Ag Land Management Quarterly February 2019

Department of Agricultural Economics Author

05/21/2019 Added

18 Plays

Description

The webinar covers 2019 Nebraska cash rental rates and land values, communication issues between landlords and tenants and addressing flood related damages on rented properties

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[00:00:10.920]Okay. Good evening.
[00:00:14.429]Good to meet you.
[00:00:16.500]I'm Allan Vyhnalek. This is Jim Jensen, and we're glad to be with you with this time management quarterly again tonight and we're actually going to start on time after
[00:00:25.560]A lot of technical difficulties, but I think we got we got to go good shape. So we'll just go ahead and start to our slot heights and there's our website. If you need to get ahold of us. That's how you probably got rich shoots. That's good thing.
[00:00:39.630]There's here's our here's our
[00:00:43.680]Contact information do you receive Nebraska. I'm on campus 4024721771 and that's my
[00:00:52.260]Email and phone number on the right and then Jim is up in the Northeast station concord Haskell AG lab and he's got a different
[00:01:00.960]Course, a different email address and that phone number for him will ring right to his own so you get him all the time. Anything else to add there. Yeah, so I
[00:01:10.050]Work primarily on land economics and finance here at the University of Nebraska Alan and I work extensively on
[00:01:17.610]Providing our reach across Nebraska. This is a second of our for Planned nightly webinars and land management across Nebraska.
[00:01:26.550]We're glad to have everyone online tonight. Joining us this contact information will be provided as a very last slide as well. So if you get to go find something to write things down with
[00:01:37.950]By all means. Be sure to take note on that and also the website Allen noted on the first slide also appearing on the second slide here. A econ UL that edu backslash land management that is our website where we will be hosting
[00:01:56.910]This webinar. In addition to the other webinars that we had posted related to our first one
[00:02:03.450]Any questions tonight. I also have a computer open to my right, so I'll be keeping an eye on that for Alan and I as we go on will be switching on and off.
[00:02:11.670]I'll take the lead here on the first part and then Alan will be taking the second part and then we'll kind of joined together for the third part
[00:02:20.820]So getting started here outline of what we intend to cover tonight we recently published the preliminary estimates on land values as well as cash rental rates from across Nebraska.
[00:02:33.120]This information will be highlighted in our first series of slides and tonight we'll be talking about some very common landlord tenant communication issues.
[00:02:42.750]What does good communication look like and Elise and related to that, how do we address any concerns that might appear
[00:02:51.510]Third part third part which we had initially not planned, but
[00:02:55.770]Which is clearly an issue, depending on your area of the state relates to mitigating flood related damages or more directly dealing with natural disasters as they occur.
[00:03:06.540]How do we account for them and leases and how do we determine the extent of the damages. So, mainly if we have identified, we have a property that clearly has flood damages, how do we account for that. So how do we document. How are we going to
[00:03:20.100]address those issues as well as how do we account for it in movies. And finally, we had a couple of questions submitted to us and we'll stay on as long as it takes anyone has questions as we're going along.
[00:03:33.810]Just type them into the chat pane and we can go back and review them or if I see a pop up as I'm going along here, be more than happy to help address that.
[00:03:41.850]And the questions are mainly related to disaster tonight, but if there are any other questions, be sure to stop us as we're going along.
[00:03:50.310]Okay.
[00:03:51.600]So the first part here 2019 cash rental rates.
[00:03:57.180]A little background that we talked about this in our last webinar, we'll just make sure everyone's on the same page.
[00:04:03.030]semi annual survey that we've done of Nebraska land industry professionals that survey was started back in 1978 by doctors Ron he handsome Bruce Johnson, who are both retired from the University of Nebraska now.
[00:04:16.200]The surveys can pose the folks that work every day in the land industry. This includes appraisers professional farm and ranch managers as well as agricultural bankers from across the state.
[00:04:26.910]Each year we do two different things. The first part, we do the preliminary estimates, which are published second Wednesday in May.
[00:04:35.370]The preliminary estimates have details and things like preliminary estimates on land values or importantly for a lot of folks cash rental rates from across Raskin
[00:04:46.440]The final report, which we're working on analyzing right now. Final Report has additional detail and things like who's buying
[00:04:54.120]Who's selling land. How's the land being financed all of this information can be found at the website noted below Peggy con un l.edu backslash real estate.
[00:05:06.690]Or you can simply do a Google search for the words from brass farm real estate survey or breast farm real estate or cash friends were usually one of the top sites that
[00:05:18.480]Briefly, we take the 93 counties in the state of Nebraska sub divide them into eight different regions, tonight we're broadcasting out of Lancaster County, which is located in the East district.
[00:05:31.860]The reason we divide the status to a different regions is because this is how we summarize information that is sent in to us, you'll see in the next series of slides related to where your properties located. You can see the land values for the cash Reynolds
[00:05:49.440]The prior slide that I also had appearing there in any publication, we put out related to land values or cash rents that map traditionally published there.
[00:05:58.740]briefly on the topic of land values across Nebraska. We estimated land values across the Nebraska. If you did an average across all the different types of land.
[00:06:08.790]Are down slightly anywhere from 234 5% maybe even a little bit more in the southwest. The main point being, we're not seeing a significant fall out in this year. In particular, we have seen things down slightly compared to prior years
[00:06:25.320]Things I believe the high was either in 2013 or 2014 where we're seeing a gradual decline that is in parallel with the current challenges, many producers or tenants are facing across the state related to commodity prices. The indirectly is being reflected into
[00:06:42.990]land values that we have reporting that estimated market value of land as of February 120 19 compared to February 128
[00:06:55.740]Really related to the cash rents will be highlighting dry land cropland center pivot irrigated cropland as well as grazing land on a per pair basis for each crazy month
[00:07:08.250]We have additional detail on our publications on gravity irrigation, as well as grazing land on a pretty good basis, we will not be highlighting this tonight.
