ILSOYADVISOR POST

WEBINAR: Conservation and Farmland Leasing: Issues for Non-Operating Landowners

Many landowners and farmers want to engage in more conservation practices but are concerned about the impacts these conservation practices may have on relationships between landowners and farmers. For example, incorporation of cover crops can have costs to the farmer, but long-run benefits to both the farmer and landowner. We will cover issues related to owner-farmer relationships for conservation, nutrient management and cover crops. Conservation addendums to farmland leases available on farmdoc will be shown. 

Presenter: Gary Schnitkey, Professor, Department of Agricultural and Consumer Economics at the University of Illinois at Urbana-Champaign

Gary Schnitkey, Ph.D., is a professor and farm management specialist in the Department of Agricultural and Consumer Economics at the University of Illinois at Urbana-Champaign (UIUC) and regularly contributes content to farmdoc Daily. Schnitkey focuses on farm management and risk management by examining issues impacting the profitability of grain farms including corn-soybean rotations, machinery economics and factors separating profitable from unprofitable farms. Schnitkey grew up on a grain and hog farm in northwest Ohio and received his Bachelor of Science degree from The Ohio State University and a master’s degree and Ph.D. from UIUC.

Farmland Leasing in Illinois
  • In Illinois, 50% of farmland is rented (ERS, 2016)
    • Largest rented percentage in the U.S.
    • Larger farm sizes have more rented land
Leasing Basics
Lease Types
1. Share rent – share in revenue and direct costs
a. Illinois has a high percentage of this lease type, but are moving away from this
2. Cash rent – farmer pays for right to farmland
a. Seeing a move towards this type of lease
b. Illinois cash rents stable since 2017, around $224/acre
3. Variable cash rent – cash rent varies with crop revenue
4. Custom farming – landowner pays for field operations, bears all cost
 
Conservation Addendums
  • Issue with a Cover Crop
    • Environmental benefits
    • Build-up of organic matter over time
    • Payoffs are long-term and leasing contracts are short-term
  • Leasing addendum on farmdoc that can be combined with other leasing agreements for download 
Three Addendum Types
  • Nutrient Management Addendum – addresses issues with how farmer applies fertilizer, efforts to reduce fall application
  • Soil Health Addendum – farm practices such as tillage and cover cropping
    • No-till and cover crops can add carbon
    • Not consistent to have very high cash rent and cover crops at the same time if the landowner wants cover crops
  • Conservation Habitat Addendum – if the leased farm includes wildlife or other habitat areas
    • Adjustments to rent

Illinois Soybean Association
The Illinois Soybean Association (ISA) is a statewide organization that strives to enable Illinois soybean producers to be the most knowledgeable and profitable soybean producers around the world. ISA represents more than 43,000 soybean farmers in Illinois through two primary roles; the state soybean checkoff and legislative and regulatory advocacy efforts.


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