• 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

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

Share total returns in the same proportion as parties contribute inputs
Figure 2. Effects of Land Quality and Farm Costs on Crop-share Rental Arrangements
Operating cost, $/ac
30
25
20
15
10
5
0
Yield, bu/ac
60
55
50
45
40
35
1/2 Landowner
COSTS
1/2 Operator
1/3 Landowner
2/3 Operator
1/4 Landowner
3/4 Operator
AgLease101.org
Land Quality/Value
Least productive land
7
Most productive land

Fixed and Flexible Cash Rental
Arrangements
• Fixed cash rent methods
• Options to determine fixed cash rent
– Bid
– Auction
– Professional farm manager
• Putting flexibility in cash rent agreements
– Crop price
– Yield
– Input costs

• Cash rent market approach
• Landowner’s cost or desired return
• Landowner’s adjusted net-share rent
• Operator’s net return to land
• Percent of land value
• Percent of gross revenue
• Dollars per bushel of production
• Fixed bushel rent
AgLease101.org
9

Putting Flexibility in Cash Rent
Agreements
• Crop-share leases were the original flexible rents
– The scale of today’s operation makes share rents impractical
• Cash rents may be adjusted by market prices, crop yields and production costs
AgLease101.org
10

• Possible ways to delineate stocking rate
– By the head
– By animal units (both parties should agree on what an animal unit is)
– 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
AgLease101.org
11

Great resources for a variety of programs…
• Annie’s Project
• Women in ag conferences
• Stand-alone meetings

AgLease101.org
16

AgLease101.org
17