“What are you paying for rent?”—it’s probably one of the most cringe-inducing questions a farmer can be asked. For those outside of agriculture who don’t understand why, it’s akin to asking someone how much money they make. It’s just not something most farmers are willing to discuss openly.
Talking about rent is often considered taboo, even outside of one’s immediate family or farm circle. The conversation is usually limited to farmers, their families, and occasionally their banker. Of course, it becomes unavoidable when negotiating with landlords—whether it’s for a new farm or renewing a lease on an existing one. So how do both farmers and landlords determine what’s fair?
The Landlord’s Perspective
The days of traditional 1/3rd-2/3rd crop share agreements are nearly gone, with very few still in place. Cash rent—often with some flexible terms—has become the standard. If you’re a landlord, you have several options, including hiring a farm manager or renting out the land yourself. If you’re renting out your farm, consider using county-specific rent data provided by local universities, which often include average, high, and low ranges. These same resources can be valuable for farmers when determining what to offer on a new lease or when evaluating whether their current rent is in line with the market.
For example, in the northern tier of North Dakota, where potatoes and sugar beets are grown, some counties have cash rent ranges from as low as $60 per acre to as high as $400 per acre. Understanding where your land fits within these ranges is crucial. Many land professionals and agricultural advisors can help interpret these numbers if you’re unsure.
Top-dollar rent isn’t always the best option. Consider factors beyond price, such as the tenant’s farming practices, land stewardship, and personality. Sometimes, securing an average rent alongside a long-term relationship with a farmer who genuinely cares about your family and land can be worth just as much—if not more—than chasing the highest bid. There are all sorts of horror stories out there of those who have taken the “highest bidder” only to be left with no tenant in a few short years and land that’s been left in very poor condition.
The Farmer’s Perspective
Farmers should recognize that demographics among landlords are changing rapidly. The days of most landowners having direct ties to the farm are dwindling. A new generation of landlords may take a more hands-on approach, wanting input on what’s being sprayed on their land or expressing curiosity about farming practices.
Additionally, it’s wise to begin softly talking about transition plans with elderly landlords if you can. When ownership changes—through sale or inheritance to family—you want to ensure that the next generation is aware of you and your eagerness in continuing the relationship.
At this juncture, heirs often feel slighted for a variety of reasons. Some might believe a farmer took advantage of their elderly parents by paying what they see as below-average rent. On the other hand, those parents may have farmed through tough years themselves and understood the struggles, choosing to offer a loyal tenant a lower rent out of appreciation. And yes, there are cases where some farmers take long-term relationships for granted—neglecting to adjust rent when it should be or failing to offer a year-end bonus after a big year on the farm.
Regardless of the situation, tenants should recognize when an adjustment is necessary. Those who never update their rent or fail to offer a year-end bonus in good years risk damaging their relationship with the landowner. Taking care of your landlords can go a long way toward ensuring they take care of you in return. And when a transition occurs, maintaining goodwill with the heirs can be invaluable.
