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Midyear a good time for discussion with landowner

Land Values: Think capital expenditures, fixing that wet hole, conservation goals and more.

Communication between farmers and landowners throughout the growing season is great for talking about the weather, crops, your favorite MLB team or your vacation plans. But during these lighthearted conversations, you may be overlooking critical discussions that both parties could benefit from. Consider discussing some of these topics midyear in a professional business fashion.

Why now? Midyear timing can be beneficial, as there is less stress (though it’s not stress-less) than during planting, harvesting and even at lease signing. Topics can range from small to not so small, such as capital expenditures on a landowner’s farm. Many farmers may be concerned about initiating talks about big capital expenditures. If the farmer can present a plan that clearly outlines economic or conservation benefits to the farm, it may give both owner and farmer the opportunity to coordinate resources and complete the project.

Consider that one wet spot you plant around every year. It’s easy to talk about how you had to plant around it again, but summer is a great time to partner up and find a solution. Determine benefits to the owner and farmer, who’s funding it, who’s doing the work and when it will be done. Operators can set themselves apart by carefully planning out their communication and presenting their ability to provide financial or physical capital, while possibly cementing a long-term relationship or lease agreement with the landowner. The midyear timing allows for space and thoughtful dialogue prior to “go” time.

Beyond capital expenditures, there are several other items to discuss. How about the results that just came back on spring soil tests? Or fertility plans for the fall, including limestone, and a check-in to see if landowner and farmer are on the same fertility page? Again, have that discussion now, to make a plan and firm up budget numbers now rather than from the combine cab.

Grain sales are another good midyear conversation topic. Landowners who are involved in grain sales might need to know where grain will be stored in the fall, where to sell and what marketing options look like. I have had many farmers tell me they market grain for some of the farms they operate, and each one tells me about the added stress that brings. This is a good time to find out about the landowner’s goals, and educate him or her on the local markets and storage or selling options available to minimize risk. Additionally, commodity programs are an important part of the income stream. These reviews are a great time to talk about programs, status and eligibility.

During this check-in, parties may also discuss lease terms, market prices, what’s causing issues and what changes might be needed for next year. While this isn’t always the best time to establish cash rents or change lease terms, it may be a good time to start the discussion and head off issues early.

Regardless of the topics that need to be covered, communication is the key to any successful relationship. Landowners and operators alike can appreciate and benefit from the professional setting of the midyear review.

Courson is senior vice president at Busey Bank, Decatur, Ill., and a member of the Illinois Society of Professional Farm Managers and Rural Appraisers. Email questions to The opinions of this writer are not necessarily those of Farm Progress/Informa.

TAGS: Crops
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