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AgLease101.org
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
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
Yield, bu/ac
60
55
50
45
1/2 Landowner
40
35
1/3 Landowner
1/4 Landowner
COSTS
30
25
20
15
1/2 Operator
2/3 Operator
3/4 Operator
10
5
0
AgLease101.org
Most productive land
Land Quality/Value
7
Least 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
Fixed Cash Rent Methods
•
•
•
•
•
•
•
•
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
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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
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10
Pasture Rental Arrangements
• 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
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11
Great resources for a variety of
programs…
• Annie’s Project
• Women in ag conferences
• Stand-alone meetings
Mobile Optimized
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16
Social Media Integration
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17
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