Full cash rent or leave standing crops?

Unless the OP is talking substantial acreage, if it was me I'd just set a modest cash rent, paid in full 3/1, with a lease spelling out exactly what you want. Set the rent low enough that he'll make money and enjoy farming for you. Your farm should be up to par on ph, and if it isn't then get it there on your dime and have your lease state it needs to be kept there. Or just lime it and figure out leases that account for you being the one in charge of lime. Write into the lease you want X number of acres left standing each year and that they probably need to be beyond the headlands (where there's more grain). You can wheel out the exact acreage after the fact or if his equipment is modern enough it'll say how much is left. I'm sure there are many ways to accomplish a good owner/tenant situation, but this route seems pretty doable. I don't see why an owner would mess around with crop share agreements unless you're talking a hundred acres or more.
 
If you Can figure out how to make an active farm income will open up a lot more tax incentives.


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How much per acre, how many acres?

In order to write off expenses, you have to set-up a business. You keep books, then have your accountant validate what can be an expenses and then complete & file your returns. I looked into this and you need a fair amount of acreage to make it work and then be able to demonstrate viable business finances.
On this particular farm, $130/acre. We would be renting out about 50 acres.

We are definitely going to get a contract in place. At this point, I think we are likely going with set rental rates, and possibly buy some of the standing crop back depending on our food plot situation. This is some land a brother and I just got under contract to purchase. We close in a little more than a month so we have some time to figure things out and for me to make a farm tour thread for the new ground.
 
You should also know what your renter is signing up for with the USDA. My FIL was letting a neighbor cut the waterway grass for hay. He was not the one farming the tillable. After my FIL passed and a trip to the USDA the guy baling the waterways had signed on as a operator. I dropped him. When a young guy I knew who was just starting out asked to bale the grass I said yes. The first guy then threatened me through USDA not knowing I had dropped him as a operator. End of discussion.
 
I wasn’t the shrewd guy that put that together. Farmer is in his 70’s, it was his offer. But we have had drought years when no one made $ and he didn’t loose any. So on those years he was the smarter guy.
Razor thin margin.............

Here I am keeping the lights on for all you nice people, and my brother in laws plays in the dirt and gets a 1.3 million dollar condo in hilton head. Atleast he knocks the mud off his boots before he enters the airplane in the 1st class secton.......... His accountant is mad at him because the purchase was supposed to be a money looisng venture. IT's rented almost every week they're not there.
 
You should also know what your renter is signing up for with the USDA. My FIL was letting a neighbor cut the waterway grass for hay. He was not the one farming the tillable. After my FIL passed and a trip to the USDA the guy baling the waterways had signed on as a operator. I dropped him. When a young guy I knew who was just starting out asked to bale the grass I said yes. The first guy then threatened me through USDA not knowing I had dropped him as a operator. End of discussion.

I’ve never heard about signing up with USDA as an operator. Any cliff notes on the purpose and benefits of such?
 
On this particular farm, $130/acre. We would be renting out about 50 acres.

We are definitely going to get a contract in place. At this point, I think we are likely going with set rental rates, and possibly buy some of the standing crop back depending on our food plot situation. This is some land a brother and I just got under contract to purchase. We close in a little more than a month so we have some time to figure things out and for me to make a farm tour thread for the new ground.

I looked into setting up my 40 acres of tillable for expensing some costs. After looking at cost of accounting & tax filling (along with the hassle of record keeping), it wasn't worth it. If you are filing through your personal tax filing, rent income will also be taxed. Once you get into the 5 figures of income, begins to be more worth while.

Forget about profits and expenses, cash in versus cash out is what is important.
 