[00:07:18.870]First thing we see here on dry land cropland rental rates. We're seeing and gradual decline across the state.
[00:07:24.720]Gradual declines or and like I said before, in parallel with the trends that we've been seeing related to
[00:07:32.310]Commodity prices, primarily the crops, and to a lesser extent livestock prices being lower than what they had been in the past.
[00:07:40.170]In addition to the average. We also have what we refer to as hell. How stands for the average of the high third grade.
[00:07:47.970]Average of the lower third grade and an average of all the responses as we look processed in Nebraska, we see these averages provide us a range on the estimates in addition to the average that was presented on the prior slides.
[00:08:02.220]Traditionally speaking, the higher cash rental rates tend to appear in the eastern third in Nebraska, while the Western two thirds catch rental rates are traditionally lower and maybe a little bit wider, in terms of the cash rental rate ranges that are reported
[00:08:19.680]The center pivot irradiated cropland rental rates are the highest ranking land class that was noted stain or Brasco
[00:08:26.880]Generally speaking we seen a slight and climb the highest rate of decline. We've seen in the north district.
[00:08:32.039]Easter's prequels up slightly too much, but the northeast and these tend to be where the higher cash rental rates are at in the State of Nebraska.
[00:08:43.049]In addition to the averages, as we did on the prior slide we report a range, the range on sensitivity or gated cropland varies anywhere from a high higher third from anywhere between 325 to 330 all the way to a low of about 10 in Northwest Nebraska.
[00:09:05.460]People ask related to the center pivot irrigated rental rates. Why do we see a difference in the ranges quality of the land is always a constant factor, regardless of the type of the land. In addition to it, how competitive in the market.
[00:09:20.610]Who's maintaining the irrigation equipment. How good of a system do you have these cash rental rates at the University of Nebraska reports assumes that the landlord owns the entire irrigation system.
[00:09:35.670]So if a tenant would provide something an example like power unit or pivot, we would discount the cash rental rate to reflect the contribution that Bill Clinton.
[00:09:46.380]Is providing and we have done some work on estimating what those discount rates are you're interested, send Eleanor I email, we can maybe even posted on the website for this webinar to
[00:10:01.950]The last slide, I'm going to last two slides I'm going to highlight on cash rental rates are cow calf pair monthly rental rates. So this is for one cow calf pair.
[00:10:13.020]Or one month traditionally grazing seasons in Nebraska, about five months. So an example would say for taking a look at the Central District, which is roughly $50 per pair per month we were times that I five series talking to
[00:10:30.180]Or 253 that would be the grazing rental rate for the entire season.
[00:10:37.380]The rental rates vary across Nebraska and then the range that we have provided to us here the ranges. Give us some indications, as I mentioned before, all the land is definitely an influence on a cash rent in addition to the quality of the land. We also have things related to
[00:10:55.860]who's providing upkeep on the fencing taking care of brush weeds fizzles noxious weeds. All of these things have an influence on the cash rental rates that are reported across the state of Nebraska.
[00:11:10.860]So we see a pretty healthy range across the state, some of the higher averages. We have reported, you might be in a situation where the land owner. It's actually willing to provide a certain degree of care and example, providing water, things of that nature.
[00:11:26.280]So I haven't seen any questions yet here before we move on. But if you do have any questions, I'll monitor the chat.
[00:11:34.230]As Alan's going to get started here in a slider to
[00:11:38.430]We'll focus a little bit I communication and then we're going to step into mitigating disaster. So I think we're doing pretty good on time. And like I said, We'll shoot provide an hour. And if we have a few extra questions we can stay on a little bit longer.
[00:11:51.450]So moving on, we're going to switch over to Alan now.
[00:11:55.920]So in most cases the landlord and 10 get along great.
[00:12:00.360]And then there's always just a few where there's been a there's been a problem between the landlord tenant getting along, or are agreeing on what Elise provision should be or that sort of thing.
[00:12:09.930]And I can tell you with my experience and extension that in. But the vast majority of those cases where someone doesn't get along. It's mostly because of a lack of
[00:12:21.060]It's always almost always a lack of communication and cause that problem. And so communication cannot be understated. It cannot be undersold, it has to be understood that.
[00:12:32.400]Especially in today's age where the prices have gone so high, everything is so so expensive that sort of thing we have to have great communication between landlord and tenant. So that's why we try and highlight it every year when we do these meetings.
[00:12:48.840]The younger generation actually might need Jenner better communications. The nutritional values of the older generations.
[00:12:55.920]Especially for working with two. Okay, so a lot of landlords right now are my age and older. But when you start to get to the younger generations. There's intergenerational communication. Difference Meaning
[00:13:07.260]They didn't necessarily grew up on the farm. They didn't necessarily grew up with the sweat equity into that business and not operation. So therefore,
[00:13:15.510]It's going to affect how they look at that lease and you're going to affect how you look at that property.
[00:13:20.700]In second bullet there under the first topic. There's a difference in values may reflect the terms least what we said, well, we see often Gemini. See this often is that the younger generation may treat it more like a business a profit entity, if you will, and therefore will
[00:13:38.820]Doesn't mean the rents go down very much. Where is it the tenant can be relatively frustrated. In that case, because the rents won't necessarily go down. So just something to think about.
