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| I'm pretty sure i could expand pretty quickly by offering $500 cash rent, but I'm equally sure my best outcome would be to do a whole lot more work and not make one dime more than I do now. Is that an opportunity? Expansion doesn't appear all it's cracked up to be if your only goal is acres. As you say most tennant/landlord agreements are stable and usually takes some sort of crazy offer to break the aggreement (not just another $5).
In a similar way I did expand in hogs rather significantly (to me) based on an opportunity. The opportunity was caused by generally being less folks wanting livestock, new barns that are easier to maintain (especially for the novice), pig genetics that thrive in these barns and bankers more than willing to finance the deal (in fact it was my banker's idea). To me the family hog farm made a jump from farrow to finish to multi site wean to finish with centralized sow/piglet production - spreads the risk, $ and responsibility among several families. Some look at my type of operation with fear, but we mostly replace producers leaving the market (less folks wanting livestock). There will be times of some over production (always has been) since timing never works out perfect between those entering and those leaving, but overall no one is particularily hurt. Our latest woes had nothing to do with pigs (the market was pretty high), it was the corn/bean prices. The truth is the pig industry has changed and while an older operations can still do well (especially if it's all paid for), new operations will look more like mine. Btw, it does pay pretty good.
So, two examples of expansion. One capitalizes on an opportunity created by available financing and technology with the result is my not so viable small grain farm becomes a very viable small grain farm with livestock (guess where the manure goes). My other path would have got me magazine exposure and maybe beat up outside church with no financial gain. One thing for sure is that opportunities do come up, but may not stay available long. Money is harder to get now, lots of buildings have gone up - things have changed. In grain operations there always those entering and leaving the business as well. The best thing to do is to do a good job with your own operation and make sure you make money on all your current acres (it's not the other way around - loose a little on each acre, but make it up in volume) and have your 'hat in the ring' on anything that comes available.
One thing that rarely gets mentioned here or on any board is the landlord's position. Don't you guess that when a tennant is leaving that the landlord starts considering possible replacements? Naturally, he/she doesn't have to think too long as there is usually someone ready to ask just after the heart monitor goes flat line. However, I'd say most landlords make a list of potential candidates based on the competance of the farmer and business compatibility. While we can suggest it's all about the money (and it sure matters), most landlords want the relationship to fit. Consider even though a cash rent contract puts the tennant in control, landlords still may want to have a say in tillage, mowing, rotation - not everyone may be willing to comply and the high cash rent guy may not be able to comply. Another consideration is that land is a conservative investment with small but steady returns. Often the landowner doesn't want to risk not getting any return if the high cash rent doesn't materialize as promised. Don't be fooled no one is insulated from risk no matter what the contract says - if one party is taking the high risk route, everyone is affected and landowners realize this.
So, be someone that would be considered a possible tennant, do a good job with your own operation and you are in a position to take advantage of opportunities. For me faith in God makes all the difference in the world. It's too easy to get caught up in the ups and downs in the world. I realize God brought be out here and He will get me through the trials (He didn't promise it would be easy). While you wouldn't have to rely on faith, it sure helps with being patient in tough times (that whole 'peace that passes understanding' thing).
Hope this helps,
Pat
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Land Rental Ethics-How do you guys add acres?
