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Website: agecon.unl.edu/landmanagement
Agricultural Land Management Quarterly Presenters
Jim JansenAgricultural Economist
University of [email protected]
402-261-7572
Allan VyhnalekFarm & Ranch Succession and Transition
University of [email protected]
402-472-1771
• Recent Trends in Nebraska Cash Rental Rates• Trends in cash rents for 2018 - 2019• Calculating cash rental rates to reflect market prices or farm yields
• Updating Agricultural Leases for the 2019 Production Season• Considerations for landlords and tenants entering the new growing season• Aglease101.org - free lease resources
• Ask an Expert• Review of submitted questions• Upcoming land management workshops and publications
Webinar Outline: Monday, February 18, 2019
RECENT TRENDS IN NEBRASKA CASH RENTAL RATESPRESENTED BY JIM JANSEN
• Annual survey conducted since 1978 of Nebraska agricultural appraisers, professional farm managers, and bankers engaged in the land industry.• Preliminary results for land values and rental rates published the second week of March.• Full report published in June.
• Nebraska Farm Real Estate website full access to these resources: https://agecon.unl.edu/realestate
Nebraska Farm Real Estate Survey
Nebraska Agricultural Statistics Districts
Nebraska Dryland Cropland Rental Rates – 2018University of Nebraska-Lincoln, Dept. of Agricultural Economics
Nebraska Dryland Cropland Rental Rates – 2017USDA-National Agricultural Statistics Service
Website: https://www.nass.usda.gov/Statistics_by_State/Nebraska/Publications/County_Estimates/
Nebraska Center Pivot Irrigated Cropland Rental Rates – 2018University of Nebraska-Lincoln, Dept. of Agricultural Economics
Nebraska Irrigated Cropland Rental Rates – 2017USDA-National Agricultural Statistics Service
Website: https://www.nass.usda.gov/Statistics_by_State/Nebraska/Publications/County_Estimates/
Nebraska Cow-Calf Pair Monthly Rental Rates – 2018University of Nebraska-Lincoln, Dept. of Agricultural Economics
• Land rental rate survey data:• Evaluate available cash rental survey data to establish a baseline in the landlord and tenant
negotiation process
Estimating Cash Rental Rates by Adjusting Survey Data
County Value Farm Value
County Rental Rate $135/ac.County Rent/Bushel $1.13/bu.
Corn Yield 120 bu./ac. APH Yield x 135 bu./ac.County Rent/Bushel
$1.13/bu. Farm Level Rent $151.88/ac.
• Rent paid to landlord by tenant based off owner’s share of net returns per acre.• Example 50/50 split:
Cash Equivalent From Crop Share
Value Corn SoybeansYield (50% share) 80 bu./ac. 25 bu./ac.
Price/bushel x $3.50/bu. x $8.40/bu.
Income $280/ac. $235/ac.
Owner Expenses -$145/ac. -$85/ac.
Net Return to Owner (Effective Rent) $135/ac. $125/ac.
UPDATING AGRICUTLURAL LEASES FOR THE 2019 PRODUCTION SEASONPRESENTED BY ALLAN VYHNALEK
• Consider critical lease issues when updating agricultural rental arrangements• Cropland
• Timing of lease payments• Irrigation equipment• Fertility & manure application• Removal of stover from property & hunting rights
• Grazing land• Stocking rates• Fencing and noxious weeds
Lease Considerations for 2019
Irrigation systems may cause trouble in negotiation of rental rates (cash leases)• Rental rate surveys assume that the landlord owns the entire irrigation system• In many cases, the tenant may own a portion of the system or bear some of annual
maintenance expenses• Rents need to be adjusted (lowered) to reflect these contributions by the tenant
Lease Considerations for 2019
• Fertility• Set minimum fertility levels in lease• Which party pays for the soil tests?• Protect landlord with minimums
• Macronutrients main concerns (N, P, & K)• Protect tenant making multiple year investments
• Lime – typically a landlord expense• Phosphorus
Lease Considerations for 2019
• Cornstalk Rent• Cornstalks belong to the tenant unless there is a provision making a different arrangement• So additional rent typically not collected by landlord (subleasing permitted?)• Fencing and water
• Baling cornstalks• Periodically baling cornstalks permittable – once in 3-4 years• Not every year (unless properly managed)
• Phosphorus and organic concerns
Lease Considerations for 2019
• Move all leases to written contracts for better relationships between landlords and tenants• Current Law for handshake, or Verbal leases: For cropland leases, notice of termination must
be given before September 1 (6 months prior to 3/1 start of new lease)• Set by Supreme Court• Notice given by registered letter• For either ending lease, or changing provisions!
• Website for written leases: www.AgLease101.org
Lease Considerations for 2019
• Grazing land leases are typically 5 month long from May to October (or June to November)• Notice of termination is not specified for a handshake agreement• Lease ends each year grazing season so a written termination notice may not be necessary for
either ending lease or changing provisions!• Exceptions may exist on grazing land that run longer than just one season
Lease Considerations for 2019
• AgLease101.org – Free PDF leases for landowners and operators
AgLease101.org – Free PDF Leases
Click Document Library
AgLease101.org – Free PDF Leases
Fillable PDF Forms
Lease Publications
ASK AN EXPERT
PRESENTED BY JIM JANSEN & ALLAN VYHNALEK
• Question: I recently inherited a farm and need help with financial and legal matters, but I do not know where to turn. What should I do?
• Answer: Landlord & Tenant Cash Rent Meetings and Farm & Ranch Succession workshops provide a great starting point to learn from unbiased resources at the University of Nebraska-Lincoln.
• Answer: Nebraska Rural Response Hotline at 1-800-464-0258 provides free one-hour consultations across Nebraska with a legal and financial professional for agricultural landowners and operators.
Land Management Questions
• Question: Where can I find appropriate “wording” or “verbiage” to include in a land lease?
• Answer: www.aglease101.org provides example leases and educational pamphlets for free.
Land Management Questions
• Question: Online participants may now submit their questions?• Answers: Review of questions and answers will be based upon remaining time
available.
Land Management Questions
• Feb. 25, 2019 — David City, Butler County Events Center, Butler County Fairgrounds. Please register by calling 402-367-7410 by Feb. 21. • Contact: Melissa Bartels, [email protected]
• Feb. 28, 2019 — St. Paul, St. Paul Public Library, 1301 Howard Ave. Please register by calling (308) 754-5422. • Contact: Troy Ingram, [email protected]
• March 14, 2019 — Lincoln, Lancaster County Extension Office. Please register by calling (402) 441-7180 by March 11. • Contact: Tyler Williams, [email protected]
Upcoming Landlord & Tenant Cash Rent Meetings
Topics:• Trends in Nebraska Cash Rental Rates and Land Values
• Trends in cash rent for 2019 across Nebraska• Financial implications for changes in land values and cash rents
• Proper Communication and Decision Making for Agricultural Land• Improving communication between landlords, tenants, and family members• Short and long-term decision making for agricultural land
• Ask an Expert• Review of submitted questions and from meeting participants• Upcoming land management workshops and publications
Upcoming Webinar: Monday, May 20, 2019 at 6:30 PM
Agricultural Land Management Quarterly
Jim JansenAgricultural Economist
University of [email protected]
402-261-7572
Allan VyhnalekFarm & Ranch Succession and Transition
University of [email protected]
402-472-1771