Across the editor's desk: September 2007
Land represents about 80% of all the wealth in production agriculture. In these times of significantly higher crop prices, land seems to attract about 80% of our talk and emotion, too.
You'll recall that the last big run-up in land prices in the 1970s created quite a stir as well. Stories circulated of farmers asking to rent land from new widows right at the funeral. I never did pin down a true example of that activity, but it did make for good coffee shop talk.
Posters in the Farm Business discussion group at Agriculture Online traded some strong opinions recently on cash rents. It got started when a poster saw a classified ad in a state ag publication offering owners $25 per acre over existing cash contracts.
"It rubs me the wrong way," wrote the poster named Sideways. "I'll say this for the guy, at least he's not going behind your back and making deals with your landlord...he's just doing it in your face. He must not have too many friends in the area."
The ad was soon defended by a poster named Kraft-t. "Any other business advertises with the intent on increasing volume of business and usually their market share at the expense of other businesses."
Kraft-t continued, "We farmers must think we are in a special profession. That we shouldn't be bothered by competition. Once we rent a farm it is ours and nobody better interfere. Is that what we think?"
"Well said," added Jake scia. "The concept of 'going behind my back' is just ridiculous. If any blame is to be placed, it is on the original renter for not watching his business better and not having a better relationship with his landlord."
Sideways countered the post by Kraft-t regarding farming as just another business. Farming, said Sideways, is a business where every-one chips in when someone is sick or injured.
"How many times have you seen a dozen combines in an 80-acre field when someone needs help due to sickness?" asked Sideways. "On the other hand, how many businesses, like Wal-Mart, do you see helping out the likes of K-Mart when they went through bankruptcy?"
"All bids are not equal, and this is not being discussed here," added a poster named Red Steele. "If you have someone who excels at banding a little fertilizer on rented land and mining the P and K out of the soil, you cannot really compare his $25 or $30 an acre more with a credible long-term tenant.
"And farms are pretty personal and emotional things, too," he continued. "A farmer wants a friend or at least someone he likes farming the ground he has loved. A landlord should be able to do the math himself and figure out if both he and the tenant are getting a fair shake."
A poster named lukem just wished that crop share leasing could be an easier option.
"I would like to rent ground on a 50-50 basis," lukem posted. "The problem comes from USDA. To them, it's either share rent or cash rent. If I say it's cash rent and they find out that the landlord's payment is based on revenue, I become ineligible. If I say it is share rent then the landlord has to deal with more paperwork.