[00:13:49.020]And then tailor the message appropriately to the party. The other words, make sure that
[00:13:54.090]If you're a land attendant speaking to a landlord that you don't use a bunch of technical terms of fair didn't grow up on the farm and don't know under don't know the technical aggregator agronomic terms deserting
[00:14:04.440]use language to bolt people's will understand, but please don't be intimidated or condescending, we have to treat each other with respect and choked show a true commitment.
[00:14:13.560]By both parties, both the landlord and the tenant to the commandments of the land, meaning that the first discussion about have about lease.
[00:14:20.940]Lease and release arrangement is not about what we're anybody's going to pay cash rent the first discussion ought to be
[00:14:26.940]What are we going to do for the good of land going forward. The other words what's important for this piece of ground as it was, we move it forward to for the next generation to use the next generation operate from we have to consider.
[00:14:39.960]The long term effect on ground the long term effect on profitability, because that affects long term profitability and we should always
[00:14:47.460]manage our ground based on what's going to be best for the next generation. So
[00:14:51.780]Some just some some basic things to think about. The most important thing thing course in in communication on leases is used to listen to listen, listen. Don't talk. Listen, listen to what the other party saying, see what's going on.
[00:15:03.780]Trying to figure it out, ask clarifying questions and it's everything will go much, much better landlords can expect that they need to share
[00:15:13.350]Information landlords need to gather some of their information to the growing season to it isn't, it isn't just doesn't rely on the tenant.
[00:15:21.210]So when when possible permitted by the lease, you have the landlord shouldn't be going out there and checking out what's happening on their farm during the grows the growing season.
[00:15:29.550]even consider out get out get out walk, see what's going on, what's going on this year.
[00:15:34.800]But you always should let the tenant know that you're going to go do that there should be no surprise for the other party the tension know when the landlord is going to be heading out
[00:15:42.720]It's important guy know a situation where a brother will call his farmer brother and say, Hey, I'm going to go out and check to check my place out
[00:15:51.330]And the farm brother always just says fine. Just go because they want them to have that information. They wanted to be able to drive around out there. They want to see what's happening, that sort of thing, especially as
[00:16:03.090]Especially as we go through this next week where it's supposed to be so doggone wet.
[00:16:07.110]Please don't get stuck out there. But on the other hand, let's go see where the wet spots are and let's go see what's happening with the
[00:16:13.920]You know, terrorists. Is that sort of thing and see what has to be fixed. After we have some significant rain this week.
[00:16:19.830]For the tenants. They need to communicate with the landlord at critical times. In other words,
[00:16:24.300]Are. Have you done. Are you done planting it. I think there's a fair number of people that are done, maybe with a corn, but not have any don't have any thought about starting soybeans are just barely starting savings.
[00:16:34.380]given it the day. And that's, that's too bad because we're getting a little bit behind on our planning to spring.
[00:16:40.230]We have to talk about what the extreme weather related events look like. In other words, if you have a hail storm come through.
[00:16:46.140]You know the type of updated. I would want. If I was a landlord to type of update I would want is if there was a halo came to my place I'd want my tenant to go stamp a cell phone picture of the hail damage and shoot that to me text that to me.
[00:16:57.960]So I can see what that looks like that something like that would be incredibly important and. But anyway, doesn't matter. It doesn't matter if you have a catastrophic catastrophic event or not. I think that sometimes
[00:17:10.200]Those, those pictures allowed to be shared about once a month. Anyway, or to send a text to send you an e high by the Fourth of July, just send anything
[00:17:17.099]To let them know what's going on and what everything looks like and our things to go on, especially if you have a landlord.
[00:17:21.869]Is unable to make it out there because of health or or distance it further, further away.
[00:17:27.480]Please be sure as attended to, to engage land or make them feel like they're part of the process. I think it'll just helps the whole tenor of the tenor discussions you go forward and think about the next year.
[00:17:40.560]Now we want to go on is a special feature for tonight we're going to talk a little bit about the flood damage is on rented properties is the end
[00:17:48.510]Of it, maybe, you know, if we're working about what people from out the Panhandle we're going to talk about snow damage to things like fences from the big blizzard that occurred, but the same time the flood was occurring.
[00:17:58.920]And so I think I've got the first couple of slides that correct, and then we'll let him talk about this too.
[00:18:06.420]So if you have flood damage it seems to be a good idea for both the landlord attend to go together. James Daisy inspect that damage and see what's going on. And it can Alyssa, what needs to happen.
[00:18:16.440]It makes sure that you documented damage right away. If you haven't done so go out and do it anyway. Get that documentation done take photos to get your cell phone out and get good pictures even consider taking a video of the flood damage you did you have
[00:18:32.760]To do a pan around the field and see what's going on there. And if you have a death loss, for instance, consider getting
[00:18:39.600]A third party written statements from like a veterinarian, for instance, reporting to death loss or documenting it that thing occurred.
[00:18:46.590]Again, taking pictures of things and says they're happening.
[00:18:49.860]And be sure to record your damage right away to USDA FSA offices or insurance company says you're enrolled in a proper program to proceed with any any corrections. You have come into you.
[00:19:03.120]UL has a great good luck for a website called flood you know.edu that's we put together. Exactly. For the march 15 store.
[00:19:12.720]There is no perfect solution to your today to correct the damages that you may not have
[00:19:20.100]That you have but but notice you have to try and work together and that includes everyone don't leave somebody out on this. So in this list, for instance, and let them know what it what is or isn't going on.
[00:19:30.720]But especially the landlord and tenant have to be on the same page as this goes forward.
