Posts filed under ‘cash rent’

Tips for Obtaining County Cash Rent Data from NASS

Thanks to the folks at National Agricultural Statistics Service (NASS), we now have county-based cash rent information.  I’ll save you a few steps if you are interested in cash rent for Van Wert County. The cash rent for marketing year 2008 was $126/acre.

Here is the procedure I recommend you use to get the data for your area:

1. start at the NASS homepage http://www.nass.usda.gov/

2. navigate to the left sidebar and click on ‘Economics’, which brings you to this page http://www.nass.usda.gov/QuickStats/indexbysubject.jsp?Pass_group=Economics

3. select ‘cash rents’ then hit the search button

4. Select: County Cash Rents Data Query –

5.  Under “Select Location” – “Locale” select: COUNTY

6. Under “State” select: OHIO (or whatever state you have an interest)

7. You can select an individual county but I recommend you skip that and go to the bottom and select: Get Data

This will give you county by county cash rent averages from this Ag Stats survey for the entire state.  From what I can see based on Van Wert County, this data is fairly representative and is a good place to begin the cash rent negotiation process.

May 4, 2009 at 11:58 am

County-Level Cash Rent Data To Be Released May 1

Getting accurate and reliable cash rent data is sometimes challenging, and it looks like we might have another good source in addition to OSU.  The below news release is from NASS:

The National Agricultural Statistics Service (NASS) will publish county-level data on cash rental rates for agricultural land on May 1 at 3:00 p.m. EDT.

The information will include average rental rates for non-irrigated cropland, irrigated cropland and pastureland during the 2008 calendar year. NASS is providing the county data in response to requests from customers as well as the new requirements of the 2008 Farm Bill.

Since 1997, NASS has published land value and rental rate data at the state level. The release on May 1 will mark the first time NASS is publishing the information at the county level.

The data will be based on information NASS gathered from 700,000 agricultural producers nationwide during the 2008 end-of-year surveys: the biannual cattle survey, the biannual sheep and goats survey, the quarterly crops/stocks survey, the annual acreage and production survey, and the first-ever county-level cash rents survey.

The county-level data on cash rental rates will be available online through Quick Stats, NASS’s agricultural statistics database, at www.nass.usda.gov. Users will be able to access cash rental rates at the state, county or crop reporting district level.

I’ll check the data and examine how it compares with my own research.  If there is much of a discrepancy, I’ll post about in this blog.

April 29, 2009 at 8:30 am 2 comments

Terminating Farm Leases in Ohio — Is There a Date That Leases Must Be Terminated?

Often I overhear a conversation, or am sometimes flatly told, that if a farmer has his or her inputs purchased for a rented farm by March 1 a farm lease cannot legally be terminated by either party.  In Ohio, as of the date of this post, this is not true. It is true that some states do have legislation or statutes that provide a date, but Ohio is not one of those states.  From the OSU Ag Law Newsletter, Fall 2007:

If the parties do not have a written lease covering notice of termination, Ohio court made law would come into play to determine the proper notice period in the event of a dispute. Our courts vary on the notice period required for a year-to-year farm lease-from three months to six months. Based on these court rulings, parties to a farm lease in Ohio should consider providing a six month notice of termination. If proper notice is not provided by one party, the other party could legally argue that the lease should continue for another lease period. A statutory law stating a specific notice period for farm lease termination could help prevent disputes over whether adequate notice has been given.

The above piece was written by Peggy Hall, Director of the OSU Ag Law Program, and has not changed since she wrote it in 2007.  There is a local custom that landlords and tenants may follow.  The local custom in Van Wert County is to renogotiate leases late summer or following fall harvest.  However, without anything in writing a lease could technically be renogiatiated at anytime.  OSU Extension strongly recommends putting any lease agreement in writing to avoid the ambiguity of farm lease termination.  Don Breece, Robert Fleming, and later,  Peggy Hall, have developed an excellent resource for farm leases:  http://aede.osu.edu/programs/aglaw/docs/FarmLeaseFactSheet2008.pdf.  In addition to that resource, there is a very east-to-follow checklist developed by Don Breece at http://ohioline.osu.edu/fr-fact/0003.html

Finally, for the latest in changes or updates in farm leases I recommend you subscribe to the Ohio Ag Manager newsletter at http://ohioagmanager.osu.edu/services/email.php. Ohio Ag Manager is a monthly newsletter from OSU Extension that focusses exclusively on farm management issues in Ohio.

April 14, 2009 at 7:30 am 2 comments

Ohio Farmland Cash Rent for 2009

Barry Ward, Ohio State University’s Leader in Production Business Management, has very recently released data for Ohio farmland cash rent.  Ward reports that Ohio cropland values are falling, with cash rents leveling off to slightly up.  Data is taken from the “Ohio Cropland Values and Cash Rents” survey, which is conducted annually. Surveyed groups include farm managers, rural appraisers, agricultural lenders, OSU Extension Educators, farmers, and Farm Service Agency personnel. Van Wert County is considered northwest Ohio, so preliminary results shown below are for Northwest Ohio (NW Results).

NW Ohio Cash Rent 2009

Table 1. NW Ohio Cash Rent predicted for 2009 (click image to enlarge table).

The table shows the simple average of the data  (Avg), as well as the standard deviation (Std) of the data for that measure. In addition, the table also shows the average plus one standard deviation (Avg+Std), and average minus one standard deviation (Avg-Std). These latter two numbers reported indicate a range within which about two-thirds of the responses in the data for that measure will fall.

