Webinar: 2020 Nebraska Farm Real Estate Report Overview
Department of Agricultural Economics
Author
07/17/2020
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35
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Description
Wit Jim Jansen, extension educator and agricultural economist, UNL Agricultural Economics.
Nebraska agricultural land values increased by 3% over the last year, to a statewide average of $2,725 per acre, according to the final results of the University of Nebraska-Lincoln’s 2020 Farm Real Estate Report. This marks the first annual increase since land values in the state peaked at $3,315 per acre in 2014.
Survey participants reported that 1031 tax exchanges, non-farmer investor interest in land purchases and current interest rate levels contributed to higher market values. These forces were reported as slightly positive in impacting future land values prior to the domestic outbreak of COVID-19.
This webinar will provide an overview of 2020 land values, trends and outlook.
Searchable Transcript
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- [00:01:27.030]Ryan Evans: Good afternoon, everybody. Thanks for joining us. I'm Ryan Evans with the Department of Agricultural Economics at the University of Nebraska, Lincoln.
- [00:01:34.980]Ryan Evans: Wanting to welcome you to our weekly webinar series. Today, this is part of our series that runs every Thursday at noon produced by our extension farm and ranch management team.
- [00:01:44.790]Ryan Evans: You can find recordings of these sessions a schedule of upcoming webinars and other resources on our website at farm ul.edu
- [00:01:53.790]Ryan Evans: One resource that is especially important right now is the Nebraska rural response hotline in times of stress, knowing when to reach out is essential.
- [00:02:03.840]Ryan Evans: The Nebraska rural response hotline can provide mental health counseling information regarding legal assistance financial clinics mediation and more hotlines toll free number is 1-800-464-0258. In addition, a wealth of resources related to stress and wellness can be found at rural wellness.edu
- [00:02:27.450]Ryan Evans: During today's webinar. We want to invite you to submit questions in the chat box, which we will work to have answered as time allows. At the end of the presentation.
- [00:02:36.840]Ryan Evans: Today's topic is one that's important for land owners operators and private sector professionals alike.
- [00:02:42.930]Ryan Evans: The Nebraska farm real estate report is issued every year by the Department of Agricultural Economics based on the input of an expert panel comprising members engage in agricultural land and rental markets throughout Nebraska.
- [00:02:55.560]Ryan Evans: For the first time since 2014 the average value of ag land and states on increase around 3%
- [00:03:02.760]Ryan Evans: To walk us through the reports findings economic factors to consider and how the information might be applied in lease agreements and more, we're joined today by one of the reports co authors Jim Jansen
- [00:03:14.010]Ryan Evans: Since 2014 Jim has held the extension position of agricultural economist for the northeast part of the state working in the Department of Agricultural Economics out of the Haskell add lab near Concord.
- [00:03:26.580]Ryan Evans: He obtained his bachelor's in ag econ from South Dakota State followed by masters in both agricultural economics in agronomy and Crop Science from you as well. So right now hand it off to you, Jim.
- [00:03:38.730]Jim Jansen: Very good.
- [00:03:40.410]Jim Jansen: Switch over here.
- [00:03:50.400]Jim Jansen: Alright, thanks for having me. Ryan, for those of you joining us today. Appreciate you getting on. I know this is last four months have been kind of a shake up from normal
- [00:04:00.120]Jim Jansen: Business, as well as lot of stress place and operators across the state. So we hope to kind of provide an overview of what we did in the real estate survey.
- [00:04:09.270]Jim Jansen: Some brief information on where trends in the market value of land is currently in the State of Nebraska according to our survey work.
- [00:04:17.970]Jim Jansen: And then follow that up with rental rates and then to pull everything together today. We always have a annually special feature section that takes a closer look at
- [00:04:29.220]Jim Jansen: Particular issue of interest and this year we took a closer look at our leases designed in Nebraska in 2019
- [00:04:37.020]Jim Jansen: We want to influence did all the flooding or excess moisture lead to a exceptional number of prevent planet acres across the state, Nebraska.
- [00:04:45.720]Jim Jansen: How did that play into everything, so I'll be the final portion of the presentation. Jeff Stokes is are endowed chair of agricultural finance he
- [00:04:55.110]Jim Jansen: been with us for several years now and he's also the co author. You have any questions we asked that you'd reach out to me via email or phone number or
- [00:05:05.100]Jim Jansen: If you'd like to visit one on one. And there's a certain time that only works during the day free, let me know and I'm really flexible, I should be able to accommodate just about anything.
- [00:05:19.290]Jim Jansen: Okay, the legal folks that you nl asked me to talk about this briefly I'll just spend a second here information were providing today was based on survey opinions survey opinions were collected
- [00:05:31.470]Jim Jansen: As we noted in the bottom portion of this slide. They were collected prior to some of the Kobe 19 event.
- [00:05:39.360]Jim Jansen: That being said, there are a fair number of people in the state that maybe might have been negotiated their rental rates, a little bit differently if they had knowing
- [00:05:47.820]Jim Jansen: What was in store for everyone. So that's why we're encouraging people it when it comes to your farm real estate needs.
- [00:05:54.840]Jim Jansen: Be willing whether a landlord tenant to provide some flexibility to account for this unprecedented level of time in terms of uncertainty and
- [00:06:05.190]Jim Jansen: There's a lot of prices for the major commodities or lifestyle classes that we raise across the state that many folks maybe hadn't been expecting. So once again, information size survey work assessments we currently produce and that being said, let's go ahead and get started.
