What is a fair farmland rental rate?

Learn more about establishing fair rental rates with declining commodity prices at upcoming Farmland Rent and Rental Meetings for Landlords and Farmers.

Establishing a fair cash rental rate can be difficult. With lower commodity prices, farmers are looking for ways to manage costs to maintain a profit. One of the ways is to negotiate lower cash rents. From a landowner’s perspective, they are looking over the annual cost of ownership plus a reasonable return on investment in the land. In many cases, landowners are relying on rental income to cover part of their family living expenses. Lowering cash rental rates can impact their standard of living.

Cash farm rental rates are likely to be too low during periods of rising prices and high yields, and too high during periods of declining prices and low yields. Rates often reflect the results of the past few years more than the upcoming year. Rental rates are also influenced by local demand, soil type, parcel size, drainage, irrigation, crop rotations and farm program payments.

To help review some of the options landowners and tenants should consider when negotiating reasonable farmland rental rates, a series of Farmland Rent and Rental Meetings will be held. Michigan State University Extension district farm management educator Dennis Stein will lead the discussion and consider both sides (landowner and tenant) of the farmland rental agreement issues, and provide an overview of information helpful in developing a win-win farmland rental agreement.

Agenda items include:

  • Current land and rental values and how they are trending.
  • Approach to farmland rental rates considering current economic trends.
  • Considerations and using alternative farmland rental agreements (pro-con).
  • How some farms are using Flex Rental agreements to share profits.
  • What needs to be in a farmland rental agreement.
  • How some approach the cost of field drainage tile in a rental agreement.

Register online at: Farmland Rent and Rental Meeting for Landlords & Farmers.

Please be sure to register to insure adequate materials can be prepared. Seating is limited at each site. There is no cost to those that pre-register. If you need assistance, call the MSU Extension office in the county of the meeting you plan to attend.

Post-meeting copies of handout materials are $10 per set.

Farmland Rent and Rental Meeting locations

Friday, Dec. 9, 2016
1-4 p.m.
Isabella County Building, Room 320
200 N. Main Street, Mt. Pleasant
Contact: Paul Gross at 989-317-4079

Thursday, Dec. 22, 2016
9 a.m. – Noon
Sanilac Co. Mental Health Building, Conf. Room,
227 Sanilac Road, Sandusky
Contact: Martin Nagelkirk at 810-648-2515

Tuesday, Jan. 3, 2017
1-4 p.m.
Huron County MSU Extension Office
1142 S. VanDyke, Bad Axe
Contact: Bob Battel at 989-269-9949

Thursday, Jan. 5, 2017
1-4 p.m.
Lapeer County Building, Basement Conference Room
1800 Imlay City Road, Lapeer
Contact: Phil Kaatz at 810-667-0341

Tuesday, Jan. 10, 2017
1-4 p.m.
Tuscola County MSU Extension Office
362 Green Street, Caro
Contact: Dennis Stein at 989-672-3870

Wednesday, Jan. 11, 2017
1-4 p.m.
Gladwin County MSU Extension Office
555 W. Cedar Street, Gladwin
Contact: Kable Thurlow at 989-426-7741

Thursday, Jan. 12, 2017
1-4 p.m.
Saginaw County MSU Extension Office, 2nd Floor Conference Room
1 Tuscola Street, Saginaw
Contact: Ben Phillips at 989-758-2500

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