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The Huron Expositor, 1982-11-03, Page 2708 - THE HURON EXPOSITOR, NOVEMBER 3, 1993 What to do with rented land BY ART LAW SUN I'd like to avoid those winter calls that go some- thing like: "I just- rented u couple of farms at 1,1'5. per acre. What can 1 grow that is legal and wilt make money?.' The man has just won a ,bidding contest. Now he's wondering why. What will he do with his prize? LAND POTENTIAL The re are a few concerns to look at before you get in- volved in putting 0 price on leased land. The first concern should be what is the tan's potential.' The land may -be fertile, level and tile drained. But two pieces of propgrty fitting that description will have varying potential. You need to know something about the crop-• ping history. Has the land been in a good crop rotation? Has it been manured routine- ly? Has it had plowdown crops? If the answ;cr is "yes" to any or all of these ques• tions, you've probably got land with above average potential. if the land has just pro- duced a couple Crops of beans you should discount your yield potential for another crop of beans by maybe 30 per cent. Corn following corn can he discounted by at least 10 per cent or even 15 to 20 per cent if there were two succes ° sive prior crops of corn. You'd like to avoid repeating the same crops on the same land, Know the land you want to rent, What are the weed problems? Are there erosion problems? What is the herbs• ride history of that land? If you don't know the -answers you could be in for some unpleasant and costly sur= prises. Also, find ot4t how the land was treated. Was the land ploughed 20" deep this year or was the crop "mud- ded off". BUDGETING Once you've got a good feeling for the land's poten- tial and you know what crops you could grow, move on to Our budget. I'd suggest spending extra time in calculating costs, Ignore the returns side for the time being. • Operating costs are usually not problem. You know the production recipe you'll use and the ingredients you'll need. Usually last year's costs plus an increase for inflation will give you a good • cstintatc;of input costs, Overhead costs are another story. The DIRTI Five: De- preciation, Interest, Repairs, Taxes and insurance are really tricky. I'd suggest you should look al your last year's financial statements. If you have a heavy debt load, I'd suggest using debt servicing costs (principal plus interest) 'instead of depreciation. Debt servicing costs will better reflect your cash flow needs. I would also suggest that you need to take living expenses into account. Living costs usually are a regular part of your cash flow. Once you have a total of the DIRTI Five plus a living allowance you'll have a close estimate of total overhead costs. You'll have to comc up with that many dollars re- gardless of what crops you grow, or how much you produce, Divide the total overhead figure by the num- her of acres you expect to crop. Now you'll know your fixed costs per acre. You may say Why bother with all this pencil pushing? 1'11 just use custom rates to account for all my equipment costs,".The fact is that many farriers actual costs are well above custom rates. If you want to know how many dollars you'll likely have to put towards land costs you have to know your costs, Your costs will likely be different than you neighbour's.. WHAT TO AIMi FOR You've done your home- work. You know the potential of the land you want. You know. you costs and approxi- mately how much you can afford to pay. The lease arrangement you'd like to work out should meet at least these two objectives: I) The lease should give al good tenant dome assurance of a number of years use of the land -if he does a good job, 2) The landlord should be assured that his land will be well maintained. Soil conser- vation and fertility are part of the deal. Weeds should be controlled. Fence and drain- age maintenance should be taken into account. The (ease has to be fair .to both parties. The tenant has to be able to make a profit. The landlord wants his asset to appreciate in value. His is a long term investment. Gbod management of his land and keeping it in good condition are his primary concerns. If you are a prospective tenant you might ask