- [00:06:23.700]Jim Jansen: brief overview on the real estate survey. If you'd like to look at the complete report that in addition to the information. I'm going to be talking about today, there is additional information on things related to historic land values cash rental rates rates of return.
- [00:06:41.130]Jim Jansen: Some various USDA information on number of farms, all of that is contained in the appendix of the report, but each year we surveyed land industry professionals include save your cultural bankers.
- [00:06:54.510]Jim Jansen: professional writers farm and ranch management companies as well as a cultural appraisers agricultural appraisers are those folks at for a living. They put value on the asset.
- [00:07:07.500]Jim Jansen: Of interest. So from the results from their information we summarize results twice each year. The preliminary estimates come out in March, the preliminary estimates have additional details we on
- [00:07:21.330]Jim Jansen: Or I should say that feeling generate results have details related to land values as well as cash rental rates you cash rental rates in
- [00:07:28.800]Jim Jansen: Early March is kind of a key piece of information, a lot of folks are looking for final report has additional details on actual sales things like
- [00:07:37.890]Jim Jansen: Who's buying land. Who's selling land our land purchases being findings cash mortgage contract for deed that, things of that nature can be found from the sample set of sales that were reported to us.
- [00:07:51.390]Jim Jansen: Currently, if you want to find a copy of the real estate report, you can do a simple web search, look for the term Nebraska farm real estate report be able to find it that way.
- [00:08:02.400]Jim Jansen: Or the other option is go to the website at the time that you and l.edu backslash real estate now in there we have our current years record.
- [00:08:12.660]Jim Jansen: Digital Commons with the Emerson brassica. I think we have just about every report up there. Now that's been digitized. So if you have any questions need anything.
- [00:08:22.860]Jim Jansen: Let us know what we can do to help you out.
- [00:08:26.550]Jim Jansen: So a little bit overview on how we summarize information stay in Nebraska. We take all 93 counties and divide them into eight different areas.
- [00:08:35.610]Jim Jansen: These areas are referred is referred to as the statistical districts, some folks refer to them as crop recording districts
- [00:08:45.360]Jim Jansen: The main thing to be no one is that since the inception of report, the state has always been divided in this manner.
- [00:08:51.990]Jim Jansen: Today, where University, Nebraska, Lincoln is based in Lancaster County, so that would be in the East district.
- [00:08:59.400]Jim Jansen: You might note there are folks that own properties just across the county line from say sling county or vice versa.
- [00:09:06.330]Jim Jansen: Sometimes you might have a property that might follow the trends of the southeast or the east, a little bit more or less, even if it is technically inside of one district or the other.
- [00:09:15.990]Jim Jansen: But the thing that makes Nebraska me because we have about 45 million acres of agricultural land but half the state is either dry land or irrigated crowd land.
- [00:09:26.070]Jim Jansen: And the remainder of the state is either inhale and or, more importantly, for a lot of the cow calf, folks.
- [00:09:32.370]Jim Jansen: grazing land. So the epicenter of combining these two things really distinguished us as us as a beefsteak because we have a very robust cow calf, as well as a lifestyle eating industry.
- [00:09:45.270]Jim Jansen: So taking all these things into account, coupled with the fact we have more irrigated cropland in this state.
- [00:09:51.420]Jim Jansen: Around eight and a half million acres have I should probably look into the more recent census of a fingers but around the eight and a half million, which is the most number of irrigated acres anywhere in the State of Nebraska.
- [00:10:04.140]Jim Jansen: Or anywhere in the United States. So that being said, there's a lot of unique features that sets our state, apart from other regions of the United States or even other countries that produce a goods.
- [00:10:17.130]Jim Jansen: So first part, say land values.
- [00:10:20.910]Jim Jansen: Do you think snow that I want to point out once again the survey was conducted starting in the middle of January through the middle of March.
- [00:10:28.560]Jim Jansen: Or a few surveys that came in after that. But the majority of the responses that came in they came in prior to many of the Kobe 19 events and the events that transpired in our commodity markets.
- [00:10:41.070]Jim Jansen: When we estimated the market value of planned as a February 1 2020 compared to February 1 29 team.
- [00:10:50.760]Jim Jansen: We estimated the market value of land in Nebraska, that if you know in the bottom left hand corner of the state, just this to the left of the southwest corner of the state we estimated the market value at 20 $725 an acre or up approximately 3% compared to the prior year. That being said,
- [00:11:13.620]Jim Jansen: From 2014 until 2019 we've seen a decline of about 20% so I'm not trying to indicate this as a sharp correction. But we're seeing a period when we estimated the market value.
- [00:11:26.280]Jim Jansen: That the market value of land was either steady to slightly higher across the majority of the state, with some areas, noting just a very small increase or even a slight decline.
- [00:11:36.090]Jim Jansen: When you see a very small increase of 1% plus or minus and basically says the markets kind of unchanged, or we're not seeing a lot of movement.
- [00:11:43.470]Jim Jansen: Some of the more robust strength we seen was in the eastern part of the state which historically
- [00:11:48.840]Jim Jansen: The Eastern third tends to fall a little bit closer in the western two thirds tends to follow a little bit different path from the eastern part
- [00:11:56.670]Jim Jansen: Has to do with rainfall soil type presence variegation wide variety of things in the Central District kind of follows EASTERN DISTRICT, to an extent as well.
