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 haven’t been told yet.
Both of us enjoy teaching right rent, starting by playing our rent 80-acres game. By perhaps using our management service, we’ll encourage both owners and tenants to create and almost automatically update a lease that’s always current, and do whatever to nurture a relationship that can last through generations.
As teachers, we’ll start by using Purdue-type budgets, similar to what I used when teaching rent in Extension meetings. Unlike in Extension, however, we’re prepared to be an advocate for either a tenant or an owner in rental negotiations; and in our management service, we’ll 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
Also today, the farm administrator of another state’s prison farm system called. He wants our “outside eye to look inside his business”. Together, we’ll 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
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. I’m now finishing a September article for one magazine and starting two rent articles for October issues.
Barbara and I both taught Purdue management classes for many years.
I’m a former
I’m still an Accredited Farm Manager and Accredited Agricultural Consultant with the American Society of Farm Managers and Rural Appraisers, and I’m past president and past long-time secretary of the Indiana Chapter of ASFMRA.
We’re both licensed
Do what you do best, and trade for the rest.
That’s what we do, and it’s what we want you to do.
We’ll position ourselves as low-cost, not because we’re not high priced,
but, because we’ll select clients, and clients will select us, who don’t want or need much of our time, particularly if you use our adjustor lease, once it’s set up.
Thus, we’ll be high value to you.
Perhaps we’ll look for an
If there’s an effective demand for our management consulting services in other states, we’ll select an attorney, farm management firm, whatever there, to work with us in teaching and as needed. If you’re in another state, find someone to sponsor our teaching lesson.