University of Maryland Extension Farmland Leasing Arrangements Jenny Rhodes – Queen Anne Shannon Dill, - Talbot John Hall - Kent.

University of Maryland Extension

Farmland

Leasing

Arrangements

Jenny Rhodes – Queen AnneShannon Dill, - Talbot

John Hall - Kent


Farm Lease Agreement

Written agreementComponents


Lease Components:

1.Names of Parties and description of property

2.Term of Lease3.Rental Rates and arrangements

a. Crop-share *b. Cash Lease *c. Flexible cash lease *d. livestock share leasee. Farm Machinery, equipment

and building leases


Lease Components Cont.:

4. Farm operating expenses5. Conservation and Improved Practices6. Improvements and repairs7. Records8. No Partnerships statement9. Right of Entry10. Arbitration ( settlement)11. Additional agreements and

modifications12. Signatures


You need to have a written agreement

The purpose of this presentation is to provide tenants and landowners basic information needed to write rental agreements. Changes in the structure of production agriculture have increased the need for persons entering a contractual rental arrangement to have a written agreement. Additionally, rental agreements should be updated regularly to incorporate changes in government programs, environmental regulations, costs of production and revenue received


Value of a written lease

The value of a written contract is in helping theprospective landowner and tenant think about andagree upon the essential considerations of leasing andoperating the farm.To arrive at an equitable lease, the interested partiesshould talk over the basic considerations involved in theleasing arrangement and in managing the farm. Theyshould then make a contract, preferably written, basedon these considerations.


1 – Names of parties and description of property

Every lease should identify the parties entering intothe lease contract and give the legal description of theproperty or properties involved. In addition to the legaldescription, information such as the distance and

direction from town, road name, mailing address and popular name of the farm might be given.


2 – Term of leaseThe term, or length of time the lease is to be in effect,

should always be agreed on and should be stated in the contract.

The term of the lease is important. A long-term leaseis often necessary to develop a profitable business overtime because of the need for permanent capital

investments.The tenant will not want to share investment inpermanent facilities on a short-term lease. Usually,landowners favor a short-term lease on the basis that alonger-term lease lowers the market value of the farmbecause it cannot readily be sold. This problem can besolved by including a termination clause that wouldapply in case the farm was sold.


The lease agreement can be for either a one-yearlease or a longer lease, as desired. Most agreementsinclude an automatic renewal clause and allow someflexibility in the terms of the lease if the parties undercontract give adequate notice.

Renewal:a multi year lease is automatically renewed unless a termination notice has been submitted.

Lease dates: Typically a lease runs for a calendar year. However, this may vary


• Termination of lease

1. It is recommended that a termination notice be given by July 1 of the growing season.

2. If termination is given, the operator has the right to harvest all crops currently growing on the given land.

3. If there are crop input costs for crops currently growing, these input costs should be addressed at the time of termination.


In some communities, it is customary to give noticethat the lease is to be terminated before wheat sowingtime in the fall or by March 1 in the spring. But failureof either party to give this notice does not necessarilyindicate a desire that the lease be continued.Consequently, it is desirable to state in the contract theprocedures to be followed for terminating or continuingthe lease contract.


3 – Rental rates and arrangements

Rental rates and arrangements for payment or disposition of the rent are a significant part of any lease, whether written or oral.

Basically, there are five methods of paying rent:a. crop-share rent – “share crop”b. livestock-share rentc. cash rentd. Flexible cash rente. farm machinery, equipment and buildings rent –

“custom farming”


a. Crop-share rent – Characteristics of a crop-sharelease are that each party receives a share of the crop asearnings for their contribution in land, labor and capital.Normally, crop-sharing involves grain crops such assmall grains, corn, and soybeans and land used toparticipate in government programs. Remaining areasused in producing forages (hay and pasture) are normallycash rented.The landowner’s share of the crop depends on thecontribution made toward production of the crop. Whencrops are divided 50-50, the landowner normally pays50 percent of the cost of fertilizer, seed and chemicals inaddition to providing the land. In other instances, thelandowner may or may not share in cash productioncosts and receives a 1⁄4 to 1⁄3 share of the crop as a returnto land.


