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SCIA | 30% of APH times spring price as base, 30% of any thing over APH as bonus in fall as bonus.
AHP of 180 times 30% equals 54 BPA, times spring price of 3.80 equals base rent of 205.2 dollars rent per acre.
Bonus: Actual yield of 205,total bonus bushels 35 BPA times 30% equals bonus payment bushels of 10.5 BPA, times fall price of 3.10. Bonus payment of
32.55 per acre.
Different out look bonus: crop reduced by wet spring and dry summer; Yield of 175, no bonus.
We have been using this concept now for about ten years. Works pretty good over all. Was years where the total rent paid was way over what we would have felt comfortable on fixed rent, and some under. But the easiest time to switch is when prices are good as that is the time of higher rent figures coming from this type of lease.
We do like them as, now, rents are moving down as prices move down. But, to cover the rent, we do try to sell bushels during the price discovery period.
Works for us and with a minimal amount of tweeking, could be made to work any where. | |
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Flex Rent