- [00:12:10.140]Jim Jansen: Taking the historical land value that we have estimated since 1978 career at the University of Nebraska based on expert opinions.
- [00:12:19.320]Jim Jansen: And charting it so it starts on the left hand and 1978 the right hand of 2020 so blue land, it's referred to as Nebraska all land a gland value. So if you take into account all the different types of land. We asked me.
- [00:12:34.050]Jim Jansen: And if you put them together, we would estimate that Nebraska farmland values starting to kind of the late 1990s, early 2000s went through an exceptional period of growth by a period. Decline of about 20% for the current era of about 3%
- [00:12:52.410]Jim Jansen: The other side of the puzzle. What is land worth. We had many folks asked me, what is their land worth. Well, there's basically two things. One, the earning potential of your acid.
- [00:13:03.840]Jim Jansen: Land experiencing exceptional period starting in late 2000s. Couple of the 2012 drought. We said some of the highest real prices, we've seen in recent history for the value of land across
- [00:13:17.880]Jim Jansen: For the value of the commodities produced on our land, whether corn, soybeans, or even livestock. Since then, things have declined. Some of the challenges faced by many agricultural producers when it comes to cash flowing a budget, it relates to evaluate what we're producing and I think
- [00:13:37.140]Jim Jansen: We see a fairly sharp decline and this is a marketing year average price of corn Nebraska and I believe this was the marketing or price average I took, I want to say in May or June.
- [00:13:51.060]Jim Jansen: Which
- [00:13:52.770]Jim Jansen: Compared to the marketing or price average adjustments of March is down down maybe 20 3040 cents, depending on your terminal and your basis levels.
- [00:14:04.170]Jim Jansen: With that being said, Many landowners are facing challenges when it comes to
- [00:14:10.260]Jim Jansen: Property Texas one phenomenon that people have expressed to me over this period of time when we seen declining land values.
- [00:14:17.850]Jim Jansen: Was how come or how can my property taxes continue to increase. If the market value of land is declining. The thing to note there's two different things there.
- [00:14:28.170]Jim Jansen: When we talk about the market value of. And so we asked the question we had a willing buyer willing seller property or the car or whatever ass. If you had this means sold that it wasn't being sold to to an undue burden.
- [00:14:43.200]Jim Jansen: Somebody going broker someone having to sell an asset because of divorce or something. If that's the case.
- [00:14:50.700]Jim Jansen: When we look at the market value. It's at a point in time we estimate the market value as of February 120 20 compared to February 1 2019
- [00:15:01.710]Jim Jansen: In the State of Nebraska, which if you're joining us from another state today every state in the Union has slightly different laws and some are significantly different than Nebraska when it comes to our neighboring egg states, Iowa, South Dakota, Minnesota, Kansas, Missouri.
- [00:15:18.540]Jim Jansen: When it comes to
- [00:15:20.940]Jim Jansen: The assessed value of land in Nebraska. It's based off of three year median hagglund value. And what I mean by that is, each fall
- [00:15:31.800]Jim Jansen: County assessors across the state are going to look back over the last three years of sales split your county up depending on how big it is.
- [00:15:39.720]Jim Jansen: There's different ways of doing it. But the main thing is is they look at you know say if you're in the northern part of the county, they might look at all irrigated cropland sales over the last three years.
- [00:15:50.700]Jim Jansen: Well, when you look back across time, even if we're on the downhill slide here, we still may be pulling from a period of time where land values are considerably higher
- [00:16:01.590]Jim Jansen: Than maybe where they were last year. And who knows, maybe land values by continue to be lower coming into next year. If the Coleman
- [00:16:10.170]Jim Jansen: keeps pulling down the value of a lot of the commodities, we produce so the thing I'm going to emphasize here is assessed value is based off of three year
- [00:16:19.200]Jim Jansen: Median Eglin value to determine what this assessment should be. And remember meeting is if you look over the last three years median wealth is not necessarily the average, but think of it as the number in the middle related to all the numbers that you had brought in.
- [00:16:37.710]Jim Jansen: One other thing I wanted to know why or how can land values machinery prices home prices. How can all these things, maintain the level of values that they have
- [00:16:49.980]Jim Jansen: That being said, it relates to what does it cost to finance a purchase an example, if you're in the marked by go buy a different car, a new car.
- [00:17:00.930]Jim Jansen: And you got a set budget of so many hundred a month to dedicate towards that loan can you afford to pay more or less for that asset. If you are having pays say 0.9 verses 9% interest.
- [00:17:14.550]Jim Jansen: Well, if it's an even payment for a set period of time and you're going to have a set budget have so much a month.
- [00:17:20.580]Jim Jansen: You probably can afford. If you're looking at the percent on the right hand side of this chart. You can probably afford afford to pay more. When you have a lower interest rate on that loan that you intend to acquire
- [00:17:33.420]Jim Jansen: So that being said, we like it and I acknowledge these are not the interest rates at land loans are currently getting but the 10 year Treasury yield rate.
