Posted by Paul on March 23, 2014 at 12:16:29 from (66.60.223.232):
In Reply to: More on Cash Rents posted by Eldon (WA) on March 23, 2014 at 10:07:47:
Doing business with family can be difficult. Or very rewarding...
If everyone is happy then don't worry about it.
I take this as a casual question, just to see if things are up to snuff. Farming has gone through a big bubble of increased grain value, like triple what it was, followed by all the inputs of seed, iron, fertilizer, fuel, part has doubled in price.
Now grain prices have dropped of to 1/2 or so of their highs, still good prices compared to 5 years ago, but our costs are up so much we almost lose money at 'good' grain prices.
And we are one good crop around the world from grain prices really falling back to where they were. Which is a disaster for all the high costs of what we have to pay.
This has played havoc with land costs, as there were really big operating ties for huge profits for a year to 2, and nice numbers other years, but always the other shoe is ready to drop and crush us all. Is corn going to be worth $3 or $7 next winter, will I personally have a good crop or a disaster this summer with the unpredictable weather. One fella will gamble it all, one fella with play it conservative, who is left farming next year..... The game has gotten to be such a big stakes game.....
A visit with the local extension office would let you know local rental rates, often good to throw out the goofy high rates som big time operators pay and be a nice steady little bit below average for family - if you wish.
$35 to 55 sounds crazy low for me, but we are over $200, some at $400 an acre around here. Different ground, different yields tho, so its hard for me to really say what 75-100bu land is worth. As it sounds dry makes a big loss and a wetter summer gives pretty good yields there, a flex lease or the bonus as your family paid in good years is a good way for everyone to share a bit of the rewards without having a bad year putting someone out of business.
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