.b. Livestock-share lease – Livestock-share leases varyconsiderably because of differences in contributionsmade to the business by each party. The owner normallyfurnishes land and buildings, while the tenant furnishesmajor portions of the crop machinery. Livestock isowned jointly. Production costs such as feed, veterinaryand medicine, other livestock expenses, fertilizer, seedand chemicals are shared equally.Livestock machinery and equipment may be jointlyowned. Labor costs are shared according to the agreement,as are repairs and upkeep on permanent buildings.The landowner usually pays for construction ofpermanent buildings, or arrangements are made toreimburse the tenant in case the lease is terminated.Livestock and crop sales are divided according to theterms of the agreement


c. Cash lease – The cash lease is normally uniform andrelatively simple. The tenant pays the landowner a cashsum per acre or a lump sum for his or her investmentin farm resources. Provisions in the lease generally statethe terms of agreement. For example, the landownermay place restrictions on the use of land or fields for certaincrops. Also, the agreement might state the degreeof productivity to be maintained. Provisions should alsostate the amount and method of paying rent.

degree of productivity: The definition may need to be defined as part of the agreement. It is assumed that this definition reflects the soil nutrient values. Soil tilth, erosion and other soil parameters may also be addressed


d. Flexible cash lease – The flexible cash lease is ahybrid of the cash lease. The flexible cash lease agreementstates that the tenant will pay in proportion toeither or both the price and the yield level. There are many methods for flexing the rental agreement. Themost common method is flexing gross (or net) revenueso that the tenant and landowner share the risks associatedwith cash renting. If revenue is greater than theestablished base level, the tenant and landowner sharethe excess revenue. If revenue is less than the establishedlevel, the tenant and landowner share the lost revenue.However, often there is a cash lease price floor that thelandowner is guaranteed. Other types of flexible cashrental arrangements include flexing only price or yieldor flexing both


e. Farm machinery, equipment and buildings leases –Renters have found that leasing unused resources canbe cheaper than making new capital investments. Also,producers have found in certain situations leasingmachinery and equipment from dealers can be cheaperthan purchasing. Additionally, machinery and equipmentleasing arrangements can be between renters andowners to allow the renter to avoid paying full valueand the owner to generate revenue to cover the ownershipcosts. Renters need to compare the size, condition,obsolescence, use, location and lease cost of the capitalgood versus the cost of purchasing the capital good outright.Owners are primarily interested in recoveringownership costs. The lease price should equal theamount needed to cover ownership costs and variablecosts, such as upkeep costs incurred from renting thecapital good. Both renters and owners should considercurrent value, depreciation, interest, insurance andtaxes, inflation, repairs and maintenance when agreeingon a lease value.


The cash lease is the most common. The secondmost often used is the crop-share lease. Flexible rentalagreements are increasing in use as tenants seekto share downside revenue risk with landowners andlandowners seek to capture upside revenue potential.The rental arrangement for each specific farm should bedeveloped to fit the farm and the planned operating

procedures.These conditions are known best by the landowner and

prospective tenant, so they should work out the most satisfactory arrangement between them. No standard lease form can be used to develop an equitable rental agreement. The function of the form is to record operating procedures agreed upon by the parties entering the contract.


4 – Farm operating expenses

Reaching agreement on farm operating expensesprovides an opportunity for the tenant and landownerto discuss and designate the share of cash productioncosts that are to be paid by each party.

We have shared Custom rates and budgets with you

Soil Ph / Lime may fall into this area and needs to be addressed


5 – Conservation and improved practices

To improve or maintain the productivity of thefarm, conservation and improved production practicesare usually warranted. Normally, conservation andother improved farming practices require additionallabor and expenditures. Give important considerationto questions such as who contributes the labor and costof implementing the practice and how these

contributions affect income for both tenant and landowner.

• CRP – cutting waterways – spraying noxious weeds


6 – Hunting

Waterfowl and deer hunting provide a significant value to many farms on Delmarva.

Careful consideration must be given to liability issues as well as methods of hunting, frequency of hunting, trash from hunters, pit, stand and roadway maintenance and location.

The land owner must understand liability issues of the

property owner

See additional issues and contract


7 – Improvements and repairs

Misunderstanding is prevented by agreeing aheadof time what repairs will be done, how much will bedone and what each party will furnish toward them.In many instances, tenants provide equipment thatlegally becomes permanent fixtures on the farm.Disagreements can be avoided and the farm’s

resources more fully used if both landowner and tenant agree on needed improvements.

Roadways, fencing, and machinery storage fit this need.