- [00:17:43.380]Jim Jansen: That is a indication of long term debt. You know what direction as long term debt phones going home loans land loans, whatever might be at the time when I put this slide together to a 10 year Treasuries were yielding dirty around 1%
- [00:18:00.600]Jim Jansen: Every year I do this, I keep saying, you know, I can't go any lower well. But one thing that has infused stability into some of the acid values or at least it has that expedited
- [00:18:11.610]Jim Jansen: declined to decline even further than what we might have anticipated could have happened is money is still fairly inexpensive. An alternative forms of investment, the rate of return on them may not be the highest so earning potential land, coupled with an interest rates.
- [00:18:32.130]Jim Jansen: Are two of the driving factors in our state that lead to changes in land buys and once again I can't emphasize enough we are estimating the market value in our report.
- [00:18:41.700]Jim Jansen: Many folks who, when it comes to a farm transition, they might get an appraisal done an estimate the market value of the
- [00:18:48.390]Jim Jansen: Of an asset at the time of someone's passing or say the day after it is adequate of value to establish the basis on the property for transition assessments once again are based off a three year period. So obviously, a period of time.
- [00:19:06.390]Jim Jansen: That may not necessarily completely reflect what the current market is doing. But if they're trying to take a look at what what what what would you assess the value to be at Mrs. Obviously, a point that is very
- [00:19:21.270]Jim Jansen: A lot of discussions are going on on what happened to real estate values related to taxation and it's something that we look forward to at the state legislature possibly reform and I can't emphasize enough state stay in tune with reading different things.
- [00:19:39.330]Jim Jansen: The one thing that I wanted to point out the Omaha world herald did an article, Mrs. A little dated it's going back two years or so now
- [00:19:46.620]Jim Jansen: But once again assessments on a gland are based off at three year period. And if you're looking at the bottom axis here the
- [00:19:56.580]Jim Jansen: Chart. You'll see this is for historical period of time from back from 2012 to 2018
- [00:20:03.960]Jim Jansen: And a gland is based off a three year period for assessments. You see, there was a period one of those exceptional period of time when assessments went up.
- [00:20:13.590]Jim Jansen: There, since declined slightly. And I think if you put another year on here you might see this down just a little bit more
- [00:20:20.700]Jim Jansen: But based on how the mechanics, he got it. When you look at an issue, go look at the mechanics of what's going on, how hard the laws and statutes guiding us
- [00:20:28.590]Jim Jansen: And this is one reason we seen assessments go so high and we're not seeing them come back down quite as fast because we're not seeing the market value of land drop quite as fast
- [00:20:41.070]Jim Jansen: People always ask the question, why is there so much concern on property taxes. If you don't, you're not a native world into individual or someone that necessarily owns a gland and your Brett rasp Farm Bureau did an article
- [00:20:56.010]Jim Jansen: Just a few days ago, in fact, where they took a look at changes and the property taxes levied on a gland over a roughly a one decade period.
- [00:21:06.390]Jim Jansen: And on the bottom there you see the percent change from less than 50% to 50 to 100 hundred 50 many even see some from 150 to 200%
- [00:21:17.430]Jim Jansen: main take home on this is there's a lot of areas in the state as seeing substantial changes in the property taxes lobbied
- [00:21:26.400]Jim Jansen: And that's why there's a lot of concern voice across the entire state and I once again stay informed reading the news articles, some folks viewing us today on this webinar, maybe
- [00:21:37.980]Jim Jansen: Integrated into some of these
- [00:21:40.650]Jim Jansen: Stakeholder organization. So this is my last topic on property taxes, not a property tax talk
- [00:21:46.770]Jim Jansen: I think it's just important to understand the basics of what the differences between the market value versus what assessments that are guided by the state in and Brasco might be
- [00:21:55.560]Jim Jansen: And put some visuals to, you know, what is happening and what has happened is room for you here. Over the last decade. So there's a lot of concern and a lot of interest being voiced on this particular matter.
- [00:22:10.140]Jim Jansen: Okay, so getting back on topic a little bit more
- [00:22:13.650]Jim Jansen: If you have interest if you have different types of land that you're trying to just get a grasp on what might my property be worth a
- [00:22:20.880]Jim Jansen: These aren't exact numbers because there for a big geographical area, but thinking it's in the ballpark in terms of estimates are you talking 1500 4500
- [00:22:29.880]Jim Jansen: What's the difference when we see there's quite a difference across the state and prosper. We have values and four or five 6000 on Eastern private state.
- [00:22:37.560]Jim Jansen: Versus 615 hundred or so in the western part things to know here. This is for trialing crowd plan with hot irrigation potential. We also estimated value for dry land cropland with irrigation potential, the difference between the two land classes is dry land proud plan does not have
- [00:22:59.250]Jim Jansen: Without irrigation potential does not either half of water or water regulations in the area that appropriations that guide the use of
- [00:23:08.070]Jim Jansen: Water prayer, who tends to be irrigation purposes. Do not allow for future development at this time. So that's the main difference, but we're seeing, there's quite a difference across the state. When it comes to some of these
- [00:23:21.930]Jim Jansen: grazing land it seem that grazing land in a state of Nebraska was up slightly, when it comes to that we noticed that there's some differences across the state of Nebraska.
- [00:23:35.040]Jim Jansen: up slightly and just depends where you're at.
- [00:23:38.700]Jim Jansen: The big thing on grazing land there are certain areas of state, especially in the eastern portion of the state where
- [00:23:47.130]Jim Jansen: And I just recognized on the last slide, I may need to take a double. Look at that. But I believe these numbers are correct on this slide. And when it comes to grazing land.
