November 4, 2016
Is my rental rate fair to me and my tenant? Are areas of the farm under-producing? What have the yields been on my farm for the past 10 years? Is my tenant maintaining or building the fertility levels on my property? These are just a few of the many questions that absentee and non-operating landowners ask themselves each year.
MUTUAL BENEFIT: The purpose of record keeping and sharing information is to help strengthen trust and relationships the landowner and farm operator have already begun to develop over the years. Records help the landowner gain a better understanding of his/her property.
In situations where landowners don’t have access to farm data in order to review and analyze the farm on an annual basis, it is extremely difficult to make informed decisions regarding their land, says Mark Gannon, of Gannon Real Estate and Consulting, based in Des Moines, Iowa. These decisions could include selling, adjusting the rental rate or making improvements to the property, to name a few. The practice of obtaining, analyzing and maintaining records is truly invaluable in today’s age of farming.
If you don’t have access to the information, it’s time to get it
The farm leasing division of Gannon’s company is called Farmland Stewardship Solutions or FSS. Based on what he’s learned from years of working with landowners, tenants and farm leases, he cites the need for landowners who don’t have access to the needed information to start obtaining records tied to their land in order to make better decisions.
It is no secret that row crop production has grown into big business over the last several years. The era of “Big Data” is not only here to stay but sources of farm data grow each year. “More and more farm operators are implementing precision agriculture into their operation,” notes Gannon. “This technology gives them access to information and data to help them make well-informed decisions.”
Why landowners should have access to their farm’s information
The owners of the land should have access to this information in order to make better decisions concerning their land. The sharing of information helps to facilitate trust and long-term relationships between owner and operator. Gannon provides the following observations.
There is an endless amount of data available today, but being able to decipher what is important for the landowner can be difficult. Knowing the fertility levels of fields and understanding the soil test results is a crucial first step. In order for the farm to produce well, the soil needs to be fertilized well and remain in the optimum category to produce high levels. Yield is everything in determining the value of your farm.
The true value of a piece of land is in its production history
A lot of people reference a farm’s Corn Suitability Rating or CSR when referring to the value of a property. The CSR can be used as a good benchmark, but the true value of a property lies within its production history. Having records of the yield history allows a potential renter or buyer to make a better offer because they have evidence of what the farm is able to produce and what their return would be.
The biggest question Gannon and his staff hear from tenants looking to rent ground is: “What is the production history of the farm?” or “What are the soil test results?” If the owner can’t answer these questions, operators are less likely to offer as high of cash rent to farm the ground.
Farmland owners control one of the world’s most valuable assets
When shopping for a car are you more likely to buy a vehicle that has a complete history report or one that would be bought sight unseen? Obviously, you would purchase and feel more comfortable with the car that has available records and information. Farm ground is the exact same situation; operators and buyers will be willing to make higher offers when more information is made available to them.
Not only does record keeping help boost your potential income, but there is also a satisfaction that comes from knowing your property is being cared for and maintained the right way. Farmland owners control one of the most valuable assets not only in the United States but in the world and it is their responsibility to treat it that way.
An online record keeping data base is helpful in several ways
“Farmland Stewardship Solutions has an online record keeping database that is made available to all of our clients,” says Gannon. “Landowners and farm operators are able to easily and efficiently access and review any important documents tied to the farm through this database.”
FSS produces an annual report which provides a comprehensive analysis of the property from an economic, agronomic and stewardship standpoint. This allows for clients to better understand the data and ultimately lead to better decision making.
“There are lots of great operators who will be more than happy to share the farm information with you,” says Gannon. “At the end of the day the purpose of record keeping is to help strengthen the trust and relationship that the landowner and operator have already begun to develop over the years, as well as to provide the owner with a better understanding of his/her property.”
For more information visit www.farmlandstewards.com.
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