The row crop farmers I deal with usually want a longer term contract mostly for fertilizer input costs if they are using turkey litter it’s a large input cost one year that they are hoping to gain back over several years in higher crop returns. I don’t get to excited about contracts generally if they annoy me I’ll have someone else in there the following year so it’s in their best interests to play nice or lose 150 acres of tillable ground same goes for my pasture rent guys it’s not really in their best interests to annoy the landowner they will be looking for someplace else to move the cattle to. Now there may very well be a difference in their attitudes if it’s a very small tract they are dealing with idk in that case I deal in hundreds of acres to lose my ground would be a substantial loss for any of them. My neighbor to the north of the new farm is dealing with a poor tenant his dad rented from her family for many years and was a good tenant his son however is a clown idk why she is still putting up with him but I don’t have a dog in that fight.
 
The contract will also determine how much of the USDA payment you receive and the farmer receives. There are several everything from drought assistance to crop price reduction and these aren't counting if you have CRP.If you take land out of crop and put in CRP and don't change your contract it may end up that 1/3 of CRP will go to farmer
 
I’ve never heard about signing up with USDA as an operator. Any cliff notes on the purpose and benefits of such?
If you want to participate in any USDA program there's specific information required for recordkeeping and eligibility determinations. FSA does all of that. As an individual or an entity you are, first, a "customer," of one or more - FSA, NRCS, Farm Loan, etc. Then, assuming you own ag land and/or farm it you are an operator, an owner, or an owner/operator based on what land you are attached to. At the same time, over an entire farming operation you are any one of those three. Why? Some programs only pay operators, aka "farming farmers." Some programs pay ag land owners in addition to the party farming the land - the operator. Again, if you're playing in the USDA sandbox such designations are important. An operator is defined as:

https://www.ecfr.gov/current/title-7/subtitle-A/part-12/subpart-A/section-12.2

Operator means the person who is in general control of the farming operations on the farm during the crop year.

Owner means a person who is determined to have legal ownership of farmland and shall include a person who is purchasing farmland under contract.
 
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On this particular farm, $130/acre. We would be renting out about 50 acres.

We are definitely going to get a contract in place. At this point, I think we are likely going with set rental rates, and possibly buy some of the standing crop back depending on our food plot situation. This is some land a brother and I just got under contract to purchase. We close in a little more than a month so we have some time to figure things out and for me to make a farm tour thread for the new ground.
Back to the Cliff notes about a USDA defined operator. If the person you rent the land to is in a USDA program as an operator you too will be in the records as the landowner. Your renter will need to provide proof of control (for farming purposes) of your cropland. It usually comes in the form of a land lease which would specify the terms. Cash rent or farming on shares. If you do shares then you will earn any program payment (perhaps depending on the program details) in the percent of share specified in the lease.

For crop insurance purposes, for the operator, leaving a standing crop screws up yield which must be presented in some form like weigh tickkets. The yield, or more appropriately, production, determines coverage levels and any future indemnity payments.
 
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I cash rent my tillable acres here in central IN. You won't touch ground in my area for under $200/acre and in some cases more...I "think" we are at $250/acre. That rate includes the use of a dryer/bin and a pole barn as well. I have roughly 100 tillable acres and yes we use a contract even though the farmer is family. The document spells out who is responsible for what. We rent on a fixed price....I am not interested in crop speculation, and the farmer has a fixed cost as well. My contract spells out even soil fertility and the like so when he is done farming the land (retires) it is not sucked dry. I have a VERY good relationship with him, but a contract helps protect us both. As far as expenses....we simply keep receipts and remove that money from the income and report the "profit" on our taxes (We provide an itemized list to our accountant). All in all its a pretty nice secondary income....and a nice asset. We have 150 acres total.

The new harvesting equipment is VERY efficient (especially with corn). Beans can be clean as well if the field is fairly flat. I have never asked the farmer to leave crops standing. In fact I don't want that at all. I want the food where I can hunt it and have more control over how the deer access it. I will see an impact to my hunting if a neighboring property has a decent sized field of standing corn. But eventually the deer come out or the crop does.

