Barbara/Howard Doster

August 3, 2007




Getting rent right, right now is the most significant ethanol-related problem/opportunity for both owners and tenants. Now is perhaps the best time for the rest of their lives for tenants to get more and/or better land. Why? They can get it by paying more, but still less, than right rent. Unfortunately, more tenants will lose their leases for 08 than at any time since the early seventies when crop prices also increased faster than non-land costs. Why? Their neighbors from near and far will out-bid them; many have already lost 08 leases, but havent been told yet.


Both of us enjoy teaching right rent, starting by playing our rent 80-acres game. By perhaps using our management service, well encourage both owners and tenants to create and almost automatically update a lease thats always current, and do whatever to nurture a relationship that can last through generations.


As teachers, well start by using Purdue-type budgets, similar to what I used when teaching rent in Extension meetings. Unlike in Extension, however, were prepared to be an advocate for either a tenant or an owner in rental negotiations; and in our management service, well represent owners.


Perhaps many owners and tenants can benefit from using our outside adjustor lease which allows owners to participate in outside the farm-gate changes in prices and/or yields while still allowing tenants to realize 100% of their personal production and marketing performance. Thanks to an updated FSA ruling last spring, we can now say our lease is considered a cash lease for FSA and income tax purposes.


Today, an 81 year-old Indiana owner of 500 good acres called in response to our March 2 Successful Farming article on right rents. Like us, he wants to teach his grandkids how to manage their future land inheritance, and he wants to get his rent right now.


Also today, the farm administrator of another states prison farm system called. He wants our outside eye to look inside his business. Together, well likely test alternative ways he might lower his supervision and machinery overhead by having one crew use one set of big plant/harvest machinery on multiple farms.

Last week, an Indiana tenant called to ask if we would work with one of his owners who lives out east. The tenant has a long-running flexible lease with her; now older than we are, she just wants a third party involved.


In March, I went to bed after 7am on twenty-three nights after that rent article came out. I was on the phone all day and trying to write individual email responses all night to owners and tenants from twenty states.




This weekend, I expect calls from the August issues of Successful Farming and Prairie Farmer rent articles. Im now finishing a September article for one magazine and starting two rent articles for October issues.



What fun!


Why not?

Were qualified.

Barbara and I both taught Purdue management classes for many years.

Im a former SW Ohio manager of 16 farms; Ive been a tenant; Im now an owner.

Im still an Accredited Farm Manager and Accredited Agricultural Consultant with the American Society of Farm Managers and Rural Appraisers, and Im past president and past long-time secretary of the Indiana Chapter of ASFMRA.

Were both licensed Indiana real estate brokers, and can thus have escrow accounts for our management clients.


Do what you do best, and trade for the rest.

Thats what we do, and its what we want you to do.

Well position ourselves as low-cost, not because were not high priced,

but, because well select clients, and clients will select us, who dont want or need much of our time, particularly if you use our adjustor lease, once its set up.

Thus, well be high value to you.


Perhaps well look for an Indiana attorney to do the legal work with us in any Indiana teaching, and in our farm management service. Well also look for someone younger to bring into our business.


If theres an effective demand for our management consulting services in other states, well select an attorney, farm management firm, whatever there, to work with us in teaching and as needed. If youre in another state, find someone to sponsor our teaching lesson.