Evaluating your Leasing Arrangements

Sandra Wick, Crops Agent

Now that most of the fall crops are out of the field and in the bin or sold at the elevator, tenants and landlords may be wondering about re-examining their farmland leasing arrangements.  Whether your leasing arrangements include cropland, pasture or both, this can be a very challenging component of your farming enterprise.  With the downward trend of the commodity markets, this may be the time to re-negotiate the components of your leasing arrangements, whether it be a crop share or a cash rental arrangement.

It is estimated that approximately 50% of Kansas farmland and pastureland is rented and is a growing prominence with many producers.  Different types of leases have been developed to meet the needs of the modern Kansas farmer and rancher.  It is important that both parties, to a farm or ranch lease, understand the details of their lease agreement and the laws that affect their lease.  Leases can be written or oral, however, a written lease is strongly encouraged as it will help and make sure the rights of all parties involved are clearly defined and understood.

Leases can be annual or multi-year with advantages and disadvantages of both.  Multi-year leasing arrangements will allow the tenant and landlord to plan accordingly especially with costly machinery investments.

A very important principle for all leases is good communication between the landowner and the tenant, during the good years and especially during the bad years.   By keeping both parties informed of changes in market conditions, production practices, or future plans like selling the land or passing it to heirs, the opportunity for conflict is greatly reduced.   Leasing is a business relationship between two parties and if both are satisfied with the outcome of the leasing arrangement, then there is stability.

The Post Rock Extension District is again conducting a leasing arrangements survey in each of our 5 counties including Jewell, Lincoln, Mitchell, Osborne and Smith.  We are expecting the compiled data to be completed approximately the middle of January.  If you would like a copy of the compiled results, either stop by, call or email us at any of the Post Rock Extension District Offices.

K-State Research and Extension has many excellent tools and resources available on the agmanager.info website under the “farm management” tab including land leasing and land values.   The “KSU Lease spreadsheet” tool can be used to help tenants and landlords determine an equitable leasing arrangement.

For more information on “Farmland Leasing Arrangements”, stop by or call any office of the Post Rock Extension District in Beloit, Lincoln, Mankato, Osborne or Smith Center.