The Importance of Farm Management and Maintenance
Overseeing a successful farm requires more than planting the right seeds for your crops—though that’s definitely important, too. Farmland property can be very valuable for the manager and any clients they allow to operate there. Both parties must maintain the property to ensure the best results. Taking care of a farm ensures you can keep it in the right condition for long-term use, such as passing it down to the next generation of property owners or selling the land.
Whether you’re a property manager or a farmer, our guide below will help you learn how to keep the property in great condition. Read this guide to learn the importance of farm management and maintenance. Once you understand the importance of these factors, you’ll have the information you need to oversee a more profitable piece of land.
Communicating Goals & Profits
Any property manager should work with farmers who are communicative. This is no small detail to overlook because both parties can use the land for profit. Stay in constant communication with farmers to ensure you’re on the same page on how the farm will operate. Most importantly, you should establish the roles everyone will play in keeping the land in great condition. Of course, one key way that farmland can prove profitable is by producing crops. Selling food from a farm can lead to a thriving business, but farmland conditions, such as the soil, must be sufficient for the job.
Keeping the Land Profitable & Productive
The farmers and land managers should work together to oversee the logistics of the property and overall operation. This includes fertilizing the soil, installing an irrigation system, and exploring the best insurance solutions. The farmers will handle the day-to-day hands-on tasks around the farm. That said, land managers should still take a hands-on approach when working with farmers.
Staying in consistent communication about how the crops are doing and other key details about the operation ensures you can step in when necessary. If the farmer wasn’t ready to explore insurance options before but is ready now, a landowner can make suggestions to ensure the property is heading in the right direction.
Working with reliable, hard-working farmers who will treat the land with care ensures the property remains beautiful and profitable for many years. A farm manager can maintain their land with the goal of passing it down to their children in the future. Then, their kids can manage the property or sell it, but the key to giving them that opportunity is ensuring the farmland remains healthy and well-maintained up until that point.
Properly Handling the Lease
The importance of farm management also extends to any leases for the property. A manager can establish lease agreements to benefit from the farm in various ways. Let’s discuss how each farmland lease option works so you can establish the right one for your operation.
Cash Rent Lease & Crop Share Lease
One of the most common lease options is the cash rent lease. This involves a tenant paying cash rent per acre to begin farming on the land. This style of lease is annual, so the tenant pays for the full year before working on the land.
An alternative to this agreement is the crop share lease. In a crop share lease, the tenant pays with their crops. More specifically, this lease involves the property manager accepting a percentage of the crop. In a crop share lease, the tenant may also pay with a percentage of the profits of the crop.
Flex Lease & Custom Farming Lease
Your third option is a flex lease. Choosing a flex lease agreement means that the rent paid by the tenant is adjustable according to the performance of their crops. For example, the manager and farmer may establish a base rent, but, in a flex lease, that rent can go up if a crop yields major profits.
Having lease agreements like this showcases how integral the relationship between the manager and tenant is for any farm. Another lease option available for farmland property is the custom farming lease. In this agreement, the landowner hires someone to manage crops on their land. While the operator works on the property with machines and other essentials, the landowner pays for production costs, such as the chemicals, seeds, fertilizers, and more.
Selling Your Property
Beyond the leases, another option to consider for your farmland property is putting it up for sale. This doesn’t have to be your goal at the moment. After all, as mentioned above, you can pass properties down eventually and maintain them for future generations. But if you do want to put the property up for sale, you have multiple paths to choose from. You can work with a real estate broker to put the property up for sale and talk to buyers.
Another option is a farmland auction. You can put a farm up for auction online or go the traditional route of an in-person event. Bidding styles can vary, so consider which one presents the best value to you. An absolute auction is an auction in which hopeful buyers place their bids until the time is up. After that, the highest bidder wins the property. If the auction has reserves, then the property owner has the right to turn down the highest bidder. Property owners can also choose a minimum bid auction. This is an event in which the property owner sets a minimum bid, and the land won’t sell until that bid is met.
Managing farmland is a valuable opportunity, but it requires a lot of hard work. A farm isn’t an investment in which you can sit back and let the farmer do all the work. Farmers must also know that they can’t put everything on a property manager’s shoulders—working with each other ensures all duties are properly completed to keep the farmland thriving. At Midwest Land Management, our farm management services ensure many essential tasks around the property are completed, such as recordkeeping, farm planning, and more.
Now, you have a stronger understanding of the importance of farm management and maintenance. Start caring for your property using the guide above to ensure your property remains a profitable asset for a long time.