Conservation Practices:

With government regulations constantly changing, conservation practices are becoming more mandatory. Nutrient run off into streams is a major problem in some watersheds. Is the problem coming from our farms? Do we know?

Monitoring of drainage water runoff is becoming a highly probable program for farms. If we, as farmers, can monitor our water runoff and test for nutrient losses we can gain the knowledge and know for certain if we are contributing to the problem. Conversely, if we do NOT know, we will not have the answers for those who want to ‘target’ the farmcommunity. Plus, if we learn of problems, perhaps we can institute more targeted fertilization programs that will reduce nutrient losses. Perhaps we can reduce our fertilizer applications while still maintaining high productivity? Perhaps cover crops could become a beneficial addition to our crop rotations?

Again, all of these examples are questions to ask and answer when properly managing your farm property for best possible returns. Plus, these are questions regarding how we can be both profitable and sustainable. How can we produce to the maximum yield potential, at the lowest cost, and while conserving our soil and the nutrients we apply for our production?

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