• Over 300 copies of the summary publication have been distributed in the River Valley Extension District, over 500 in the Post Rock District, and 100 in the Phillips-Rooks District. Countless more copies have been downloaded from their extension websites.

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Pasture Crop Pasture Crop Pasture Crop

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River Valley Post Rock Rooks County

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Land Lease Surveys for Local Extension Units

Figure 2. John Forshee Presenting at River Valley District Lease Meeting.

Figure 3. Average Cash Rent (Price Per Acre) for Pasture and Dryland Cropland in 2012 and 2013 in Each Extension District.

Rooks County $8.50 $7.00 $12.00

Post Rock $9.75 $4.00 $30.00

River Valley $8.50 $4.00 $15.00

Figure 5. Average Rent (Price Per Acre) Including Minimum and Maximum Values for Grazing Crop Residue in 2013 for Each Extension District.

Figure 1. Land Lease Publications

Cropland

• Cash Rent: This is reported in dollars per acre paid to the landlord for a year-long lease of the ground. The tenant assumes all of the production and price risk and the landlord is given a fixed cash payment.

• Crop Share Rent: In this arrangement the landlord pays a percentage of certain input costs and then “shares” the output (crop yield) with the tenant. What inputs are shared varies by arrangement along with what percentage of the crop is given in payment to the landlord. This method spreads risk out between the landlord and tenant, but gives the landlord the ability to capture a part of the actual income generated on that agricultural land.

• Flex-Rent: This may be the most complicated arrangement and can be negotiated in a number of ways, but in many cases most equitable for landlords who do not want to pay input costs. A base cash price is determined (similar to cash rent), and then bonuses are paid on yield, commodity price, or revenue, if the tenant generates more than a set “trigger” amount. This shares some of the risk between both parties as in good years bonus revenue will be shared, but in less fortunate years the tenant will only be responsible for the base amount. Some arrangements also flex down, or reduce base rent paid if yields or crop prices drop below a trigger amount.

Pasture

• Pasture is typically rented on a strict cash basis; usually in dollars per acre for a grazing season. Some arrangements may use dollars per pair for a grazing season, dollars per day, or dollars per Animal Unit Month (AUM).

Arrangements for the leasing of agricultural land vary widely from one producer to the next, but generally fall into the following categories:

• In the fall of 2012 and 2013, surveys were sent to two landlords or tenants in each township of the counties comprising the Phillips-Rooks District (Rooks), Post Rock District (Smith, Osborne, Jewell, Mitchell, and Lincoln), and River Valley District (Clay, Washington, Cloud, and Republic).

• Questions were asked on lease rates, types of arrangements, characteristics of landlord/tenant relationships, and much more.

• Each district compiled their own results and developed publications to distribute the information.

“So appreciate the localized survey data to use in our operation.”

“Very good for decisions made between tenant and myself.”

“We will soon be negotiating a written lease, so this information today was very valuable.”

“Appreciate non-biased information-helps to make informed decisions”, “Gives a good starting point for negotiations.”

“Appreciate presentations that give me information that I can take to my business and apply-valid to my needs.”

• River Valley also held two summary meetings where cropland and pasture results were discussed and general information was given on negotiating agricultural leases.

• Post Rock presented the survey results at several educational

Water Source 70.7% 28.6% 0.8%

Labor for Fence 77.9% 19.9% 2.3%

Materials for Fence 24.4% 72.5% 3.1%

Weed/Brush/Tree Control 50.4% 34.6% 15.0%

Figure 4. Common Responsibilities for Pasture Maintenance Practices in RVED and PRED Combined.

According to the 2012 Census of Agriculture, 50.8% of all ag land in Kansas is operated on a leased basis. Given the capital intensive nature of agriculture today, the increasing number of absentee land owners, the fluctuation in agricultural markets, and the competition to acquire land for leasing, it is important for producers and landowners to make informed decisions based upon sound economic principals and reliable information.

Sources for leasing information are fairly limited for area producers. Landowners and tenants frequently turn to K-State Research and Extension offices for information on the “going rates” of pasture and cropland leases. Several local K-State Research and Extension districts have recognized the value of local rental rate information to have available for their clients and began conducting annual lease surveys.

Each district has developed publications that are a compilation from the local surveys returned and do not represent a random, scientific survey. The objective of this project is to provide local data for all landowners and tenants of the respective districts and to educate them on the different types of leases and equitable leasing arrangements through the resulting publications and lease meetings. Phillips-Rooks, Post Rock, and River Valley Districts have been providing this service for respective consecutive years. For homogeneity and conciseness, this poster discussion covers the 2012 and 2013 survey years of these Extension Districts.

The survey data displayed the following results:

• Crop Share- these shares are typically paid in a 33%/67%, 40%/60%, or 50%/50% (landlord/tenant) arrangement.

- Irrigated land commonly fell in the 50%/50% type arrangement. - The majority of the shared arrangements were in a 33%/67% arrangements. - Common shared inputs included seed, fertilizer, pesticides, and crop insurance. - Landowners typically provided terrace/structural maintenance and the majority of the irrigation equipment and maintenance.

• Cash Rent

• Crop Residue

• Pasture Maintenance Practices

• Flex Rent- becoming more popular but not widely used yet.

- Base rent ranged between $60 to $100 per acre. - Flex direction, determination of trigger, and bonuses varied with each arrangement.

meetings.

• Participants in PRED and RVED summary meetings were given evaluations after the programs. Some of their comments were:

Figure 6. PRED Women in Ag Meeting with a Presentation by Sandra Wick on Leasing Arrangements and survey results.

Rachael Boyle, John Forshee, Kim Larson, Robin Reid, Sandra Wick Phillips-Rooks District, Post Rock District, and River Valley District

K-State Research and Extension, Kansas State University