NotFarmerBob
Freshman Member
- Joined
- Feb 16, 2012
- Professional Status
- General Public
- State
- Connecticut
Hi All,
I really enjoy the message board and the informative comments I’ve been reading. I just wanted to throw out my scenario and see if you all had any thoughts. My family owns 1,300 acres of farmland in Southwest Indiana (beans and corn primarily). I’d say just over 1,000 of the acres is farmed with the rest being woods, some pasture for a handful or so cattle, and some land that gets flooded and therefore not farmed. From what I’m told the tillable land is of a good to very good quality as is a lot of the land in the area. We rent the land to some farmers who have seemingly taken good care of the land for years and years. Their annual rent to us is roughly 120k. We pay for taxes, insurance, and for major capital improvements like the 95k grain leg we installed last year. There almost always are sizable capital improvements every couple/few years. There are a handful of the typical buildings/structures you would expect on a farm of this size. There is also a modest house in which one of the farmers lives.
It is my guess that the current farmers are making an absurdly large income on the land in the recent years and our deal is very under-market and I think we need to renegotiate with the farmers and/or look to sell the land as we have no business being absentee landowners. Adding in the near meteoric rise in farmland prices in recent years it furthers my opinion that it might be a smart time to explore our options to sell.
If we were to keep the land and renegotiate a deal with the farmers I’d like to set up an arrangement where we get a % of the cash receipts the farmer receives. In good years we all do better, in worse years we all make less. Any thoughts what a reasonable % of cash receipts would be – is 20% close?
Also, what would be a very rough range for good to very good ag land in the area per acre? 6k-8k? I just would like to know for purposes of going to my family to see if I can get everyone onboard to explore all our options. I’ve read Purdue’s Ag report from last year which was quite informative but just wanted some other opinions as well .
Also, any estimates of what the farmers took home in the last year. Can they make a few hundred an acre, net and excluding their machinery costs?
And does anyone have a good recommendation for an appropriate appraiser in SW Indiana? Near Vincennes or Evansville. Would I be looking for a Certified General Appraiser?
Thanks for helping me wrap my head around this.
I really enjoy the message board and the informative comments I’ve been reading. I just wanted to throw out my scenario and see if you all had any thoughts. My family owns 1,300 acres of farmland in Southwest Indiana (beans and corn primarily). I’d say just over 1,000 of the acres is farmed with the rest being woods, some pasture for a handful or so cattle, and some land that gets flooded and therefore not farmed. From what I’m told the tillable land is of a good to very good quality as is a lot of the land in the area. We rent the land to some farmers who have seemingly taken good care of the land for years and years. Their annual rent to us is roughly 120k. We pay for taxes, insurance, and for major capital improvements like the 95k grain leg we installed last year. There almost always are sizable capital improvements every couple/few years. There are a handful of the typical buildings/structures you would expect on a farm of this size. There is also a modest house in which one of the farmers lives.
It is my guess that the current farmers are making an absurdly large income on the land in the recent years and our deal is very under-market and I think we need to renegotiate with the farmers and/or look to sell the land as we have no business being absentee landowners. Adding in the near meteoric rise in farmland prices in recent years it furthers my opinion that it might be a smart time to explore our options to sell.
If we were to keep the land and renegotiate a deal with the farmers I’d like to set up an arrangement where we get a % of the cash receipts the farmer receives. In good years we all do better, in worse years we all make less. Any thoughts what a reasonable % of cash receipts would be – is 20% close?
Also, what would be a very rough range for good to very good ag land in the area per acre? 6k-8k? I just would like to know for purposes of going to my family to see if I can get everyone onboard to explore all our options. I’ve read Purdue’s Ag report from last year which was quite informative but just wanted some other opinions as well .
Also, any estimates of what the farmers took home in the last year. Can they make a few hundred an acre, net and excluding their machinery costs?
And does anyone have a good recommendation for an appropriate appraiser in SW Indiana? Near Vincennes or Evansville. Would I be looking for a Certified General Appraiser?
Thanks for helping me wrap my head around this.
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