There are some real chicken poops in the desert..
Now back to the basics...
the insurance, for risk, as in multi-peril....subsidized, but then again, like the tables in Reno, YOU pick what
level and % you want BEFORE the cards are played(crop planted)...don't get to see what the weather will do
after the cards are played(crops planted)...the reason it was/maybe will be subsidized was to give a risk protection
to pay the bills of the intended planted crop if it failed, or % of failure.
We have been told it doesn't matter what the premium is...just get the highest...that is bs...from experience, have a
crop that just exceeds guarantee and see how much profit is left after paying the premium. (that's were the cheating
and hiding production comes into play....for years, a neighbor had a loss, but never bought any seed wheat..because the
loss bushels were hiding in a granary down the road...it's sick, but they exist.
Question here for ICF...the tax payer isn't subsidizing fire wind and hail insurance in your state are they? Maybe it is just
the way I read it, but I "thought" it could be taken that way....those insurances are NOT subsidized in this state anyway.
AND if the tenant doesn't have time to do some maintenance and mowing, what happens when chit happens and he gets
behind and the weather doesn't cooperate and he is doing all he possibly can with only seconds to spare, no time allowed
for down time, even family gets neglected....pride in what things look like for the land owner goes a long way in
Farm managers and managing companies...well, I've been involved with a couple, one of which WAS getting
more income for managing, than we were able to get from good management and marketing on our part...when
I mentioned the fact to the landlord, that I'd do it for them at half and sill be making more than what I was by
farming it, things got changed in a hurry..and the landlord could see why his profit wasn't as great as when
his parents and grandparents were doing it all themselves. There are some good farm managing agencies,
but they need to be checked and re-checked. The personnel within the agency changes, and so does the ethics.
I believe a trip to the local ASCS office to discuss what they have would be something to start with,
and then the NCRS for eligibility and land classifications and guidelines... AND
then an insurance agent you can trust to explain exactly how each insurance works.
THEN, believe it or not, visit the county agriculture extension agent with questions
from all the for-mentioned sources.
As far as length of lease, you will play hell in this part of the world getting anyone to go with a one year lease,
unless they already have more equipment and manpower available than what is needed for what they already operate,
or they just lost some acres and need a recovery cushion. There are situations there that are not always just
black and white, like two sides to every story.
For newbie, I think he and most other people who wanted to really get the maximum Investment ratio from there farmland holdings could probably catch on in 2-4 years to be efficent in running it by custom and paying the tennet $140-$160/acre for the work. I have been doing it so long, you tend to take things for granted, so maybe the learning curve is higher than I think. I have had friends that have been in newbie's position of inheriting a farm, and be living in the big city, with a job and they mastered custom farming eventualy and do ok at it. One guy I know inherited 2 sections (1,280 acres) and he started cash renting it all out. Then for a number of years, he customed 160 acres and cash-rented the other 1,120 acres. Then as he learned more from his mistakes and felt more comfortable he customed 320 acres, then 640, etc. till he now custom farms all 1,280 acres today. Let's face it,people make mistakes and it is alot less costly on a 160 acres than 1,280 acres. Thinking about it, it did take him a number of years to switch from all cash-rent to all custom.
48 and newbie,
As far as grain being stolen it's simple to avoid. Count every load leaving field. After combines are done harvesting, watch them unload and ride to the elevator with the last truck. Pick up your weigh slips. Pretty simple.
As far as a cash renter not taking care of the land even though it would benefit him to do it. It happens all the time when your tenant is too busy or too big to care. In my experience that is exactly the kind of tenant you get at a cash rent auction. Many big time farmers run their businesses from their computer and pickup and wouldn't have a clue or care to ask about tile lines, ditches, fence lines,etc.
I am not saying that cash rent isn't a good option, I think jabbers suggestions on finding one are better than an auction.
One other possibility if you are interested in farming for yourself. Sell the land and buy some closer to home.
If you give a yearly lease there zero likelyhood the guy will take care of the land. He has no incentive as he probably won't be running it next year. Leases should be three to five years in length. In a yearly lease situation, no ditches or treelines are taken care of. No fall tillage is done, and if conditions are good they will just mud through it rather than wait a little bit. Land is an ongoing affair and the management of any ongoing affair requires a little bit of continuity.
All cash rent is the norm around here and it works well, but 48 gives good advice about upfront rent. It is too easy to not pay or "renegotiate" after the crops are in otherwise. In a cash rent situation you leave a little bit on the table as ICF points out but you don't have any responsibilities or risks. Pretty good deal if you ask me. Think of that kind of situation as a government bond but with much better yields.
"You are only as good as your next success, not your last" Sir Jock Stirrup
Thanks guys, lots of good information here. If anyone has thoughts on converting to organic, please give me your thoughts. This is something I would be interested in doing, and since there is no debt on the farm, and we are not relying on any income from the farm, it could make sense for us.
Strictly cash rent it and then sell the dirt in the late summer of 2014