Farmland Leasing- Do's & Don'ts

I have 51 acres of tillable on our deer hunting property, bean and corn rotation. The previous farmer passed away and was salt of the earth, he would hunt me down every year to get that check in my hand and give me a raise when prices went up. The new farmer would like to enter into a lease agreement in lieu of a handshake, I can understand his logic as he plans to employ an agronomist to enhance the soil substrate and invest for future yield. I do not view this as a revenue stream- I view it as food plot sources that help pay taxes

The first rudimentary question is: I assume I initiate the lease as the lessor?
After that, what duration is typical -5years?
Should I put in an escalation clause?
Interested in what others have seen or experienced with farmland leasing… the Do’s and Don’ts

If you do a contract just know what goes with a lease, here the hunting rights do go with the lease unless otherwise stated in the contract, a lot of people don’t understand that.

5-7 year contracts are common here. was alot of turn over in rentors/farmers in the last few years when commodity prices were poor along with a fair amount of non-payment. but with prices on corn and beans both coming out of the field last fall and for current delivery/pick up things may been a little different now.

as lawdog said, make sure you know or have spelled out what happens to the hunting type access. most of the big farmers renting here could careless about the hunting and will be happy if it stays with you so that they dont have everyone asking them for permission. however, that isnt always the case with every farmer leasing so keep that in mind. in some areas here the hunting leases generate better revenue than the tillable

just another thought, if it was me i would talk with a few area property owners that are in contracts with farmers that may operate differently than the fellow that rented yours prior. if you have an idea who might be renting next, i'd talk to the owners where he is already farming if you arent familiar with him. there can be some interesting things that just happen---like prices sky rocket and the property owner feels left out particularly if locked into lease when neighbors are being renewed or extended at much higher $ per acre. some farmers here routinely give the owner a little extra in the good years, others do not. Then there is the flip side when prices tank and the property owner expects the farmer continue maintain fertilizer etc to the field. that was a pretty contentious situation around here in the last few years; some farmers continue upkeep even when it hurts their bottom line, others do not even when its spelled out in the contract. and some contracts have clauses that kick in with landowner sharing that cost. Lots of agreements here get into details of who is on property, who is covered by insurance, etc

This ^^^^^. There has only been one incident of conflict while trapping. It was settled quickly with a phone call. The hunters and myself have been able to workout a good working relationship when it comes to “sharing” the property.

I will note that the farmer has informed me that’s great if it works for me but not necessary because he’s the one paying the bills. GET THOSE FOXES!!!!

Anyone ever wonder what the grower is putting on their land? If I were to rent my plow ground out, their would a one year renewable contract at harvest, also I would require a complete list of inputs. Along with a list of prohibited inputs, ie; Atrazine, furadan, etc.

Most farmland leases here are 1 year.

3-5 year would be great if the lease is a flex based lease (high prices and higher yield = higher rent)

If your concern is not monetary for the land, and being only 51 tillable acres, just tell tell the farmer you want fair rent.

You include/exclude any and all rights on the property into the lease (trapping, hunting, fishing, etc.)

Having a contract protects you and also the leasee. Most state extension offices have very basic farm land lease contracts you can print off their websites.

As always- really good feedback
I would definitely have a "No Hunting" clause in the contract, the new farmer runs bear dogs- yes, he has a lot of his own property but I wouldn't want to include my acreage in that.
Diggerman- That's a concern, I'm wondering if the local USDA Office would have a list of those toxins or prohibited chemicals? or make the contact contingent on those input approvals.
I've also heard about farmers that sell seed, dumping weed seed on leased properties, I wouldn't want that blowing across my fields and I'm not sure of the consequences but doesn't sound desirable.

Bryce might be a good source to PM if he doesn't weigh in on the discussion.

You can put into the contract which seed/grains are allowable to be grown and also list what crops are not allowed.

Consider how much you charge and if it is fixed or variable. Since you said it is to pay the taxes and not for profit you can go 1 of three ways. A fixed price per acre puts the risk on the farmer, you make the same amount every year and know you can pay your taxes but may miss out of some extra cash in bumper years. A variable puts the risk on you - if the farmer makes no money one year then you make no money and pay taxes out of pocket. A hybrid would be you set a minimum price for the lease (enough to cover the taxes) and then a sharing agreement if he goes over a certain yield.