[00:19:36.540]What's next, so
[00:19:40.140]Simple Plan for the poise agencies, insurance companies that provide assistance for the recovery those if you think you have some litigation coming from one of these agencies, make sure that you have a plan for them and make sure that you have to, in some cases, you may have to fill out.
[00:19:54.810]Some forms or get approval before you do the work before we correct something so make sure you have that all that in place before the correction hers and make sure that you have everything kind of put in place.
[00:20:06.390]So that so that a when it's time to file for somebody you're able to do so if you have anything coming to you and in terms of executing a plan will be up to the landlord will be up to 10 it. Well, the point is
[00:20:20.160]Primarily, you know, we got a field here that's been damaged in the tenant can't use it and it's the landlord primarily responsible for making sure that you can use a field.
[00:20:29.700]Now will attendance pitch in and help. Absolutely. And we're going to talk about that a little bit more. Next, but
[00:20:35.040]But the execution of the plan may rely more into core to the landlord and the tenant. And I think Jim's going to make some more comments about that now. Are you next time I got one more slide.
[00:20:45.090]Okay. Oh yeah, no, this is my slide. So when you have flood damage is a good private entity look at a couple different things here.
[00:20:53.760]The hard work. Maybe include picking up debris preparing fence correcting minor soil issues like blow outs or or erosion, that sort of thing.
[00:21:03.360]And of course, cook the corn stock issue. Holy cow, a lot of corn stocks pal around in different places and that can all be handled.
[00:21:11.370]By the landlord or the tenant. I think a lot of tenants would would absolutely pitch in and help with that.
[00:21:16.740]I didn't you got the heavy work, which includes use of graders and excavators and bulldozers other heavy equipment to move. Remove Sam fill in holes reshape the damage land.
[00:21:26.850]And you may or may not even want to take that on, depending on the severity of the damage. How much sand, you have out there and those kinds of things.
[00:21:35.100]In some cases to the tenant may be willing to do have a significant amount of this work because some cases tenants even have some of the equipment to do the heavy work but
[00:21:45.300]The responsibility, in the end, and I got mentioned before, is it the most is work license is responsible for the landlord but agreements can be reached between landlord tenant.
[00:21:55.080]But attend to help out with this and get it done in a timely manner then because attendance probably have the equipment to do most of stuff or do some of this stuff and then and then
[00:22:03.750]You have to talk about how the landlord will be compensated to tenant if they do choose to do some of this work. So it's a it's it's there is no textbook to tell you how you're supposed to do this. All we're saying is
[00:22:18.300]I have that conversation figured out I don't have a magic crystal ball to tell you this is exactly what you should do or this is exactly what you don't do
[00:22:26.280]I will say that we have to be have this conversation and get communication down right then I think everything can kind of work out.
[00:22:36.390]Okay, now provisions are you doing this on. Are you okay, Jim's going to take over now tikka tikka Rusty's
[00:22:46.800]Okay, so I'm kind of got through the process of if we have the damages. How do we deal with them. So there are different agencies, some federal some state.
[00:22:57.870]Some might involve private insurance companies, whoever they are, I'm sure. By this point, many folks have already documented those expenses on your property.
[00:23:08.010]This year appears to be fairly wet the spring and especially in certain parts of state and
[00:23:13.230]Given where the water level is in many areas, it doesn't take very much train before we can get some pretty serious events again.
[00:23:20.100]So by all means, stay in tune with what's going on out there, Allen noted some very good things about various forms of technology with cutting a short video clip.
[00:23:30.300]Or taking photos, there's ways to distribute that if you're an older landowner, that doesn't use any of those things.
[00:23:37.080]RP working with an older landowner, that doesn't use those things. You can always get them printed off at a local
[00:23:42.960]Retail store these places fairly inexpensive and sharing photos and a lot older landowners like to do those things.
[00:23:50.490]So first of all, when it comes to accounting for the damages and the lease Alan talked about mitigating them. But how do we actually account for that type of risk.
[00:24:01.770]First of all, anything that's in the least related to weather related events delay planting extreme weather events NATO's flooding whatever might be. We need to follow those
[00:24:13.920]But if we have failed to account for those, that's one thing that we can learn about in 2019 and apply to our nice, but the other thing that's even better is
[00:24:25.590]What if we do we know if we know we have problems is here. How are we going to take care of that.
[00:24:31.260]So first of all, we have to identify what portion of the property. Maybe it's a quarter of the field. Maybe there's a stream that cuts property and half or a quarter.
[00:24:40.740]Well, we know there are certain numbers of acres associated by that maybe we can come up with an agreement on specifically five or 10 or 25 acres instead of 160 acres or whatever, we'll
[00:24:53.820]So let's first try to identify what is usable and unusable related to have been unusable. Does that mean we're going to have to plant soybeans instead of corn or whatever the crop might be
[00:25:06.180]How's this going to influence things like planting are spraying are harvesting is this going to delay, some of these things. If we can't put a good pre merchants down
[00:25:15.750]Probably going to influence. Some of our expenses, especially if we're in an area of the state where we have some of these weeds President are resistant to different kinds of herbicides.
[00:25:24.960]Or certain insects. My guess is, we're probably going to see certain insects emerging this year. That might be a bigger issue this year than if it had been more of a normal rainfall pattern or farmer. So related to these things. Do you have a situation where the acres
[00:25:44.730]Qualify for prevent plant and we're going to highlight a few sites here. They'll talk briefly about prevent plan with crop insurance.
[00:25:52.440]And when we talk about prevent plan or acres that are having pastor occur on them. Are we going to adjust the rental rate. If it's a cashless. Well, I like that a few slides here or I believe in the Q AMP a session, we might address that a little bit better.
