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Extension > Local Extension Offices > Benton > County Agriculture Educator > Articles > Negotiating Fair Farmland Rental Rates

Negotiating Fair Farmland Rental Rates

University of Minnesota Extension, Stearns County News
October 15, 2014        
           
Source:  Emily Wilmes, Extension Educator-Livestock
University of Minnesota Extension
Stearns, Benton & Morrison Counties


Negotiating Fair Farmland Rental Rates
By Emily Wilmes, University of Minnesota Extension

ST. CLOUD, Minn. (10/15/14) — One of the most common topics for questions I get at the office is cropland rental.  Renting farmland is common for many farmers seeking land, and the value of land causes many landowners to hold on to it, even after their own farming days are over.  I can’t believe I’m already saying this, but the year 2014 is quickly drawing to a close, with less than 3 months until 2015.  Now is the time that many landowners and tenants begin to renegotiate for the coming year.  Here are some of things to keep in mind:

Know the value of your land.  A lot of factors come into play when determining the value of a piece of land.  Soil type and quality, location, and size and shape of the parcel are just a few of the factors to consider.  If you aren’t sure where to even start with valuing your land, you can look up the average rent for land in your county.  However, if you do this it is important to remember that these numbers are just averages.  In large counties, like Stearns, land values can vary greatly depending on the factors I mentioned already. You can get information about county averages by calling your county Extension office, or visiting www.extension.umn.edu/agriculture/business/land-economics

Next, determine the rental agreement.  Will you be paying a fixed amount per month for a year?  Will you be using a flexible land rent agreement?  Flexible land rent agreements are becoming more and more popular, as they allow tenants and landlords to share risks and rewards.  No matter what type of agreement you choose, make sure you put it in writing.  If something were to go awry, having the agreement documented will help protect both the landlord and tenant.  For a basic, “fill-in-the-blank” type rental agreement, visit www.aglease101.org

Finally, educate yourself.  In November and December, Extension will again be offering land rent workshops, titled, “What is a Fair Farmland Rental Agreement?”  We will have 4 in the area:
Friday, November 21st from 9:30-11:30 at Greenwald Pub in Greenwald and from 1:30-3:30 at Mr. Jim’s in Foley.  And Thursday, December 11th from 9:30-11:30 at the Initiative Foundation in Little Falls at 1:30-3:30 at the Browerville Community Center in Browerville. 

If you have additional questions about land rent or the workshops, contact the Stearns County Extension Office at 320-255-6169, Benton County Extension Office at 320-968-5077, or the Morrison County Extension Office at 320-632-0161.

Contacts

Emily Wilmes
Extension Educator, Ag Production Systems - Livestock
(320) 255-6169
krek0033@umn.edu
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