Goose pit construction may also fit this area


8 – RecordsFarm records are a necessary part of farming. Therecords need not be elaborate or formal accounts but atleast should cover all the expenses affecting both parties.The tenant is the logical person to keep the recordsbecause he or she is usually in closer touch with the day to-day operations. If the records are kept as part of acomplete farm account record, they will have greatervalue to the total business.

Nutrient management plans maybe part of the records shared. They include:1. soil tests2. nutrient inputs3. Yield records

*Owners can get copies if requestedPesticide records may also be part of the records shared


9 – No partnership

A lease does not create a partnership. A statementof this nature is advisable in any lease form.Rental arrangements involving livestock-shareleases are more apt to be considered partnerships thanthe crop-share arrangements, but such arrangements

are more likely to be considered modifications of thelandowner-tenant relationship as traditionally

established under the crop-share lease.


10 – Right of entry

Every farm lease agreement should include a statementgiving the landowner the legal right to enter theproperty. Without such a statement, a tenant has the

right to treat any entrant on the property as a trespasser, including the landowner


11 – Arbitration (settlement)

Differences of opinion can arise rather unexpectedly.For this reason, leases should be in writing. Timetends to make oral agreements hazy while a writtenagreement is always available for reference and recall.Also, a written lease forces both parties to “argue out”their differences in most areas where differences ofopinion may occur. This section is included to

encourage the use of disinterested persons for settling differences promptly and in a friendly manner rather than by litigation.

The county agent, MDA personnel, banker, etc may assist in arbitration


12 – Additional agreements and modifications

It is often necessary to change or add to contractualarrangements, and one of the tests of a good lease is

its flexibility for changing the operating plan. Any changes made after the initiation of the original contract should be made a part of the written contract.

• All agreements which encumber the land should be addressed.

• CSP/ CRP are examples


12 – Signatures

Signatures by each party are one of the five essentialparts of the lease contract. The agreement becomes acontract when it is signed. All co-owners of the property,including husband and wife, should sign the leaseagreement when property is held in joint tenancy or

tenancy by entireties.

Signatures should be by individuals rather than family members, partners, share holders, etc. so it is clear who is involved.


Our goal is to suggest lease agreements that will:

Reduce Risk


Risk considerations

1.Crop Input costs2.Machinery costs3.Fuel costs4.Land costs5.Volatile commodity markets 6.A very troubled monetary system


Famer controlled costs

1.Crop Input costs2.Machinery costs3.Fuel costs


What can you do to control Crop Input costs?

a.Seedb.Fertilizerc.Herbicidesd.Insecticidese.Tillage methods


What can you do to control Machinery costs?


DIRTI – Method to determine cost of ownership

D- Depreciation I – InterestR – RepairsT – Taxes I - Insurance


DepreciationDefinition

a. tax purposes

b. real value purposes(amortize)


Depreciation - Realb. real value purposes

$200,000 combine 8 years

Residual value $50,000What are annual costs? 150,000/8

$18,750.00 per year


DIRTI $200,000 combineOwnership costs

1.Amortization $18,750.00

2. Interest 50% at 9% $9,000.00 3.Repairs 1% $2,000.004.Taxes5. Insurance 1% $2,000.00

Annual ownership costs $31,750.00


Machinery costs

What are real combine costs at $31,750.00 per year per acre?

a. 500 acres $63.50b. 1000 acres $31.75c. 1500 acres $21.17d. 2000 acres $15.87


Fuel costs

1. Assume 12 gallons per hour2. $4.00 per gallon3. 3 acres per hour

12 * $4.00 = $48.00 / 3 = $16.00 per acre


What about Labor?

Assume $15.00 per hour- salary plus any benefits

Remember Health care - $5,000 +

$5.00 per acre


Total Costs for combining500 acres 1000 acres

1. Ownership $63.50 $31.752. Fuel 16.00 16.003. Labor 5.00 5.00

Real costs $84.50 $52.75

Per acre


Total Costs for combining1500 acres 2000

acres1. DIRTI $21.17 $15.872. Fuel 16.00 16.003. Labor 5.00 5.00

Real costs $42.17 $36.87

Per acre


Years $25,000 $50,000 $75,000 $100,000

5 $5,000 $10,000 $15,000 $20,000

7 $3,571 $7,143 $10,714 $14,286

9 $2,778 $5,556 $8,333 $11,111

12 $2,083 $4,167 $6,250 $8,333

15 $1,667 $3,333 $5,000 $6,667

Ownership costs


Suggestion: Custom rates should be

a. ownership costs

Plus b. Fuel

c. labor

• University of Maryland Extension


Example

Break


Land Costs


Rental rates and arrangements

• Cash Rental Rates Determine a fair rate • Crop-Share Leases • Calculating a Cash Rent Lease • Flexible Cash Leases


Background• Land values have been steadily increasing along with land taxes. Land owners are looking for ways to off set this increased costs •Land rents have escalated dramatically in some areas•Rents in Iowa have topped $300 per acre when corn was $6.00•Some local rents have approached $175.