- [00:23:56.790]Jim Jansen: eastern part of the state, we see there are certain areas that don't have as much grazing land compared to the western part. So some of the issues are some of the interest expressed to us and why we're seeing higher real estate values. The really two things such as
- [00:24:12.450]Jim Jansen: Limited supply when it comes to the availabilities sales.
- [00:24:17.700]Jim Jansen: Also demand is still strong people are still looking to buy people are taking looking to take advantage of lower interest rates at this period of time, things of that nature.
- [00:24:33.030]Jim Jansen: center pivot irrigated cropland is our highest price land value in the state of Alaska.
- [00:24:40.230]Jim Jansen: When it comes to center pivot irrigated cropland. Once again, this is a very 120 20 compared to 31 2019 and I fix that one there too. I missed that one. The things to note here the estimated market value of land is compared
- [00:24:57.780]Jim Jansen: There's a very strong presence of having a higher real estate values on the eastern part compared to the Western two thirds when it comes to the Western to thurs what differences are there with respect to
- [00:25:14.340]Jim Jansen: Things like how are the real estate values associated with availability of water, things of that nature. So, we noticed in certain areas and water. It has some challenges and then other areas were a little bit better.
- [00:25:32.640]Jim Jansen: Other factors influencing farm real estate values across Nebraska. Some of the note reasons that were noted to us.
- [00:25:40.500]Jim Jansen: There we asked the folks that take our survey, they're referred to as panel members we when we asked the panel members, we asked him the same set of questions from year to year.
- [00:25:51.600]Jim Jansen: On the 1031 tactics change that's if you're trying to sell our slammed by another person somewhere else, like like kinda exchange that was one of the top reasons alternative investments interest rates were positive not extremely positive, but there were positive
- [00:26:09.450]Jim Jansen: Some things that stood out though future property tax policies. There's a lot of
- [00:26:15.630]Jim Jansen: Negativity associated with panel members that took this question property tax levels.
- [00:26:22.740]Jim Jansen: Current crop prices farm input costs, things of that nature. Stress and farm finances if you have tended to start doing quite as well as financially as they'd hoped. It's probably going to weigh down on farm finances if that will weigh down and farm finances enough we might see
- [00:26:42.630]Jim Jansen: Way and values declined to an extent, I will say, if you compare this image to
- [00:26:48.420]Jim Jansen: It is slightly more positive. Keeping in mind period when this was surveyed slightly more positive than the prior years was
- [00:27:00.360]Jim Jansen: All right, a little bit on cash rental rates.
- [00:27:04.530]Jim Jansen: So the way we take a look at it. I'll briefly talk on the percent change. And then I'm going to talk a little bit more on the range with respects to cash rents.
- [00:27:14.160]Jim Jansen: When it comes to cash rental rates we notice a slight increase across the state, with some areas, having a slight decline. I would not get so intertwined and what percent change. It was, what are the bigger trends, you're seeing
- [00:27:28.590]Jim Jansen: The things that were noted when it came to folks, taking the survey, especially related to crop production in
- [00:27:37.410]Jim Jansen: We had the start of disruptions and a lot of the commodities, the prices for a lot of our commodities with respects to trade when it comes to trade.
- [00:27:48.750]Jim Jansen: We had the marketing facilitation payments which in the State of Nebraska, we're not quite but they almost approached billion dollars are paid out over three times.
- [00:28:00.870]Jim Jansen: One payment that was paid out in installments. That was one reason noted that the farm finances. Some of the financial losses are some of the financial downturn because depress commodity prices was at least
- [00:28:15.030]Jim Jansen: In portion offset by some of these payments. So that's maybe why we seeing cash rental rates slightly increase or a little bit better than we anticipated.
- [00:28:25.020]Jim Jansen: The range that we've seen for cash rental rates are displayed here across the state of Nebraska. Now we don't provide summaries by the county level, but we do give a range on the cash rental rates by region of the state.
- [00:28:39.630]Jim Jansen: When we look at the regions of the states, we can see a little bit of a difference me if you think about geography.
- [00:28:46.890]Jim Jansen: Geography of the state. There are some areas where cash rental rates are a little bit higher.
- [00:28:52.200]Jim Jansen: Maybe you're in a county where the soil types, little bit better. Maybe it's not spoke quite as much. And there's other areas where it might be down a little bit and
- [00:29:00.960]Jim Jansen: So on and so forth. So we're seeing quite the spread of cash rental rates, I would encourage you, if you are in an operator or a landlord in one of these areas, think about
- [00:29:13.140]Jim Jansen: What potential is your property have in terms of yields relative to the region, are you on the upper side lower side or somewhere in between. So those are some of the factors when you think about
- [00:29:26.460]Jim Jansen: Little bit on irrigated cash rental rates with respects to the irrigated cash rental rates for 2020 these rates assume that the land owner land owner entity.
- [00:29:37.440]Jim Jansen: Owns a pivot the pump the power unit. Now, obviously the land that goes with it. If you have a tenant that is providing one of those components pivot pump power unit.
- [00:29:49.140]Jim Jansen: Primarily, you see a tenant bring on power unit or possibly a pivot, or maybe even on the pump, who knows.
- [00:29:56.370]Jim Jansen: You would probably adjust
- [00:29:59.160]Jim Jansen: The cash rental rate down to account for that.