The full report for Ohio is available in the February, 2009 Ohio Ag Manager Newsletter:

http://ohioagmanager.osu.edu/news/archive/2009/0209b.php

February 10, 2009 at 7:00 am 4 comments

Flexible Cash Lease Calculator Available from OSU

Barry Ward, Ohio State University Production Business Management Leader, has developed a flexible cash lease calculator for farmers and landowners.  The calculator is available as a Microsoft Excel worksheet:

http://aede.osu.edu/Programs/FarmManagement/Budgets/download.htm

This flexible cash lease tool is intended to help landowners and tenants agree on terms of their flexible cash lease. Unlike other tools available at other schools, this tool allows the user to do more than just flexing for price and yield. This tool includes the opportunity to input costs of inputs that would affect the terms of the lease.

The Input Page is the section of the calculator where the user inputs their particular production numbers. This page has several different sections where user input is required for an accurate estimation of a flexible rent. The information you need to have available to use the calculator includes: previous rent information, yield history, fertilizer input costs, chemical input costs, diesel input costs, seed input costs, and any other relevant input costs.

The Output Page documents four different methods of calculating your flexible cash rent. The different methods include flexing for price only, flexing for price and yield, flexing for price and input costs, and flexing for price, input and yield. In all four methods, the Total Rent per Acre line is the suggested flexed rent per acre for the land for the end of the growing season. Choosing which method to decide rental rates from will come from negotiation between land owner and tenant.

Podcast available here:

December 10, 2008 at 7:00 am

Flexible Cash Rents Becoming Common

I know that some farmers have spent the better part of 2008 working on trying to get some of their fixed cash rent acres converted to flexible cash rent acres. And, fortunately, many landowners are open and receptive to the idea. The move to flexible cash rents is gaining momentum not just in my neighborhood, but across the Midwest as operators look for ways to stop the flow of red ink in the coming year. Ohio State University Extension has been providing flexible cash rent resources to farmers for years. Specifically, the OSU Factsheet written by Robert Fleming (retired) and Don Breece provide much of the framework for establishing flexible cash rents (http://ohioline.osu.edu/fr-fact/0002.html).

On the other side of the negotiating table, landowners, seeing higher profitability in commodity crops, are seeking higher cash rents. So, just what is that “most equitable” cash rent amount and how can it be maintained from year to year or contract to contract? One answer is negotiating a flexible cash lease arrangement that varies from year to year based on price or yield or a combination of the two. Price and yield deviations from an agreed upon starting point (base rent) will trigger additional rent in the case of higher prices or yields or possibly lower rent in the case of price or yield shortfalls.

One of the most comprehensive and current articles I have seen on flexible cash rents was written by the Ag Decision Maker team of Edwards and Johanns. Their article “Flexible Farm Lease Arrangements” was written in August of this year and provides some excellent examples of flexible cash rents (http://www.extension.iastate.edu/agdm/wholefarm/html/c2-21.html). The examples are Iowa-based, but they can provide the groundwork for you to establish a flexible rent in Ohio. Edwards and Johanns point to three benefits of utilizing flexibility in a cash rent. The most important benefit, in my opinion, is that risks are shared between the owner and the operator similar to a crop share arrangement. But unlike the crop share arrangement owners are paid in cash, they do not have to be involved in decisions about crop selection, fertility inputs, grain marketing, etc.

About a year ago there were several questions that were brought up regarding government payments under a flexible cash lease arrangement. The Farm Service Agency specifies that certain flexible cash lease arrangements are in fact “crop share leases” and certain government payments (direct and counter-cyclical payments) will be divided up between tenant and landowner according to the risk each bears in the production of crops on the leased parcel. To comply with FSA guidelines tenants and landowners need to do one of two things. First, landowners need to provide a copy of the flexible cash lease to their county FSA office, and request approval for the proposed sharing of the direct and counter cyclical payments. Second, they need to structure the flexible cash lease so that it is defined as a cash lease arrangement under FSA Guidelines. See the below example for clarification.

Example: A lease states, “The annual rental payment is $150 per acre, but in the event that average corn yield for the county exceeds 170 bushels and/or the average cash price at the local elevator for the months of September, October, and November exceeds $3 per bushel, the rent per acre shall be $175 per acre.” This lease would be considered a cash lease because the bonus payment is not tied to a specific yield on the farm nor the price received for that specific production. In cash-lease situations, the tenant is eligible to receive 100 percent of government payments for the applicable farm, provided all other program eligibility requirements are met.

For more information on flexible cash leases, please visit the April, 2008 issue of the Ohio Ag Manager website at http://ohioagmanager.osu.edu/news/archive/2008/04-08.php.

December 1, 2008 at 7:00 am 2 comments

Cash Rent of Publicly Owned Ground in Van Wert County, Ohio

Cash rent continues to dominate local conversations. In fact, during the recent Farm Tour in Van Wert County there were several references to cash rent for farmland. Several months ago, I called to get the cash rent information on Van Wert County’s publicly owned lands.

Parcel: Van Wert County Farm (adjacent to the old county home)
Acres: 305.4
Per Acre Cash Rent: $191.91
Term: 2008, 2009

Parcel: Airport
Acres: 131.6
Per Acre Cash Rent: $131.13
Term: 2007, 2008, 2009

July 25, 2008 at 7:00 am


Notice

This blog is no longer being maintained. Information on this blog may still be relevant, but for the latest agronomic information and farm management information please visit http://corn.osu.edu and http://ohioagmanager.osu.edu, respectively.

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