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Showing posts from April, 2015

Flexible Farmland Rental Agreements Shares Risk between Landlord and Farmer

by David Bau, Extension Educator

The vast majority of farmland rental agreements are cash rental agreements where landlord receives a cash amount in spring or half payment in spring and fall or payment in fall.  With cash rental agreements, the landlord knows how much income they will receive and the farmer has the risk to grow a crop sufficient to generate enough income to cover input costs, the rental payment and hopefully have some left for profit. Current 2015 forward contract prices available are $3.50 for corn and $9.00 for soybeans, and that poses a problem for farmers with breakeven prices about $4.50 per bushel for corn and $9.00 for soybeans to cover the cost of production.  With a cash rental agreement, the farmer bears all the risk of prices not reaching the breakeven prices during the year, this is when a flexible rental agreement would work better.

With a flexible agreement landlords can still have a minimum rental payment in spring and then have an additional payment in…

Profitability of Dairy Farms in Minnesota

A recent analysis of the profitability and viability of dairy farms in Minnesota indicates that total family income on these operations is greater than US median Income.  FinBin data, supported by the Center for Farm Financial Management, was utilized in this analysis. 

2014 FINBIN Report on Minnesota Farm Finances

2014 Minnesota Farm Income Report

Strong prices and lower costs brought record profits to many Minnesota livestock farmers in 2014, while crop producers saw earnings deteriorate for the second consecutive year.

Those were among key findings in the annual farm income analysis conducted jointly by Minnesota State Colleges and Universities (MnSCU) and University of Minnesota Extension. Researchers pointed to signals that both livestock and crop producers, however, will face tougher times this year.

Overall, the median net farm income for farmers included in the study was $43,129, up 3 percent from 2013 but substantially lower than record profits earned in 2012. The median income for crop farms was slightly more than $17,000 while the median for all livestock producers exceeded $138,000. Net farm income includes the farm's contribution to family living expenses, income taxes, retirement and business growth. "The public needs to recognize that these farms are businesses that need to earn a return on their investme…