- [00:30:04.290]Jim Jansen: So in addition to the range that we seen on cash roaming rates, we can go from the low three hundreds in the eastern part of the state to about 100 no low third in the western part of the state.
- [00:30:17.580]Jim Jansen: thing I forgot to mention on the prior slide we have an average of the high high third. So we asked question. What is the folks and take the survey.
- [00:30:26.340]Jim Jansen: What do you estimate the high third is on cash rents. What do you estimate the lower third is on cash France. And what would you estimate the average to be for the entire area.
- [00:30:36.900]Jim Jansen: Factoring in low and high. So that's what it's meant by the hell are the average of the high third average low third average all the responses and
- [00:30:50.430]Jim Jansen: All right, a little bit here when it comes to renting pasture to pasture and stay in Nebraska and the end of the day, you're either writing a check out or you're accepting and check for the total sum.
- [00:31:04.650]Jim Jansen: But you can rent by the ether, or you can rent by the pair. And then when it comes to renting by the acre or the pair we noted a fairly strong trend across the state's been up slightly.
- [00:31:18.210]Jim Jansen: Things on I will challenge folks that are renting whether a landlord or a tenant. What degree of services are the landlord or the tenant providing least when it comes to the grazing land common features associated with the grazing land include things like
- [00:31:35.730]Jim Jansen: Fencing water supply. We control brush control all these things, you have a tenant that's willing to maintain the fence. You have a tenant that's willing to maybe they don't pay for the materials, but they are willing to
- [00:31:52.830]Jim Jansen: Do the work of drilling the post holes, putting them in string wire. All these things are valuable to each party.
- [00:32:00.330]Jim Jansen: You have a landlord this baby semi retired, but do their health. They don't necessarily have livestock anymore, but they're willing to do some of these things, especially do a tenant that lives a long ways away.
- [00:32:10.140]Jim Jansen: See a lot of people down in the plant area taking catalog to the sand hills. Our average age of the ranch and population is a little bit higher than the farming population is
- [00:32:20.700]Jim Jansen: And that being said, we do see some folks take Catalan out matter. If that's the case, maybe they're willing to pay a rental rate as commiserate of the landlord providing some of the services I mentioned
- [00:32:37.290]Jim Jansen: Range on the pasture rental rates. Once again, release the quality of the land, you have, what kind of stocking rates, how big a parcel.
- [00:32:45.600]Jim Jansen: If you have a parcel that you can run nine pairs on versus 90 pairs to larger parcel might be more desirable because if I have 90 cows.
- [00:32:55.320]Jim Jansen: I don't want to ask take house multiple sites, I try to keep together and appropriate number and make sense. So that's one of those things you have to kind of think about with respect to
- [00:33:06.300]Jim Jansen: Some other things.
- [00:33:12.720]Jim Jansen: Okay. The other way to rent grazing land. We can talk about renting raising land on a per pair basis. So this is one cow one cap for the summer grazing season.
- [00:33:25.620]Jim Jansen: And when it comes to renting cow calf airs on a monthly basis, we see a range around giving the area, say you're in that $50 on the eastern part of the low
- [00:33:39.240]Jim Jansen: 30s on the western part. So if you're renting a say you're in an area they're going rate is $50 a month you rented for five months. Five times 50 is 250 so i'd be $250 for one cow one camp for the summer grazing see
- [00:33:57.390]Jim Jansen: And once again, when it comes to cash rants. Think about the factors that influence them who's doing what, when it comes to those services.
- [00:34:10.410]Jim Jansen: All right, I'm takes a few minutes here and talk about some trends that we're seeing in our leases across the state of Nebraska. There's some very interesting trends to be noted, and that being said, I want to highlight some of these
- [00:34:24.750]Jim Jansen: Things on estimating Catherine's if you're in a situation that you agreed to a cash rent and 2020 but the landlord.
- [00:34:33.420]Jim Jansen: Need to readjust to give them that we've seen some declines in the commodity prices, whatever. I have a couple different ways to estimate cash rounds.
- [00:34:43.470]Jim Jansen: First idea if you know what the regional rental rate is for in an area on a per acre basis, say you like a university, Nebraska, you identify it from another report, there's additional information out there. Wherever you identify it from
- [00:35:01.230]Jim Jansen: Say, you might also identify with regional Cornelius be able to find this through a crop insurance agent or someone that has knowledge on the area.
- [00:35:10.290]Jim Jansen: If you divide the average rental rate per acre divided by the average county corn yield you get what is referred to as the county rent per bushel. This says for and this ain't nothing sample every bushel of corn raised is $1 13 a bushel on
- [00:35:30.810]Jim Jansen: For every bushel of corn produced on this rented ground costs $1 13 of the sales price going towards rent.
- [00:35:39.600]Jim Jansen: But on the property you rent as less than the county average is not 120 Bushnell it's actually 105 social that's the case. You take the county rent per bushel.
- [00:35:50.700]Jim Jansen: And multiply it by the average yield or the farm as you're renting you adjust the county rental rate down to the arm level rental rate.
- [00:36:00.960]Jim Jansen: This is an example where the ground may not be quite as good as a county shelters, that's the case, you would charge rental rate lower because you don't have is the potential for quite as good a video. Maybe it stand your ground whatever the cases.