Quick Overview“Crop share – cash – flex”

• From the Owner’s perspective: – Which lease is least volatile from year to year?

• From the Tenant’s perspective: – Which lease is most volatile from year to year?


Land Rental rates and arrangements-

1. Crop-Share Leases2. Cash Rental Rates3. Leasing Practices4. Flexible Cash Leases


1. Crop Share 50-50 Lease

Landlord Tenant

Land Labor Machinery Management

½ inputs ½ inputs

½ Income ½ Income


1b. Crop Share 60-40 Lease?

Landlord Tenant

Land LaborMachinery

Management½ inputs ½ inputs 60% Income 40%Income


2. Determining A “Fair”

Cash Rent

Value


Iowa State Examples

applied to Delmarva

Options to consider


Calculating Cash Rent ValuesBy surveyCash Rent Market ApproachISU Extension Publication FM 1851 –

Cash RentalRates for Iowa 2008 Survey (released in

June)

Three Methods for Determining Cash Rent Values

1.Typical Cash Rent2. Average Rent for Production3. Average Rent for Corn Suitability

Rating (CSR)


Calculating Cash Rent Values

Three Methods for Determining Cash Rent Values

1.Typical Cash Rent

2. Average Rent for Production

3. Average Rent for Corn Suitability Rating (CSR)

( based on soil type)



1.Typical Cash Rent

Extensive survey system at Iowa State


Calculating Cash Rent

1. Typical Cash Rent Iowa Area 3 County Cerro Gordo Determine Overall average $ 200

High Quality Third = $ 238 Middle Quality Third =$ 204 Low Quality Third = $ 159

Based on survey – cost and yield 2007 - 2008



Maryland data


Maryland Cash Rent by CountyNASS – UDSA Annapolis

County 2005 2006 2007

Caroline $81.26 $75.68 $73.65Cecil $72.31 $74.44 $72.19Dorchester $81.56 $76.92 $77.54Kent $83.08 $83.12 $89.13Queen Anne $90.47 $91.81 $92.18Somerset $62.57 $63.55 $64.68Talbot $76.71 $83.12 $83.02Wicomico $71.45 $73.20 $73.21Worchester $75.04 $80.64 $82.38

Does not include 2008



1. Typical Cash Rent Upper shore Determine Overall average $ 100

High Quality Third = $ 130 Middle Quality Third =$ 100 Low Quality Third = $ 70

Based on NASS data – upswing in 2008 caused by high commodity prices are not included



2. Average Rent for Production


Calculating Cash Rent2 a. Average Rents Per Unit – Corn Yield

Iowa

Determine Average Rent for Corn

Farm’s Average Corn Yield (bu/A) 175Equals the Average Rent for Corn Acre $200

Rent per bushel of Corn yield $ 1.14



2 b. Average Rents Per Unit –Soybean Yield

Iowa - County –Cerro Gordo

Determine Average Rent for Soybeans

Farm’s Average Soybean Yield (bu/A) 45 Average Rent for Soybean Acres $200

200 / 45 per bushel of Soybean yield $4.45



Maryland data


Calculating Cash RentMaryland data

2 a. Average Rents Per Unit – Corn Yield

Determine Average Rent for Corn

Farm’s Average Corn Yield (bu/A) 125Equals the Average Rent for Corn Acre $100

Rent per bushel of Corn yield $ 0.80


Calculating Cash RentMaryland Data2 b. Average Rents Per Unit –Soybean Yield

Determine Average Rent for Soybeans

Farm’s Average Soybean Yield (bu/A) 35Equals the Average Rent for Soybean Acres $100

Rent per bushel of Soybean yield $ $2.85


Iowa data3. Average Rents Per CSR Index Point• Select the Area of the State/County –Cerro Gordo• Determine the Average Cash Rent using CSR • Farm’s Average Corn Suitability Rating78• Times rent per CSR index point$2.56