I actually plant plots in corn and soybeans and leave those stand. I often spread wheat, turnips and crimson clover into them as well for some food diversity. Yes the deer still feed some out in the open fields....but they prefer the smaller plots near the cover...and that is where we sit and wait for them. I have enough other farming in my area and a low deer density that in the summer the deer are spread out to where I can plant 1/2 acre or smaller plots of soybeans and they will produce grain. The deer in my area won't go hungry unless there is a significant drought....70% or more of my area is planted in corn or soybeans or another forage crop every year....and we are talking about square miles of it. Couple that with an average annual snowfall of like 18" and the deer here have it pretty good.
 
I used to have my farmer leave a couple acres of crops standing in return for a lower price per acre for the rest of the tillable acreage. It worked OK for a few years, then somehow the crops he left for me always looked far worse than his. I was up there one day when they were top dressing urea on the corn and they skipped my areas completely. The same thing also happened with some spraying steps.

He always claimed it was an honest mistake, but I don't believe it. That situation just ended up not being worth the hassle. I'm looking for a new farmer this year and it will be a straight rent situation and I'll take care of the plots myself. If you have a farmer you can trust then it can work, but it has been my experience that corners are cut on the acres left for wildlife.
 
Disclaimer: My approach with my small tillable acreage is not profit-driven. Having the tillable land farmed has a definite positive impact on game populations on my land in the hills of eastern Ky, good farmers do not seem to be in abundance in the area, and I don't "need" the cash rent to pay the bills.

I only have ~12 tillable acres, and it is not high quality ground - heavy clay, and some is low so is often wet in spring and at harvest time. I have always had the farmer leave ~1 acre of beans standing. First 7 years, the farmer was one who rented from a lot of folks and wasn't the best farmer. Going rate per acre when I started out in 2012 was $75/acre in the area. I told the farmer $300 cash and leave an acre standing every year. Those first seven years were hit or miss, based mostly on his poor farming practices - late planting, ill-timed herbicide application, and (I suspect) little fertilizer. One year he "forgot" the rate and paid $200 rather than $300. It was to the point where it was entertaining just watching to see how he could screw things up. One year we were there the day before firearms opener, he showed up to begin harvesting beans, took the turn too short and dumped the bean head into the creek. Still, in spite of all the shortcomings, the deer and turkeys took notice that our property was the place to be from December to March. Year 8 he never showed up at all and never returned phone calls. Not a problem for me as the small amount of cash means little, and the land got a year off.

A neighbor just down the road crop farms as a side hustle, and had asked about farming my tillable. His fields always looked clean, his farming was on time, and he holds down a good-paying day job. I called him up and offered him the same deal I had given the other farmer, telling him I want it to be a good deal for both of us. He jumped on it, he's farmed it since, and does an awesome job. I never wonder if he'll get around to paying rent.

For whatever reason, no one else in the neighborhood seems to leave crops stand, and very few folks grow any corn at all, ever. This time of year, my acre of standing beans is immensely popular with the deer. Fifteen bucks are hitting it over the last four weeks, which is a LOT for my area. Most years that acre (and the spilled beans in the rest of the fields) feeds critters through late February, unless there's a mast crop failure - in which case the turkeys live in it all day every day and beans run out by Feb 1.
 
I used to have my farmer leave a couple acres of crops standing in return for a lower price per acre for the rest of the tillable acreage. It worked OK for a few years, then somehow the crops he left for me always looked far worse than his. I was up there one day when they were top dressing urea on the corn and they skipped my areas completely. The same thing also happened with some spraying steps.

He always claimed it was an honest mistake, but I don't believe it. That situation just ended up not being worth the hassle. I'm looking for a new farmer this year and it will be a straight rent situation and I'll take care of the plots myself. If you have a farmer you can trust then it can work, but it has been my experience that corners are cut on the acres left for wildlife.
I move my food plot in Iowa every year . Otherwise it doesn’t seem to grow as well . 😐

200 bushel corn feeds more deer than 100 bushel !
 
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