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Crop share arrangement, I'm the LL
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dpilot83
Posted 3/2/2024 13:01 (#10648314 - in reply to #10648176)
Subject: RE: Crop share arrangement, I'm the LL



Tex-wcKansas - 3/2/2024 11:32 1/3

LOs seem to have a hard time keeping farmers on their ground in this type of agreement. I have turned down this type several times now in the last few yrs.


There just aren't as many gross dollars to go around in lower yielding environments. Yes, it costs more to raise 230-260 bushel corn than it does to raise 80 to 120 bushel corn but it's not $440 more. There is simply more gravy in higher yielding crops so tenants are willing to farm it while paying for all of the fertilizer and herbicide.

Interesting reading that cash rent is normally 1/3 to 40% of expected gross income in a higher yielding area. In our area it seems that cash rent is generally significantly less than what the landlord could expect from a 1/3 - 2/3 deal where the landlords pays for 1/3 of fertilizer and herbicide.

But of course, in our area, we have regular drought years so over a given 5 or 10 year period, the two are closer together than one might think.

Basically, it's what the market will bear. In IL and IA the market will bear the landlord getting a higher percentage of the crop than it will here.

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