Equals the Average Rent for all Row Crop Acres $ 200Source: ISU Extension Publication FM-1851

Using Corn Suitability Rating (CSR)


Soil Type: Acres: Percent: CSR-------------------------------T370B 61.47 23.2% 85248 17.72 6.7% 60T368 16.70 6.3% 90212 11.71 4.4% 91T369 87.78 33.1% 85133 9.69 3.7% 80220 60.11 22.7% 85-------------------------------Totals 265.19 100.0% 83.73Iowa Corn Suitability Rating based yield estimation: 179 bushels per acre


Rental rates based on soil productivity

James Brewer Resource Soil Scientist

USDA-NRCSEaston, MD



See 2003 Eastern Shore Soil productivity grouping – FSA yields 2003

Group 1 150 bushels per acre

Group II 135 bushels per acre

Group III 120 bushels per acre

Group IV 90 bushels per acre

Average 125 bushels per acre


Rental rates based on soil productivity groupings, yield potential and value

Group 1150 bushels per acre* $0.80= $120+

Group II 135 bushels per acre* $0.80= $108+

Group III 120 bushels per acre* $0.80= $96+

Group IV 90 bushels per acre * $0.80= $72+

Average 125 bushels per acre


Additional IowaCash Lease Calculations

A. Gross Income MethodB. Tenant Residual MethodC. Crop Share MethodD. Return on Investment Method


CORN: (150 buX $3.80) + $22 = $592.00 SOYBEANS: (35 buX $7.70) + $22 = $291.50

Iowa cash rents typically are equal to about 30 to 40 percent of the gross

income from producing corn, and 35 to 45 percent of the gross income

from producing soybeans.

Maryland example Cash Rental Rate 4a. CORN:$592./ac X 25% = $148.00 4b. SOYBEANS:$291.50/ac x 35% = $102.00

Average $125.00

A. Share of Gross Income


Iowa

Keep in mind, at 35 – 40% of the gross income going into land rent, , the operator cannot do anything else. If he does, he must bill his services to the land owner.

You must understand the complete rental agreement before you compare rental rates from one region to another



Iowa CORN: (175 buX $4.50) + $22 = $809.50 SOYBEANS: (45 buX $9.00) + $22 = $427.00




Cash Rental Rate 4a. CORN:$809.50/ac X 25% = $202.35 4b. SOYBEANS:$427/ac x 35% = $149

Average $175.67



Iowa CORN: (175 buX $4.50) + $22 = $809.50 SOYBEANS: (45 buX $9.00) + $22 = $427.00




Cash Rental Rate 4a. CORN:$809.50/ac X 25% = $202.35 4b. SOYBEANS:$427/ac x 35% = $149

Average $308



CORN: $592 – $526.39 = $65.61

SOYBEAN: $291.50- $310.51 =$(-19.01)

Average: $23.30Price and yield is everything

B. Tenant Residual Method


12/3/2008 PricesCorn: 50% of gross minus owner’s costs $592/2= $296 –($406.04/2($203)) = $92.00

Soybeans:50% of gross minus owner’s costs$291/2= 145.5-(211.12/2( $105.56) = $$39.94

Average:$66.00

(1)The owner is assumed to pay 50 percent of the costs for seed, fertilizer, lime, pesticides, crop insurance, interest and miscellaneous, and drying and storage.

C. Crop Share Method 50-50 Share


D. Return on Investment MethodIowa

Iowa farm estimated to have a market value of $5,000 per acre.Expected Rent: (4.8%) X $5,000 / acre = $240/acre(4.8% -2003-2007 avg.)


Iowa Corn Soybeans

Cash Rent Survey $200 $200Per Bushel Yield $205 $200Per CSR Point $200 $200Gross Income $363 ($290) $252 ($202Tenant Residual $539 ($332) $311 ($185) Crop Share $355 ($251) $219 ($156) Return on Investment $240 $240

Average $300 ($245) $232 ($198)

Today’s Average $266 ($222) 2007 Survey Average - $162


Future Consideration

•


•


Future Consideration

• What are prices (income) going to be? – Ethanol impact –how long? – Shifts in what is grown –Global impact?

• What are inputs going to cost? – Higher oil, higher fertilizer costs. – Higher demand for seed, technology cost.








Corn Cost of Production –What if?

• Fertilizer $188.40• Seed $ 71.01• Pesticides $ 49.08• Insurance $ 21.00• Drying and Storage $ 20.00• Machinery and Labor $160.35• Interest $ 16.55Total (w/o rent) $526.39/150 = $3.51 per bu.