[00:26:10.170]Here when we talk about the types of leases, we can have one of the most common our cash leases across the state of Nebraska and hundred with contractual law if there's an event A occurs at the entire properties unusable.
[00:26:28.590]That would be a case of be kind of like may be able to relate it someone better if you rent a house sign in one year contract or in a house.
[00:26:37.320]And the following day after you sign that contract the house burns down, and it's pretty clear that you're not going to be able to live in that house.
[00:26:44.070]It gives you the option to vacate the premise. Most farmers are probably not going to want to vacate the property arena.
[00:26:51.000]Hopefully, try to work with that landowner, not as a farmer myself, I would try to work with that lonely. I'm going to figure out is there something we can do.
[00:26:59.520]If we do have issues, can we come up with a mutually agreeable solution.
[00:27:04.680]Maybe that involves discounting the CAF rent this year, maybe even for multiple years depending on how much time that I might provide to a land owner as a tenant.
[00:27:15.330]Between using my equipment. My time my skills, whatever, how do we address that will have some ideas here in a few slides.
[00:27:23.370]When it comes to a crop share what is different with a crop share bland owners actually getting paid in the form of Warcraft.
[00:27:30.570]So if we have issues related to the land that hinder the yields limit yields, whatever the case might be. That would be a situation where the crop share with the payment to the landowner would be reflective of that.
[00:27:45.330]So this is a case where both the landlord and the tenant wouldn't receive an example prevent plant prevent plant funds, the landlord and the tenant would both received in proportion to the share those types of funds.
[00:28:01.290]And we highlight that on the last point on the slide pastures Spanish words are a little bit different deal. Typically, not always, but typically pasture or rented not for an entire calendar year, but maybe for a certain point in time. For example, a five month grazing.
[00:28:20.460]Many pastors across the state, at least in northeast, Nebraska, where I'm a little bit more knowledgeable I split time between Lincoln, as well as northeast corners data. I guess screen or Eastern Nebraska with my se counterpart.
[00:28:34.800]There are certain areas were pastures are behind this year compared to prior years we haven't gotten necessarily the right number of heat units that we would need otherwise. So if this is a case where we might
[00:28:46.260]Say maybe we should be taking a look at a four month creating seasons instead of five month crazy season.
[00:28:52.020]Under that case, you might only be charging for four months, or you might only consider offering for a four month instead of a five month period.
[00:28:59.760]Or maybe we need to cut back the number of cow calf pairs. We're going to put out to reduce the stocking. That would be another example.
[00:29:07.200]Under Halen or alfalfa for doing hey on or alfalfa very common to see it done on share if that's the case, there
[00:29:17.430]The share would reflect the reduction in what has ever been produced, meaning if you have a sub irrigated meadow that you can only get a portion of it. Well, I am Lord what they get in payment is going to be reduced, because they're only going to be able to maybe cut part of it.
[00:29:33.750]cash rent if it's pretty clear that this is a site that the yield isn't quite there. You might take a look at stepping the cash rental rate down because there's not being as much produces here that's being equitable we're trying to charge an appropriate rate to account for
[00:29:51.270]The true value. What's been growing or what's being produced.
[00:29:56.160]So,
[00:29:58.470]We've gotten through basically all our slides here on documenting our lecture that we had prepared for tonight we're roughly half hour into our presentation now.
[00:30:09.630]So we're gonna take a look and we'll spend a little bit more time here, and I've only had one question inputted so by all means, if you have additional questions.
[00:30:16.560]Keep them going in and I'll be reviewing these as Elena will to try and take a little bit more time on some of these questions because they are good questions that were submitted. So
[00:30:26.490]We'll start up here with our ask or an expert section and Ellen and I will be splitting this ugly bound will be taking the first two questions.
[00:30:35.370]Right again get into that chat and send us a question. That'd be very helpful. We appreciate, be able to answer those. So here's, here's one that came should land are compensated.
[00:30:49.620]For his or her time using personal equipment to fix flood release really damages in in every kind of alluded to this. Yes.
[00:30:58.290]The landlord should provide some for to comp sort of compensation for that term for helping them remediate flood damage to the property.
[00:31:06.510]And you need to talk about that probably ahead of time, maybe a set rate per hour per acre or a discount off the rent that source that sort of thing. Now be
[00:31:16.380]Be careful about a per hour per hour per acre deal, you probably want to do that on a per hour basis because I know of a situation recently where somebody
[00:31:27.570]Thought that moving sand off of a field was going to take a half a day and ended up taking two and a half days or three days and so
[00:31:34.650]The, the per acre thing would have been a bad such a bad deal for that person coming in with a with a bulldozer to move that sand.
[00:31:42.300]So data per hour rate which fit that much better. And then, and then you have to think about what our discount off of the rent might be. So the current rent for with a per acre discount would be a final rent. So if you have, let's say, a cost of
[00:32:00.960]Hundred 50 bucks an acre $200 an acre. Would you want to discount as a landlord would you want to just got the full $200 in one year. Probably not.
[00:32:09.090]So maybe you take that $200 and you divided into five years, and certainly like $40 a year discount off the rent to
[00:32:15.870]Over a period of time compensate that tenant for their work and that sort of thing, but you still want this all written down and documented in terms of hours and then the
[00:32:25.860]Value and all those kinds of things. So if there is, if you're in one of the 47 counties that has the emergency conservation program funding.
[00:32:33.600]For instance, you have that final cost to know what you're going to
[00:32:39.030]What you're going to ask for in terms of help on that, on that funding stream. And so it's not all the out of your pocket, necessarily, but you have to have a document, you have to have a written down.