- [00:36:16.200]Jim Jansen: Next example cash equivalent crop share mistake case I got two scenarios set up here say I'm on a 5050 split. It's part of this split Lambert gets Hatfield and it gets half field. There's a very good example. I think
- [00:36:33.300]Jim Jansen: Back in March middle column we have right there says ground was capable of producing 160 emotional landlord gets half the tenant gets half
- [00:36:42.900]Jim Jansen: If that's the case, we take the average yield times by 50% so landlord gets at bushel per acre. And then if you multiply that by
- [00:36:52.950]Jim Jansen: $3 and 50 cents, which, you know, when we sons were assigned me the expectation for prices was a little bit better. So on a per acre basis as part of a share landlords taken home about 200
- [00:37:05.250]Jim Jansen: Don't forget if you're on a 5050 split as part of the crop sure you're probably going to see a landlord maybe paying half of the see fertilizer and chemical
- [00:37:14.790]Jim Jansen: Take away the landlord share the income minus landlord share of expenses. The difference between those two. Those represent and effect with the landlord is going to make now the obviously slaps pay property taxes or any other land ownership expenses from it.
- [00:37:32.940]Jim Jansen: But the thing to note there is
- [00:37:36.120]Jim Jansen: Even if you were accepting Catherine still have to pay those expenses. But if I signed a 5050 crop surely split with the income and expenses. I'm to speed I might make about 125 bucks maker.
- [00:37:50.640]Jim Jansen: B roll forward.
- [00:37:52.980]Jim Jansen: To say this month was looking at some prices, yesterday I just picked 310 a bushel prices are, you know, 3040 50% slower than what you had initially anticipated this fall.
- [00:38:06.180]Jim Jansen: Means our income per acre is less while you know it doesn't matter.
- [00:38:10.620]Jim Jansen: Necessarily what your income per acre is you have certain expenses associated with raising crops. When you buy the seed. When you spray it whatever fertilizer, you paid for those things, those expenses are kind of locked down for that.
- [00:38:23.400]Jim Jansen: So in this example, we're kind of trying to take
- [00:38:27.360]Jim Jansen: situation we had in the spring and compared to situation we have now we're trying to adjust the rent if I'm a landlord or if I'm a tenant trying to justify my cash rent to a landlord. This is one way to give some ideas. And so, say, hey,
- [00:38:43.440]Jim Jansen: Maybe we need to be talking 2030 bucks. Make your lower in cash rent, because it's not equitable given where current income is sitting there. Remember land owners are facing challenges and it's hard as well and owners pay highest property taxes tennis also face.
- [00:39:02.040]Jim Jansen: You press commodity prices for many of the common crops they grow across the state.
- [00:39:09.720]Jim Jansen: So the other thing to point out, if you really are struggling on sending the cash ran as your landlord. What would you anticipate making if we were on a cash rent instead of do any cash rent. We're doing a crop share
- [00:39:23.220]Jim Jansen: This is a really good example to break that down.
- [00:39:28.050]Jim Jansen: Another example return on investment. Got the grocery return on two different types of land here.
- [00:39:36.090]Jim Jansen: And when I say grocery to return. Remember the grocery to return does not necessarily reflect
- [00:39:42.420]Jim Jansen: land ownership expenses which the primary one being property tax. Yeah, the value of your asset you multiply it by a rate of return, return is an estimated rental read
- [00:39:53.040]Jim Jansen: You have to be very careful and rate of return the value for this to pay too big of a value for you to one the cash transfer and then be representative
- [00:40:01.710]Jim Jansen: This is kind of a number that he really a financial person or maybe a bank or they might be a little bit more aware of these kind of things.
- [00:40:11.460]Jim Jansen: Okay. Another question I get at least once a month, right now, in addition to many of our
- [00:40:17.340]Jim Jansen: Agricultural specialist across state with you and out. Let's say I got in case
- [00:40:24.240]Jim Jansen: When it to the site. Maybe you have an older landowner. It says, I don't doesn't make sense for me at my point in life by another pivot.
- [00:40:31.980]Jim Jansen: Or maybe they can't financially make it work in the situation, whatever the cases and you have a tenant, they, they put a new to pivot out on their personal ground, but they put another pivot take their own DNA, which isn't completely where I move it onto the rented.
- [00:40:47.220]Jim Jansen: If you do that,
- [00:40:49.350]Jim Jansen: We ask this question as part of our 2013 survey. And if you do that, take note here.
- [00:40:56.190]Jim Jansen: We would adjust the cash rental rate down because if you have someone bring a pivot. They don't have to pay for things like the depreciation of key.
- [00:41:04.440]Jim Jansen: Also
- [00:41:06.960]Jim Jansen: Possibly taxes or insurance. So you would take off. We estimated about six not quite 60% of the time that discount amount you would take off the cash.
- [00:41:18.510]Jim Jansen: And cash receipts 275 an acre. You take off $30 an acre because the tenants providing the pivot. If that's the case, you might have a effective cash random around to 45 or so.
- [00:41:31.410]Jim Jansen: Also, we know the discounts, a third of the time around 10 to 25 and then less than 10% of time it's greater than 51 note a very small percent. There was no adjustment made
- [00:41:44.550]Jim Jansen: Another question that we get is when it comes to case. If a tenant brings a power unit most common types power units diesel engine propane natural gas engine or even electric motor.
- [00:41:58.260]Jim Jansen: This one's probably more common than the pivot. One is if you see tenant bring, they say, I'll bring my diesel engine along if you rent your property to meet. If that's the case.
