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Farm Rental Agreement Iowa

The ASL no longer establishes that, as part of a lease agreement that allocates return risk between the tenant and the landowner, all eligible USDA payments must be allocated equally to the risk. All payments are now made to the tenant. In such cases, these payments may be included in the gross revenue estimates used to determine the amount of rent due. An interactive whiteboard for flexible agricultural lease analysis is available on the Ag Decision Maker website at www.extension.iastate.edu/agdm/wholefarm/xls/c2-21flexiblerentanalysis.xlsx. Xlsx The interactive whiteboard (xlsx) for flexible farm lease analysis is displayed in the xlsx file which you can access by clicking here or on the icon above. When the plants stored on the farm are finally sold, any deviation from the estimated yield can be used to adjust the rent paid for that harvest. Estimated yields should be corrected to a standard moisture content, for example. B 15% moisture for corn. Iowa State University Extension and Outreach Publication FM Iowa Farm Lease Form 1538/AgDM C2-12 contains a standard farm rental form.

ISU Extension Publication Computing a Cropland Cash Rental Rate FM 1801/AgDM C2-20 contains information on determining fair cash rent. Futures prices available before harvest may also be included. Many agricultural producers begin harvesting during the spring or summer months. In this case, the use of the price offered for the harvest one day in the month from March to December may, for example, best reflect the total value of the harvest. Landowners and tenants should think carefully about the nature and degree of risk they wish to take. Risk-taking involves larger losses if prices or returns are low, but can lead to higher profits in the best years. Landowners who wish to benefit from a fixed income from their agricultural investments may have to accept a lower long-term rent than those who are willing to share the risk. Tenants with significant financial obligations should also consider other ways to reduce risk, for example. B the taking out of crop yield insurance.

The flexible leasing formula to be followed should be tested using different price and return options to illustrate the fluctuation band of potential cash rents. Regardless of the type of agreement accepted, it must be described in writing (with an example) and is part of the written rental agreement. The page below can be used as a leasing supplement to set flexible rental terms….

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