[00:32:48.270]So make sure you're kind of on top of that, and if you have any questions please type them into chat. We'll try and get to
[00:32:53.820]Another question, I'll be working on here should be agreement to mean land or intent on restoring land be document.
[00:33:01.920]Yeah, sure. If you're modifying your rental agreement to get these changes in writing and documented. Absolutely.
[00:33:09.060]That's a stress for both parties design is kind of situation because you had land damage.
[00:33:13.290]Some it's unusable. Some of its usable some is usable varying degrees and so make sure you're both partners are fully aware of what you're agreeing to if you're modifying least, it can be modified Meteor both parties agree to that.
[00:33:25.830]And make sure you check to attach these changes as the addendum to the release and just just note them both.
[00:33:32.610]Sign sign off on all the ideas, both of you sign off on that and you can you can amend Elise, even though it's been after March 1 and we started, that sort of thing.
[00:33:40.770]It absolutely can be changed if both parties agree.
[00:33:44.340]So the other thing you think the other discussion has to be kind of thrown in here. And I'd maybe Jim's going to handle. And I don't mean to steal his thunder, but
[00:33:51.870]The discussion is, you know, you better have an honest look at maybe even get some help and evaluate some of this land because, you know, you could do.
[00:34:00.300]Thousands and thousands of dollars worth of mediation still not have lands very productive and so maybe in some cases the land is even worth trying to reclaim, or are you let nature take its course and
[00:34:10.650]Let it kind of start back on itself and and you know you have to make that a good evaluation to at some point time very important here.
[00:34:18.870]Oh yeah. The other thing to consider is, yes, if you've got land. It's been damaged heavily if you've checked with to Farm Service Agency and see if you can maybe get that bit into some kind of CRP program is out might be an excellent
[00:34:31.380]Way to get over the hump here at the beginning and CRP without us to be an outstanding way to make that happen next gyms turned no
[00:34:41.159]Okay, we had I see two questions in the chat. And like I said, if you got questions for Alan or myself I seem to questions for me in there and
[00:34:50.850]I'll take a stab at those. But, by all means, if you have questions, be sure to
[00:34:55.620]What but those be knowing. The other thing is I can say is Alan and I travel with state quite a bit. If you'd ever like to meet one on one with one of us be more than happy to
[00:35:04.980]Have a little session, we can make time here in Lincoln or depending on where we're at. During the workweek. We can sometimes take a one on one, consultation and some of those things.
[00:35:15.810]The question that was posed to us. What percent of leases across Nebraska are either crop share cash leases or a thing called the flex lease, which is kind of a hybrid
[00:35:27.180]Between cash leases and flex leases, I have a slide chart here. I'm going to show to everyone here and it just didn't fit very good on this slide. So move it over here, but something I wanted to highlight in our special feature section from
[00:35:45.900]As part of
[00:35:48.660]Our survey work. What we did here was we took a look at what percent of the leases by region of the state. So if you notice, along the bottom
[00:35:56.970]Bottom access there the live xx SEC northwest north south west kind of the central region state and then roughly the eastern third state.
[00:36:08.070]On the right hand side we have crop shares are in blue cash leases are in red.
[00:36:14.790]And the thing that thing called play nicely says, which we can talk about this in an upcoming session, there's anything you really haven't seen in our first two sessions.
[00:36:23.610]Taken in the chat will be sure to point it out likes leases or hybrid, as I said, between cash leases and captures couple take home from this
[00:36:34.890]It tends to be a higher rate around 65% in the western part of the state. Our crop shares versus in the northeast part of states, basically the opposite end of the state.
[00:36:46.500]Not quite 70% of leases are cash leases, it tends to be where we have heavy root crop producing areas. We have a higher rate of cash leases.
[00:36:59.400]eastern part of the state versus a western part of the state my Western part would include areas where we have things like small grains.
[00:37:08.700]We tend to have a little bit higher rate of crop shares, so we can kind of see the breakdown here. And this is actually in the 2015 real estate report if any way you'd like to
[00:37:20.820]Take a look at finding that play with some good work that was done that year that was probably one of our better special feature sections that we had. So I got a couple questions here.
[00:37:35.340]I'll let I'll tell you what I'm going to take the first two questions. I'm reading off our screen here, where they're submitted. And the third question, I'll give out because it really covered says stuff.
[00:37:45.840]First question that was noted here.
[00:37:49.590]We talked about
[00:37:51.960]Let's see here.
[00:37:54.090]First question that was asked on the topic a land values.
[00:37:58.410]In common question that Alan or I get related to the market value of land. How can you be doing a research real estate survey that says the estimated market value of land is in the climbing, but our property tax assessments, maybe have gone up, or at least maintain a fairly high level.
[00:38:16.200]Spoke with a landowner in coming county today and they noted property taxes almost think it was in the high 70s that quite 80 bucks in April. So I'd be a prime example.
[00:38:27.180]Well, in this situation, we got to take a couple things into account, one in our presentation. Early on, and I could flip back to the slide. But the main point is
[00:38:36.780]The market value of land is different than what we use for taxation taxation is based off of three year median a gland value and that's called assessing the assessed value is looking back over a period of time. So remember last time that assessments came out would have been
[00:38:58.980]You know about a half a year ago around December or something. And those assessments, we're looking at over the last three years.
[00:39:07.980]The snapshot. We had thrown up on our screen here. That was just looking at the last year.
