Farm Progress

Land Values: Businesses with long-term success show energy, ethics and intelligence — and farming is no different. Here’s how real farmers expand real operations.

July 9, 2018

3 Min Read
young crop in field

By Ross Albert

One of the most interesting things about farm management is getting to know the tenants we work with and learning their approach to the business. I have had many conversations on the tailgate or at the kitchen table, learning about an operation’s history, philosophy and goals. Just like landowners, every farmer has a unique style. Through these conversations, I’ve also learned how the operation developed and grew.

And for those still looking to grow? Here’s what I’ve learned from some of my conversations:

1. Buy, sell, lease back. There are a limited number of acres available for new tenancy each year. Often, land for sale is lease-free. This can be an opportunity for a farmer with access to funds to purchase the farm and the network to find a subsequent buyer that will offer a lease back. Every year, I see sales where a nice piece of ground sells below the market; that’s where farmers can capitalize. If the purchase price is affordable, the farmer can gain control of the acreage, and then look for an investor to sell to and farm for. There is apparent risk with this approach; however, several operations have built a nice land base doing this.

2. Be more than a commercial corn and soybean farmer. Being “too good” for a job is a good way to close doors. Relationships usually start slow and small. Custom work, excavating, hay baling, livestock production and other non-row crop activities are a great way to display your skills. Look at the small custom job as an interview with that landowner — or even the person driving by who sees you working. You can’t do every little job that comes your way, but be open-minded to doing more than just growing corn and soybeans.

3. Pay aggressive rents. Like it or not, this is a successful strategy for some operations, and they attract more acres. The return on investment-focused landowner gravitates to these tenants. This plan must be sustainable, and that takes a great manager. In my experience, the operations that can manage the expense side of the income operation will find long-term success with this strategy. Don’t get me wrong; yield and income are important. But the environment we are in today will reward the growers who cut costs and refrain from spending that doesn’t produce a return.

4. Work hard and be honest. This may sound cliché, but it is very true, and I can tell you the opposite won’t help you grow. I believe many landowners and managers tend to gravitate to folks they respect and trust. Landowners want to rent their farms to you — not your employees. Don’t stand on the shoulders of higher men. Community involvement and neighborly relationships can make an impact as well. In general, businesses with long-term success have energy, ethics and intelligence. Farming is no different.

Albert is a farm manager with Soy Capital Ag Services, Bloomington, Ill. He is a member of the Illinois Society of Professional Farm Managers and Rural Appraisers, whose members regularly contribute to this column. Email farm management questions to Carroll Merry at [email protected].

Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like