If I was the farmer and planned to make soil improvements I would want a multi-year lease, or at least an option with first right of refusal for renewing annually.

https://www.agriculture.com/farm-ma...and-distribution-at-death-but-what-about

Another good consideration- Hemp probably has limited browse nutrition. It's been corn and beans but rather see it in writing

Get references on the new farmer. Ask at the local farmer’s exchange, ag coop, or seed dealers.

A guy around here who rents a great amount of land pays slowly, forgets to pay, or just never makes money on the rented land so does not pay at all. He hooks people until they wise up. Some people never wise up. The guy makes a lot of money.

Another guy, actually a neighbor rents land and does very well. He pays his landowners accurately and on time. A few years ago, he built a very nice new house.

A straight cash rent with stipulations on crops, chemical use, access rights in writing makes the most sense to me. Research what cash rent is in your area based on land productivity and see if that covers what you need for taxes and go from there as to what to charge. Your county extension office should be able to help you with this. For 51 acres too many restrictions may not appeal to many farmers but it is your land.

Around here they lease for a certain amount per acre. Hunting rights are or are not included. MOST the hunting rights are separate. Farmers lease the hunting rights separate even more income. Corn , beans are around 150-190 per acre depending on ground. TOBACCO IS 200-225 per acre !!!!

3 year contract is norm.

For Gods sake don't take advice here. Laws vary in every state, as do the specifics of standard leases. For example when people tell you the hunting rights go with the lease. The heck they do, the only way they are part of the lease are if they are written in and both parties agree. It's is entirely unheard of around here, the ONLY thing that goes is the right to farm the ground. Talk to a local lawyer that is familiar with ag leases.

$300 is common here. A large renter can get his seed, fertilizer, etc. cheaper in bulk as he covers thousands of acres. Contract is year to year renewed. We now have $5 corn and $13 soybeans. Corn yields are 200+ bushel per acre . Soybeans yield 75+ bushel per acre. So we both are happy for now.

As someone who buys feed I'm not happy!

Do some research, If you are a bee keeper or raise birds, then absolutely No insecticides or neonics. If you have a well in the area, no Triazines, if you have Hel soils , no soybeans, or very limited.
After planting in the spring, drive by on a sunny warm day. Look over the fresh ground and you will be able to watch the off-gassing of chemicals from most grain farms, sit there for a while and take note of the animals and insects using those fields. yup, none.
If you need the income, then you will have to put up with it, if not and you value your land, set your standards, stick to them.

I am not experienced with the hunting and or wildlife aspects of leases but most leases in WI are for 3-5 years as that is typically a rotation, especially the longer years if alfalfa is in the mix. Sounds like your farmers don't raise alfalfa. Not many crop share leases in WI, mostly cash.
Most that I dealt with did not have increases or decreases during the years of the lease contract. Those were done when terms were up.
Get pay dates down and decide if you want annual payment or more frequent payment
The contract should have some statement regarding late payments or lack of payment or an offer below the agreed upon and signed value.
Grounds for termination of the lease are important for both parties.
Don't know what you have been receiving for rent per acre but some good sources may be lenders, farm financial accounting firms UWEX ag agents and FSA office if you want more information and data. The county ASCS off ice may be helpful as well.
Remember that all the commodity and subsidy payments go to the grower of the crops unless specifically stated otherwise.

Bryce

You do know they spray for weeds after planting and some again after its up don't you . So don't know about scattering weed seed never heard that. weeds occur naturally on corn after it's picked/ But then it will die next year when sprayed.
Don't lease to a seed farmer !!! LOL

Don't know which or what kind of land you got there. But when I check trail cams around beans here the bugs are awful.
Lease it for all you can. Bugs be ok .

I was going to share the same thing...at least here in Iowa you could reach out to an ag extension office to get some basic guidance. I assume other states have similar??

Advertise your land as for forage crops only, such as alfalfa and give a preference to those who haul in manure.