[00:39:13.470]So over the last three years, we've seen well over the last five years, we've seen assessments, according to our current property tax laws work you seen a lot of assessments across the state increase. There's a little bit of a disconnect between how assessments work versus how
[00:39:31.170]The market value of analysis county remembered assessed value on agricultural land is based off at three year median hagglund value.
[00:39:42.840]That's a different than our market value or looking at the estimated value of that property for one day at a point in time up in the future.
[00:39:51.120]So that's kind of why there's different sir this is obviously a very critical issue our state legislature. There's been various proposals floating around.
[00:39:59.760]We hope to see something that the session here we're winding down the session here towards the end of May. I think they're
[00:40:06.360]The unicameral session, we're in a 90 day session. I'm pretty sure we there towards the end of May, or early June will be our last day of the session
[00:40:15.000]But the best thing I can tell you is, regardless of where you live in the state stay engaged in the process and let your local representative know security issues or concerns are.
[00:40:26.490]Another deal here question we had I'll take this question, then we'll switch back over Adele
[00:40:32.910]Question was on the topic of our real estate and survey the work that's done behind it.
[00:40:38.130]Is it more of a historical survey or does it take it forward approach.
[00:40:42.240]Traditionally speaking, we take kind of a historical perspective or maybe for the upcoming production year when we're talking about the 2019 cash rents. There are three questions on the survey the questions related to the we expect the number of land sales to be increasing or decreasing
[00:41:00.360]To a expected land values over the upcoming year to be increasing or decreasing and
[00:41:07.410]I forget the third one off the top of my head. The two things. The first two
[00:41:12.960]We expect according to the survey participants, their average they expect us to be the declining maybe another three to 5% I don't remember the exact number off the top of my head.
[00:41:23.940]But the number of land sales offered. I think it was anticipated slightly increase the volume of land sales in the state can vary a little bit based on work current commodity prices are livestock prices, whatever.
[00:41:38.550]20 1213 seem a little bit of an uptick overall and to see in a brassica we see a very low percent of land turnover every year. I don't know the exact amount, but it
[00:41:48.780]I would guess, you know, one, two, maybe one and a quarter percent. It's very low amount. I think in the heyday of maybe 2012 or 13 you might have seen that
[00:41:57.840]Maybe 2% very slightly higher than that. So I'm going to move over. I'm going to read the question off route. The question that we had presented to us, is it says FSA doesn't allow for any dirt work on cropland that's been damaged until
[00:42:17.250]They termed it a question that was posed was a cultural resource survey has been done.
[00:42:23.490]So basically, it gets on the lines. If you've been applying for assistance.
[00:42:28.290]If you had to file paperwork these things tend to take quite a while to get processed the question basically is related to these
[00:42:36.450]Other insurance company or USD energy is there anything we can do to help facilitate the process out to make response be faster and I'll let Alan address. Thanks, Jim. That's really kind friend there.
[00:42:50.880]I don't know what they're gonna, you know, you may want to find out your local FSA office who's on to county committee and call up your neighbors that are on the county committee and say what's the holdup
[00:43:00.930]Because I understand that that would be frustrating but i i also think that you probably better follow the rules. If you want to get the emergency conservation program help and
[00:43:09.690]If they say you can't do anything until you have certain things done, then you better hang on. I know there's no good answer to that.
[00:43:15.600]And there's a lot of applications. Yeah, there's a ton of applications. I mean, you've nobody's alone and so
[00:43:21.120]You know, it's just, it's just going to be a backlog. I mean, we're nobody's prepared for that kind of CATASTROPHIC FLOOD government shutdown in Farmville
[00:43:28.440]Well yeah, I mean, yeah, you have to say emphasize, go to the cup. A couple other things on your plate. I mean, like they're trying to roll out a new farm bill and you're trying to get trying to get geared up to sign people up and
[00:43:38.340]And so it's just it's just unfortunate timing and I, I wish I had a better answer for that. But I simply do not. There's no way
[00:43:45.360]I can give you a good answer on that. And then you so call your local up and say office and keep seeing what's going on, but be cooperative. Don't be too big of a pain but but keep pushing them as you as you can because it would only make sense.
[00:43:59.220]I think the other questions online. We don't have any other questions submitted right now. But, by all means, if you have something
[00:44:06.930]We're actually moving along pretty good sign out. And I thought, we're going to be moving too slow today but
[00:44:12.780]Elijah to talk about our upcoming meetings. Yeah. So Jim and I wanted to get these dates out to you.
[00:44:18.630]Because there'll be happening. Some will be happening before our next meeting our next meeting will be on August 19 I think
[00:44:25.080]So the next one of the quarterly so will be on August 19 but but we're doing a
[00:44:30.900]Kind of a pilot series to talk about budgeting finances for the crop ground and negotiation communication issues of course communications always kind of an issue. We've got
[00:44:41.760]123456 places identified across eastern Nebraska primarily
[00:44:47.670]Into one of June, July, July 23 to plat county extension office in Columbus and the new the new to them Extension office in downtown Columbus and then on August 8 we're in Saunders County.
[00:44:59.010]Its ninth and Dakota County Dakota city at their extension office in in in how the 19th, 20th, 21st square in Howard County St. Paul.
[00:45:06.930]The slim counting Wilbur and then also Lancaster County here in Lincoln. Those are all about three our meetings.
[00:45:13.110]There will be a charge to attend those meetings. So check with that local host, see what that is. Depends on if the meetings includes lunch or not, at the most of them do not. But there's a couple of them to do.
[00:45:23.070]And so just know that those are coming up. And if you'd like to hear the latest our thoughts for this year are actually going towards to your
[00:45:32.250]On a cash payments meeting so there's there's a covenant. Here's the topics we're planning on. No, no, no, this is topics we're planning on the next quarterly webinar which will be the 19th after the Howard County meeting.
