West of Mpls MN about 50 miles on Hwy 12 | Nice job negotiating some type of flex agreement rather than just giving asking price. If you can now honestly show positive cash flow, even it's only $5.00/acre on those 200 hundred acres, you made a good move.
Pay attention to the market, don't be afraid to forward contract enough of the projected production to cover the rent and variable input costs on those 200 acres. The opportunity to lock in a profit may come and go sooner than we all think.
I assume you're still at or slightly above your breakeven so don't limit profit negotiations to land only. The landlord lowered his price, the seed, fert, and chemical people can take a cut also. The previous tenant couldn't cash flow because they were all too high priced so they just lost a sale. Make sure you remind them of that fact.
When they say, "land rent isn't dropping why should I drop my price". You can honestly say yes, rent has dropped, now it's your turn. |
Southern IL rent