yourself why some people seem to get consistently better deals on their land. Other people may offer more money, but have trouble getting land. . The difference may be the added touches that show they care. Things like cleaning up old fence rows, moving stones, odd jobs that don't cost much, but keep the landlord happy. Keep the little things in mind when you're negotiating with the land owner: Time is the real test of any landlord -tenant relationship. Because circumstances change, your deal has to be flexible enough to change with the times. Share arrangements are gaining popularity because of the flexibility in adjusting to changing yields and prices. Share arrangements need re- gular examination to make sure both parties stay satis- fied. No single arrangement will fit every case. I know there will still be bidding contests for some cash rented land. Before you get caught ujs4n the bidding, remember the guy that called me. Know the land's poten- tial and problems. Know your costs and what you can afford. Chasing a deal can be tike a dog chasing a car. You may not know what to do when you catch it. On farm experoence The Ministry of Agricul- ture and Food in conjunction with the Youth Secretariat, is offering an employment pro- gram for youth in Ontario: To be eligible for employment, youth must be between 16-24 years of age and looking for work for at least • twelve weeks, Preference will be given to those who want to work and will not necessarily be based on educational qual- ifications. The employment period is for 12.20 weeks beginning .no earlier than November 8,1982 and ending no later than March 30, 1983. Deadline for applications for ffer d initial employment is No- vember 1 , 1982. The youths will be placed on farms with the idea that they will be obtaining on-the-job training. The employee must be willing to do any sort of farm labour, including cleaning barns, keeping records, operating machinery and general main- tenance. Horticultural enter - prizes are also included. Host farmers for the pro- gram are also required. They must be willing to train youth for the winter months, There is no direct cost to the farmer; however, in sothe cases room and board may be requested. WITH EACH $5.00 PURCHAS YOUR CHOICE OF PATTERN ,. PRICES EFFECTIVE UNTIL .SATURDAY., NOVEMBER 6, 1982 `\ 'ROTH STORE HOURS: MONDAY, TUESDAY, WEDNESDAY • 9-6 PM THURS. &PRI. • 9-9 PM -SATURDAY • 9.6 PM SEAF0RTH EVERY WEDNESDAY IS SENIOR CITIZENS' DAY - 5% DISCOUNT OR FREE DELIVERY - WE RESERVE THE RIGHT TO LIMIT QUANTITIES( FROM THE DELI MAPLE LEAF CHICKEN, MAC & CHEESE OR DUTCH LOAF COOKED MEAT LB. 1.68 ICNECHTEL AIM MAPLE LEAF JAGDWURST LB. 2.98 MAPLE LEAF PORK & BACON OR BAKED PORK & VEALLOAF COOKED MEATS LB. 2.48 MAPLE LEAF MOZZARELLA CHEESE LB. 2.88 SMOKED PORK SHOULDER PICNIC LB 1.28 MAPLE LEAF 500 G PKG 1 VARIETIES BACON 1e 2.68 MAPLE LEAF SELECT ASSTD. VARIETIES 171 G PKC.. LUNCHEON MEATS LB 1.18 MAPLE LEAF BY THE PIECE) VISI(ING BOLOGNA to. 1.18 MAPLE LEAF PURE PORK 375 G PKC. LINK SAUSAGE LB. 1.49 MAPLE LEAF COUNTRY KITCHEN DINNER HAM LB 4.48 HAI F CRYOVAC MAPLE LEAF 454 G PKG WIENERS LB 1.68 AN Purpose' or Whole Wheat FIVE ROSES FLOUR 520. g Pkg. Duncan Hines layer Assorted Varieties CAKE MIXES .99 (McCain Fancy Assorted;Vurieties FRENCH FRIES 1.51<g Bog er"s Vac PAW vs VEaGtTtlB1E JUICE Groceries QUAKER MUFFINS AND COOKIE MIXES 900 G ASSORTED VARIETIES HABITANT SOUPS 28 OZ, .95 1.79 DURHAM CORN STARCH 500 0 .69 10tOZ. TIN COW BRAND BAKING SODA 500 G .69 SUNMAID SEEDLESS RAISINS 750 G PKG, COUNTRY STYLE DIETRICH ROLLS .69 PKG. OF 12 WESTON APPLE SNACK BUNS PKG. OF 6 .99 BEE HIVE CORN SYRUP 1 LITRE 12.99 MAPLE LEAF MINCEMEAT 24 OZ. REG. OR RUM/BRANDY WESTON CHOCOLATE SWISS ROLLS PKG. OF 4 HEINZ TOMATO SOUP 10 OZ, TIN CATELLI PLAIN SPAGHETTI SAUCE PURITAN ASSORTED STEWS s, 1.69 680 G. LIBBY CANNED PASTAS PROD, USA CANADA 111 CALIFORNIA TANGERINES PROD. USA CANADA 51 1.29 RED EMPEROR DO2. GRAPES PROD. USA CANADA 811 FLORIDA PROD, ONTARIO SNOW WHiTE MUSHROOMS LB 1.79 PROD. ONTARIO 20 Le. BAG PROD. USA CANADA a LARGE GREEN PEPPERS 5/1.00 TROPICAL ASST VAR111115 1", POT GREEN PLANTS .79 PROD. USA CANADA 41 POTATOES 1.29 BROCCOLI BUNCH .89 PROD. ONTARIO PROD. USA CANADA a1 10 07. CELLO RUTABAGAS 3/1.00 SPINACH BUNCH .89