[00:45:43.320]But for these meetings for the meetings on the screen right now. Jim, of course, to give you
[00:45:47.880]Guys, a catchment update. I'll be talking about communication, but will also be throwing some some stuff on glass and clear on budgeting, the new budget model.
[00:45:55.050]Is going to be coming out and about, you know, in a few months. And we want to get people updated on that.
[00:45:59.670]And what should be good for both landlords and tenants, but especially tenants and then Austin do a failed and myself will be talking about negotiation and now that can work in a catchment situation.
[00:46:11.280]Yeah, oh yeah of course for me to for me to participate. Since my title now is the farm succession coordinator or farm succession educator
[00:46:18.990]I will be talking about succession of farm ground to and getting some people some information say get that process started to haven't given that some thought. It's an important process and important.
[00:46:29.340]You have to give that some thought and get going on that. So we'll be talking about that to
[00:46:33.300]The other thing, Jim and I want to remind you about is our next meeting will be three months from tonight on third Monday of August.
[00:46:39.210]And the last one for this year is the third Monday of November, again, and they're both going to be 630 central
[00:46:45.990]And GM will be talking about the final values for cash grants if they change very much since he's plumeri values which is shared with you tonight it's talking about some financial implications for changes and values.
[00:46:57.270]Values. I'll be talking about verbal and written leases and the proper methods for terminating a written list because it has to be done by August 31 before September 1
[00:47:07.710]And we'll be talking about of course some considerations for next year's leases. If you're reading negotiating at that time. And then we'll
[00:47:13.950]We'll just like tonight have your questions come in and we'll be reviewing those submitted questions for participants and talk about other things we have going on, especially as we reach the fall period of time. So,
[00:47:25.380]We're glad to be with you. And those are things we have coming up and just thought we'd share that. Any other questions came in.
[00:47:33.960]Yeah, so I don't like I said, we actually did state in time, which come to her in person workshop. We're in Aquarius for taking up too much time, but I will say that people that do come to our in person workshops. This is a new pilot series recharge my charges small fee.
[00:47:53.760]Why don't we pop those backup there, so we'll leave these up on screen for a little bit here call the local extension office. I'll be hosting
[00:48:03.210]The numbers are listed there get more details if there's any lunch or not and cost. We've always have
[00:48:11.310]People that come through our traditional landlord tenant cash rent meetings really tend to enjoy Alan Alan a more so than I. He likes people out more and I do with
[00:48:21.240]The interaction of the people. They're the kind of questions I get asked, there's a lot of questions that are
[00:48:28.710]challenges you're facing on your property are probably very similar to what many land owners are facing across Nebraska. So by all means, if you can join us during the day.
[00:48:38.880]We will be rolling out probably 1015 landlord tenant cash rent meetings later this between November.
[00:48:47.070]2019 through March of 2020 so there will be more meetings that will be more of a statewide series but traditionally we do about a three hour meeting and
[00:48:58.620]This is really a plant appear coming for the summer. The other thing we don't have any on the books yet but with the new farm bill that's coming out there definitely will be some outreach done in August August is supposed to be a slow month for me, but I don't think so, this year.
[00:49:13.140]There are people such as myself. Awesome. Dear felt in the southeast to Austin, I will be working the greater eastern half of Nebraska together doing Farm Bill meetings.
[00:49:22.920]If you're interested in the farm bill participating staying involved in your landlord tenant related matters. Those are great meetings to come to as well. The other thing I can say is Alan and I. This is our second time of trying to
[00:49:39.930]Trying to do these kind of meetings online if you don't like something if Alan talk too fast or I talk too fast or you couldn't hear us.
[00:49:48.690]We're trying to do this when we're recording it we're doing it later at night. So there's hardly anyone on campus now. So it's pretty quiet. We didn't have one question come in and says, we had Farm Bill uptake to August 19 remote remote meeting, please.
[00:50:04.380]I'll tell you what, if we have enough interest on it. I think we could either briefly the farm bill to do a decent job of explaining it your private 35 minutes to 45 minutes at a minimum for the Cliff Notes addition.
[00:50:19.980]If you're interested, I think we can maybe do a special session and open it up to our mailing database. We have our we can put something together but
[00:50:31.050]Like I said, if this really works good to do these evening meetings I acknowledge there's a lot of us that work during the day they can't necessarily go to these things be like these.
[00:50:40.320]Send Alan or I are both of us an email if you really like something we're trying to figure out different ways to reach people
[00:50:47.400]You know, in person meetings are fun costs lot to get there and back, and I know it's not fun watching in one hour webinar always so we try hopefully you can understand what we're saying.
[00:50:58.740]And this will be archived in June, we had another question submitted to the Q AMP a box and that is will tonight slides be available online. Well, I, I, we can probably can make them available online. So issue same website as you registered
[00:51:12.630]Farm Maggie kinda yunel.edu slash real estate and it also know that tonight's will archive tonight's webinar on that website to and others. You can rewatch the whole thing. If you want to
[00:51:26.010]So that will be available. So we did, we will yes dancer. Yes, you'll be able to watch our tape give to someone else, somebody else who needs to hear this information, or you can see our
[00:51:37.140]Our slides available for download. Let's bring this up one more time. Let's bring up the final slide your one more time, if anybody needs writing these numbers down otherwise I'm going to stop the recording and we'll stop that and we'll kind of go from there. And in
[00:51:55.320]Stone recording

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Ag Land Management Quarterly February 2019

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