Land charge $80.00 $606.39 /150=$4.04 per bu


Bottom Line

• Risk management strategies and tools will be extremely important for 2009.


New Average Crop Revenue Election (ACRE)

• Gives producers a one-time option to choose a revenue-based counter-cyclical payment program, starting in 2009 through 2012• Producers choose between the current program (LDP and CCP) or ACRE• Computed on planted acres, up to the total number of base acres on the farm• Price guarantee is the 2-year average of the national price (seasonal).


Average Crop Revenue Election (ACRE)

Gives producers a one-time option to choose a revenue-based counter-cyclical payment program, starting in 2009 Producers choose between the current stable of programs or ACREProducers choosing ACRE agree to 20% decline in direct payments and 30% decline in loan rates


Flexible Cash Leases

Desire:Stable and predictable rents.

Current Reality:Prices and yields are very unpredictable.

Potential Solution: Flexible lease contract


Advantages Disadvantages

Price and production risk shared as well as profit opportunitiesActual rent adjusts as production or price changeOwner does not have to be involved in decision making about inputs or marketing

Owner and producer share in risksNot as well understood as traditional cash lease or crop shareMore difficult to calculateOwner benefits from tenant’s management skillsTenant loses windfall profit potential from high prices


Flexible Cash Lease is a Cash Lease

• If the final rent does not depend on the farm yield, a flexible rent is still considered to be a cash rent.• Example: base rent on county average yield and actual price at harvest.• County yields are not published until March each year.


Types of Flexible Cash Leases

• Rent varies with both price and yield – Matches tenant’s ability to pay• Rent varies with yield only – Could have high yields, low prices• Rent varies with price, only – Could have low yields, high prices



Base plus Bonus

• Paying a “flex bonus” when revenue is above expectations does not affect the split of payments if it is not based on the actual farm yield.• Provide a copy of your agreement to the FSA county office.



Example

High yield - low price 180 bu. $2.50Low yield - low price 90 bu. $2.50High yield – high price180 bu. $4.50Low yield – high price 90 bu. $4.50

Go to spread sheet


Example

High yield - low price 180 bu. $2.50Rent =Low yield - low price 90 bu. $2.50Rent =High yield – high price180 bu. $4.50Rent =Low yield – high price 90 bu. $4.50 Rent =


Other Resources• Materials from this meeting – http://www.extension.iastate.edu/feci/Leasing/vflm.html• Online Courses –Ag Management e-School – http://www.extension.iastate.edu/ames• Workshops, meetings, conferences – http://dbs.extension.iastate.edu/calendar/• Publications –rental survey, land value survey, etc. – http://www.extension.iastate.edu/pubs/• Articles and spreadsheets – http://www.extension.iastate.edu/agdm/• Private Consultation – http://www.extension.iastate.edu/ag/fsfm/fsfarmmg.html

http://www.extension.iastate.edu/ames

http://dbs.extension/


Putting a Lease TogetherMove back

Improving Negotiation Skills• Focus on win-win situations

• Don’t underestimate your position at the bargaining table

• Formulate a resistance point

Irriagated ground



SummaryA Good Lease agreement

Written1.Names of parties2.Terms of lease3.Rental rates and arrangements4.May address farm operating expenses5.Should include conservation and

improved practices6.Hunting provisions


Summary7. Should address improvements and

repairs8. May include records – nutrient

management9. May include statement that states it is not

a partnership10. Right of entry statement11. Method of arbitration12. Additional agreements if any13. Signatures


Summary

Rental Ratesa. crop shareb. cash leasec. flexible cash leased. Livestock share leased. farm machinery, equipment, and

building lease


Summary

Determining cash rental values

1. Surveys – NASS data by county2. Using soil productivity groupings

NRCS3. Gross income method4. Tenant residual method5. Crop share method6. Return on investment


Summary

Introduced the new Flexible cash lease method

Hybrid of the share crop and cash systemsWhat to share in good timesreduces risks in volatile times

Way to protect land owner for actually participating( FSA ruling)

University of Maryland Extension Farmland Leasing Arrangements Jenny Rhodes – Queen Anne Shannon Dill, - Talbot John Hall - Kent.

Documents

written lease

lease contract

term of lease

shortterm lease

longerterm lease

longer lease

equitable lease

year lease