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Finding a new tenant is a process

Agrivision: Always use a written contract when leasing farmland.

December 7, 2022

8 Min Read
tractors next to grain silos
RENTAL AGREEMENTS: Landlords and tenants have a variety of lease types from which to choose depending on their goals. The most common and popular is the cash rent lease agreement.Farm Progress

My husband died last spring. Since he retired 10 years ago, we have rented our farm to a farmer who lives a couple miles from us. He told me the other day he is not planning to rent my 180 tillable acres in 2023. He is 45 and is taking a full-time job off the farm and will be farming only the 250 acres he owns. How do I find a reliable farmer to rent my land? Who do I talk to? Or should I be contacting some of my neighbors? My husband knew all these people, but I worked off the farm and I don’t know our neighbors well. What are some of the questions I should be asking them? Please advise.

Tom Kestell: First of all, I’m sorry for the loss of your husband. It is surely a huge loss to lose your life partner, no matter what age you are. I think there are many reliable sources to find a new renter for your land. I would start with your county Extension ag agent as a reference to find good land operators in your area. Farm loan officers can also be an excellent reference source for successful farmers in your area. This might be a great opportunity to help out a young beginner on his road to success.

Always use a written contract so everyone knows what is expected of them. Questions to ask potential renters: What will the renter do with the land? Will they rotate crops? Will they maintain existing conservation practices? How will fertility be maintained and improved? Will weed control be maintained and improved?

Many times, it is not getting the highest-dollar rent, but the highest-quality renter that in the long term is the wisest rental agreement for both the landowner and the land renter. Again, consider helping out a young farmer on his journey to success. Develop a personal relationship with your new renter so you both feel invested in the relationship. Remember, your new renter will invest time and lots of money to be successful. Long-term leases lead to long-term thinking on both sides of the contract. Good luck on your new journey.

Sam Miller: Fortunately, your tenant provided you with time to find someone else to rent the land. Why don’t you ask him if he has any recommendations? You can also contact your local Extension ag agent to see if they have recommendations. Another choice would be to contact the agronomy manager at a local ag retailer to see if they have recommendations for reputable farmers interested in renting the property. Ask for references when you have identified potential renters, and follow up with them.

Once you have found a new tenant, be certain to get a lease in writing that outlines the terms such as payment, maintaining fertility levels and maintenance. Your attorney can assist in preparing a lease agreement. Good luck finding a new tenant.

Katie Wantoch: Leases play an important role for many. You are not alone in your lack of understanding the components of a lease and the landlord-tenant relationship. A lease is a legally enforceable contract that allows you, as the landlord, to convey the right to use that property to a person or business for a designated period in return for some type of payment. A lease only provides the right to use or possess the property, unlike the outright sale of property that transfers title or ownership or gives an equity interest in the property. Landlords and tenants have a variety of lease types from which to choose depending on their various goals.

The most common and popular is the cash rent lease agreement because the lease is simple, the rent is fixed, and the owner is relieved of making operating and marketing decisions. Likewise, the tenant (farmer) has maximum freedom to plan and develop their cropping and livestock enterprises. The risk and returns from changing prices, yields and costs are all accepted by the tenant.

It is important that a rental agreement be in writing and agreed upon by both landlord and tenant. There are many advantages of a written agreement, particularly that a lease encourages a detailed discussion of the agreement, which leads to a better understanding by both parties and ensures the continuation of a productive and sustainable landlord-tenant relationship. Keep these things in mind when you enter into a new landlord-tenant relationship.

Direct-marketing dairy beef

I am a sophomore in high school. I live on a 60-cow dairy farm in central Wisconsin with my parents and my two younger brothers. My dad used to sell our bull calves when they were a week old. This summer, I started buying Holstein bull calves from him for my FFA Supervised Ag Experience project. So far, I have nine calves ranging from 1 to 6 months old. I get paid $7 an hour for working about 15 hours a week on the farm for my dad. I use that money to pay my dad for the baby calves. I will pay him for the milk replacer and feed when my steers are grown and I sell them at Equity or I have them butchered and I sell the meat to family, friends and neighbors. I figure the calves will be full grown when they are about 18 months old.

Should I pre-sell quarters and halves of steers a couple of months before they are slaughtered, and if they don’t all sell, should I sell those steers at Equity? I would acquire more calves if I knew I had a market. Also, I don’t want my dad to invest any more money in my venture because it will be several months before I can start selling my steers and pay him back. Who should I talk to for advice?

Tom Kestell: I’m glad to see you are participating in your local FFA and the programs it offers! Many times, the best advice you can get is from your peers. Reach out to other members in your organization and other organizations around the country. Your FFA advisor should be able to facilitate the communication and offer advice to you in setting up your SAE project. Set up your project for success by studying successful similar projects by other students.

Use your imagination on how to market your product BEFORE it is ready for market. Make sure you have a reliable processor who can accommodate your needs and your customers’ needs. Set up a network of potential customers and ask what their individual needs are. Make sure you develop a market for the specialty meats such as liver, heart, etc. Do not overlook ethnic groups, such as the Hmong community that purchases and prepares their own beef and other animal products for their private celebrations and their daily lives.

As far as financing your venture, look into Farm Service Agency beginning farmer loans. This is a great time to set yourself up for the future, which is close at hand. Organize your project as a business-like venture. Set up a business plan: How? Why? And then set out to outperform your plan. Talk to your FFA advisor, your peers, your local banker and, of course, your parents and family members. Make this into a joyful and successful learning adventure for all those involved.

Sam Miller: Congratulations on starting a business as a part of your FFA SAE project. You are fortunate to have someone willing to wait for payment until you can start to generate revenue. For advice, start with your FFA advisor; he or she may have some recommendations. In addition, reach out to your county Extension ag agent and/or technical college farm trainer to see if they have recommendations for sales, budgets and market suggestions.

Be certain to also line up a meat processor well in advance to be certain you have access and determine how your steers will be processed so you can market to your customers. When you have processing and cut-out information, you can then begin pre-sales to assist in planning when and where you will market your steers. Getting the processing costs will also assist in budgeting and pricing for your business.

Katie Wantoch: I’m excited to learn about your new adventure and the support your family is providing you. To successfully market your beef directly to consumers, you need to be doing something that no one else is doing. The conventional method of selling beef through livestock markets reduces the risk of loss of sales, but it also reduces the potential for higher profits.

I suggest you work on a business plan to help you decide which option might work best. When you direct-market your beef, you will need to market the animals yourself, including finding the buyers, deciding slaughter timing and location, planning with buyers, and finally, collecting payment. These multiple steps might discourage some from direct marketing. Though advantages might be worth the effort — set your own profitable price, may be able to finish lighter weights, reduced marketing costs and a better cash flow year-round.

Reach out to your local Extension ag educator, tech college instructor or your FFA advisor for resources to assist with developing your business, such as the Direct Marketing Meat guide developed by University of Wisconsin Extension and the Wisconsin Department of Agriculture, Trade and Consumer Protection. The key to any new business is to find a niche. Good luck on finding yours!

Agrivision panel: Tom Kestell, dairy farmer, Sheboygan County, Wis; Sam Miller, managing director, group head of agricultural banking, BMO Harris Bank; and Katie Wantoch, statewide University of Wisconsin Extension farm management outreach specialist/professor of practice. If you have questions you would like the panel to answer, send them to: Wisconsin Agriculturist, P.O. Box 236, Brandon, WI 53919; or email [email protected]

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