Saturday, April 10, 2010

Don't lie...

Just don't tell. 

In a moment of uncharacteristic honesty, I sat down with some colleagues to talk about cash rents.  Greg Vincent captures it well. But like most loudmouths, I have twinges of regret.

My basic position is rents are similar to your operating note interest rate, or your discussions with your attorney: private.  There is little upside in sharing that information other than commanding local attention for a few moments.

Moreover, such candor simply underwrites the predation of $10/acre-better renters. Nonetheless, these things seem to happen. So my current view of the problems is this:

If your relation to your landlord is based on 1) the ignorance of the landowner of current rental values, or  2) a check sent every spring/fall, THEN

You are not long for this business.


Anonymous said...

John , with your talk at the bank's get to-gether last week we came away learning that if we are going to continue farming we have to own more of our land , be more than competitive in land rental market (we have either given every landlord a raise or a farm improvement for this year) and build some long term relationships in our customers and suppliers,.... and the competition in the future will even be more brutal--still trying to get used too my banker having relationship manager on it rather than acc't manager... regards-kevin

Anonymous said...


In our area(Texas), competition for ground is just as fierce, but the stakes aren't as high as in the midwest. Our land just isn't worth what yours is. Our strategy has been to be fair with the landowners, if cash rents are easing up, we voluntarily offer our current landowners more money. We also take care of the land as if it was ours. If the landowner wants to provide funds for improvements, great, but most of the improvements we make will pay for themselves, so we aren't afraid to pay for most projects. As a result we build a great relationship with our landlords. We may or may not be the highest bidder on land that comes up for rent, I just don't know and frankly don't care. But I do know that landowners talk to each other and some will seek us out and offer the land to us based on recommendations from current landlords. So I guess my point is to be fair, treat the land as if it were yours, and most land owners will stick with you for the long haul.