Renew farmland rental agreements now

Farmland rental agreements need to renew before 2014 crop preparation begins.

For most farms the preparation for the 2014 crop production season has already begun with the planting of the winter wheat crop. Most farms are fully engaged in fall tillage and fertilizer applications for the planned 2014 crop production season. For a landlord, this means that the current farmland renter is well underway with plans to produce crops on the rented land during the 2014 crop production season. Asking to make changes or adjustments to a farmland rental agreement after operations have already started makes things much more complicated. Complications can compound if there is no written agreement. Without written terms, both parties resort to their assumptions of the lease terms, which may not coincide.

Both landowners and lessees should review their lease document to determine the notification deadlines for proposed lease changes. If either party wishes to alter an existing agreement, the written notice deadline of any intent to change a current farm land rental agreement should be one of the terms of the lease. It is common for this type of notice to be given well before the final date for giving termination notice. For example, a landlord not giving notice to their current renter in advance of fall tillage, fertilization or planting will leave the landowner liable for full reimbursement for all costs that the current renter has invested in preparation for the 2014 crop production season. If the renter has forward contracted the winter wheat production, the landlord may carry the economic responsibility for the full value of the contracted wheat.

The terms and conditions of any farm and rental agreement should be in a written format that both the landlord and the renter can understand. Some example farm land rental agreements can be found and downloaded from the FIRM web page of Michigan State University Extension, including the Michigan Cash Cropland Lease, along with other farm land rental surveys and farm land values surveys. It is important for landlords and lessees to understand that the rental value of any one parcel of land is highly variable and tied to several production and economic factors. A farm land rental value checklist is also available for download.

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