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Home My WebLink AboutFarming '91, 1991-03-20, Page 11FARMING ’91, WEDNFSDAY, MARCH 20, 1991. All. Farming '91 How much is too much to pay for land rental C^utting Costs BY BRIAN HALL OMAF FARM MANAGEMENT SPECIALIST Crop input costs are expected to be up 10 - 20 per cent this spring. Also with crop prices not expected to be any higher this fall, it will take a sharp pencil to budget a profit this year. Both landlords and tenants are looking for an equitable way in deciding on land rents. In order for land rental to be as painless as possible priorities need to be established. The first priority for the tenant is to be able to cover the variable cash Carrots, other veggies keep cottie healthy Continued from page A10 carrot, he says. Although foreign objects from rocks to tools to bits of wire sometimes make their way into the by-products and on into the mangers, the cattle pick their way around them and Doug says he has never lost an animal to hardware. There is plenty of room for more farmers to switch to by-products as animal feeds, he says. “There’s lots of it out there,” he says of the by-products. He admits that having their own trucking company has helped the Howatts both in terms of finding sources for feed and in trucking (they truck about 75 per cent of their own feed). They also find and truck feed for other farmers. Of all the feeds they use, Doug says, about the only one other farmers wouldn’t be able to get is the turnip pulp since they use the entire supply available in Blyth. There are lots of other vegetables around, however. The problem with the system is that you can’t go to the OMAF office and pick up a book on how to use it, he says. It requires experi ence and getting to know the feeds and your animals. Small operators would also have trouble using up some of the feeds fast enough and preventing spoil age, he says. There is no spoilage on the Howatt farm. Doug esti mates he doesn’t throw out even a bucketful of spoiled feed. Ail he has to do is clean out the manger to remove the stones that sometimes get into the potatoes. The one problem he finds is that the food pit attracts birds. “We must have every blackbird in East Wawanosh township,” he says. Over the years he has tried several feeds he doesn’t use any more. He recalls trying cotton seed then saying “forget it!” because he didn’t like it at all. He shakes his head wondering why some of the products are available for him to feed to cattle. The carrots are perfecilj good except they’re too large or twisted or have split ends or arc broken to meet the fussy consumer market but he wonders why they couldn’t be distributed through food banks. It’s the same with the cereal and the cookies, he says, which are perfectly good and could be helping out people in trouble. Still, feeding them to cattle is better than seeing them wasted in some landfill The Howatts make use of their own byproduct. They spread the manure on their cropland and use no chemical fertilizer anymore. In fact their land is built up so well, Doug says, they’re going to have to find somebody else to take their manure for a while. All that’s needed, he says, is to do some soil testing so they can balance out the soil needs. costs of growing the crop. These costs include such items as seed, fertilizer, fuel, repairs, drying, marketing, etc. The second priority is to allow the tenant at least enough income to pay for fixed costs. Fixed costs would include machinery depreciation, insurance, taxes, etc. If the first two priorities can be met, then the landlord and tenant can look at dividing the profit. A failure to generate a profit means the tenant will either get tired of working for nothing and leave, or go out of business. Both the landlord and tenant will want to establish how productive the land is. Tile drainage of land can boost crop yields by 20 per cent. Tenants know that drainge improves yields and also increases field work timelessness. One ten ant told me of an arrangement made with a landlord in a long term lease agreement, where the tenant paid for tile draining the land. Obviously the tenant and landlord had a very good relationship and both worked towards the goal of both landlord and tenant making more money from the land. Other things such as crop rota tion and soil conditions can im prove yields by 10 per cent. Also, soil type, stoniness, weeds and soil fertility all have an effect on the rental value of a property. The future performance of land is very much related to the way it has performed and the way it has been used in the past. As a landowner and tenant it is important to record a field history to help document the productive value of each field. Information sheets for recording field histories are available from the Clinton OMAF office. A good long term agreement can foster good stewardship. The ten ant should get to reap some of the rewards of good management. The landlord will also benefit from these arrangements. One year, cash deals that go to the highest bidder promote short term thinking and exploitation of the land - rotation and special needs are forgotten. Over the long term, no one will want to rent this type of land which has been “run down”. Landlords and tenants are also looking at alternative land rental arrangements other than cash. There are as many different types of land rental agreements as there are landlords and types of fields. The type of agreement will depend on the productivity of the land and the relationship the tenant and landlord have, and the goals of each. Some landlords enjoy sharing some of the risk of growing and marketing a crop such as in a 50/50 share crop agreement, while other landlords prefer a guaranteed num ber of bushels agreement. Another type of agreement is the variable share agreement within the land lord’s share of the crop varies with the crop yield. At a corn crop yield at only 80 bu. the landlord receives the value of 12 bu. of corn (15 per cent). If, however, the corn crop yields 120 bu. the landlord might receive 38 bu. (30 per cent of the crop). The variable share agree ment can be adjusted to each situation. If you would like further informa tion on land rental arrangements, contact the OMAF office. The office has example agreements of cash and share rental arrange ments, an essential part of all rental deals. 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