Farm Rent Evaluator    

By John Fulton

[NOV. 29, 2004]  URBANA -- It seems as though the majority of the farm rental situations have gone to cash leasing. At least those are the situations you hear about. I would be a rich man if I had a dollar every time I was asked, "What's the going cash rent?" There is no such thing, and the range goes from about $75 per acre to well over $200. You just don't hear about the lower cash rents.

In order to help with establishing or comparing rents, the University of Illinois Farmdoc team has developed an Excel-based spreadsheet to assist farmland owners in comparing types of lease arrangements. The tool is also useful in assessing risk to both the landowner and tenant. For landowners seeking to build an equitable lease arrangement, Farm Rent Evaluator can help to do just that.

Farm Rent Evaluator uses 30 years of price and yield data (by county) in determining financial risk to owners and tenants. The landowners or farmers can use default input and crop prices or tailor the situation to their own costs and forecasted prices.

The tool compares cash rent, crop share, variable cash leases and custom farming. The results then compare the different lease arrangements according to average returns, probability of losing money, and best or worst-case scenarios. Farm Rent Evaluator can be downloaded for free at www.farmdoc.uiuc.edu/farmland/index.html.

To download the evaluator, click on "Rent Evaluator" (on lower right of the above Web page). To run Farm Rent Evaluator, macros must be enabled. Excel security level must be set on medium. Click: Tools > Macro > Security > Medium > OK. Microsoft Excel is required.

Ag economics websites

Many websites exist that can help answer your questions on ag econ questions. Of course the U of I Farmdoc website is one of the best and has actually become the website for several land grant colleges in the north central area of the country. Here are some direct link websites to help you find what you need:

General information

• www.farmdoc.uiuc.edu

• www.extension.iastate.edu/pubs/fm3.htm

Specific topic information

Farmland values:

• www.farmdoc.uiuc.edu/manage/
  land_value.asp

Famland rental arrangements:

• www.farmdoc.uiuc.edu/manage/
  leasing_fact_sheets.html

Government program information:

• www.farmdoc.uiuc.edu/marketing/index.html

• (There are lots of government links.)

Marketing advice:

• www.farmdoc.uiuc.edu/marketing/
  newsletters.html

Commodity prices:

• www.farmdoc.uiuc.edu/weatherprices/
  index.asp

Custom farming rates:

• www.extension.iastate.edu/Publications/
  FM1698.pdf
  [To download the Adobe Acrobat Reader for the PDF file, click here.]

Farmland lease forms:

• http://www.farmdoc.uiuc.edu/legal/
  farm_lease_forms_abs.html

Specialty crop information:

• web.aces.uiuc.edu/value/

Crop insurance:

• www.farmdoc.uiuc.edu/cropins/index..html

Managing rent payment risk:

• www.farmdoc.uiuc.edu/legal/
  securingAg_rent_table.html

Managing tax issues:

• www.farmdoc.uiuc.edu/legal/
  taxation/articles/index.html

• www.farmdoc.uiuc.edu/legal/
  taxation/links.html

[John Fulton, unit leader, Logan County Unit, University of Illinois Extension]

Previous columns by John Fulton

• Christmas tree selection and care

• Seed selection information, pesticide certification, helpful Web pages

• Crops continue to pour in

• Logan County Commercial Corn Plot results