Agricultural Leasing Flexible Cash Leases

Flexible Cash Rent Leases Center For Commercial Agriculture Here’s how a flexible cash rent lease works. assume current cash rent is $250 per acre. base cash rent will be $225, or 90% of current cash rent. the farm uses a corn soybean rotation. using cost budgets for corn and soybeans, crop revenue triggers are $943 for corn and $677 for soybeans. Here’s how it works. base cash rent is set at 90% of current cash rent. crop revenue triggers are computed by adding base cash rent to non land costs. the landowner share above the crop revenue trigger can vary, but for this example, it’s 50%. a bonus is added to the base cash rent if actual crop revenue is above the triggers.

Flexible Cash Crop Lease Agreement Template Fill Out Sign Online And This can be tied to factors like crop yield, commodity prices, or a combination of both. advantages of flexible cash leases. flexible cash leases provide a balance of risk and reward. farmers benefit from lower fixed costs during poor years, while landowners can potentially receive higher payments during good years. Trying to forecast corn and soybean crop revenue a year in advance has led many farmland owners and operators to shift from the more traditional cash rent farmland lease to either a flexible cash rent lease or a hybrid "base rent bonus" cash rent type of lease. these types of leases allow for increased cash rent if cash grain incomes rise. at. See the ag decision maker leasing webpage for more on farmland leasing. the flexible lease worksheet shown below is also presented in the accompanying "pdf" file that you can access by clicking here or on the icon above. alejandro plastina, extension economist, 515 294 6160, [email protected]. william edwards, retired economist. A flexible cash rent arrangement for cropland has specific advantages and disadvantages. advantages of the arrangement include: a landlord can share in additional income from unexpected increases in crop prices or above normal changes in yields. for tenants, risk is reduced. cash rent expenses are lower if crop prices or yields are less than.