- [00:42:11.250]Jim Jansen: We give a breakdown in the four columns on the right hand side of the slide to show an example on a diesel engine.
- [00:42:19.920]Jim Jansen: About
- [00:42:22.740]Jim Jansen: 34% of the time you take off somewhere between nine to 10 or one to $9 an acre about another third of the time you take out the discount of 10 to 20
- [00:42:32.970]Jim Jansen: The tenants providing the diesel engine. We get a lot of reports coming in. Some people might take off 10 callbacks acre and nights kind of verified by some our results. The other thing on the diesel engines. Some of the newer diesel engines used on irrigation sites.
- [00:42:49.530]Jim Jansen: They have emission controls are various kinds on them. And this count by actually being the higher end because of the high def systems for emission controls make the engines costs more. So your discount rate for might be slightly higher than
- [00:43:07.560]Jim Jansen: That. All right. Another question we asked from our survey responses on the survey response.
- [00:43:15.840]Jim Jansen: Whether
- [00:43:17.250]Jim Jansen: Leases had provisions in them to account for damages and I saved from damages. I'm talking about things like extensive prevent plant, meaning you can't prop plant a crop in our proper time that would account for
- [00:43:35.700]Jim Jansen: How should I say, being able to plan to crowdfund an expedited banner that's appropriate for your crop insurance policy.
- [00:43:43.170]Jim Jansen: If that was the case.
- [00:43:46.920]Jim Jansen: We got about 70% of the time we had folks that
- [00:43:53.640]Jim Jansen: Didn't necessarily have the best provisions in place, part of the time we got partially and the remainder of the time we did have folks that take took the same
- [00:44:06.090]Jim Jansen: So those until we get done and then Ryan will help kind of facilitate some of these as we're going through, they can take home on this slide, prevent plant is typically something that we don't see to the degree that you might see in our neighbors to the north of us as probably one read
- [00:44:22.620]Jim Jansen: This is such extensive preventive plant provisions in many of our races. We've seen sustainable.
- [00:44:31.980]Jim Jansen: When it comes to
- [00:44:36.660]Jim Jansen: When it
- [00:44:39.030]Jim Jansen: Comes to the crop.
- [00:44:41.550]Jim Jansen: Let's see here. Right, next question for those folks that did experience prevent plan about 400,000 acres in the State of Nebraska that had proven plan when it came to prevent plant.
- [00:44:56.730]Jim Jansen: To the cash rivalries in 2019 what we found out a third of the time. Oh adjustments may not play 40% of time Brent was reduced. We didn't ask how much they just checked option records you
- [00:45:13.020]Jim Jansen: Know rent and then 14% of times some other something else was done, then get into that detail, I can't provide any other comments on that. But there was something that was done differently. And when it comes to
- [00:45:29.010]Jim Jansen: Put in specify exactly what that men. There are reports coming in. There are some people know the grounds as to what farm and eventually put a cover crop in in late summer. There are other cases where we had
- [00:45:45.300]Jim Jansen: Deposits of debris.
- [00:45:48.420]Jim Jansen: Branches seemed really heavy determinant said you can't plan.
- [00:45:56.730]Jim Jansen: Really varied across the state, on average, we had 400 just a little over 400,000, if you like, or the last decade. Our numbers are considerably lower. And I think 20 I believe
- [00:46:11.160]Jim Jansen: Not mistaken. I was 2015 or one of those years around that year and a little bit more
- [00:46:19.710]Jim Jansen: Little bit more prevent plan.
- [00:46:22.980]Jim Jansen: So,
- [00:46:26.310]Jim Jansen: You played it does occur across our state.
- [00:46:34.560]Jim Jansen: And the last kind of question on the special feature section that we took was
- [00:46:42.180]Jim Jansen: Variations, it was what was something different. Done. Compared to 2019 to account for flooding.
- [00:46:50.280]Jim Jansen: About half of the leases. It didn't make too much of a change
- [00:46:55.050]Jim Jansen: About a third of them. They did partially did some kind of adjustment to at least to account for excessive flooding and
- [00:47:02.670]Jim Jansen: Little over 10% of the time folks really did take a closer look at adjusting their leases to account for flood damages when it came to that prior slide on reduce rent what was meant by that.
- [00:47:16.590]Jim Jansen: reports coming into us indicated, there are worse certain individual let's say you had a property that
- [00:47:23.730]Jim Jansen: Maybe there was some degree wash down to it, maybe there was some round that wash not extensively, but something that you can do with a box blade or smaller mover in the tracker. Some folks on that kind of stuff.
- [00:47:37.410]Jim Jansen: Some folks counted the lamb tenant if they're willing to do remediation work.
- [00:47:43.350]Jim Jansen: And I talked to talking. If you know if you have 10 INCHES OF SAN across entire parcel. It's a little bit different deal but
- [00:47:48.600]Jim Jansen: Miners things, you know, things are hand intensive labor intensive. You gotta drive around with a
- [00:47:54.000]Jim Jansen: Four Wheeler and pick up their Brie and throw it in a trailer or something, some of these things, some of that could be counted in lieu of the cash right because it's providing what value to the landlord. If you have a tenant that's willing to help remediate some of those issues.
- [00:48:10.140]Jim Jansen: Final piece here in the State of Nebraska. If you do not have a lease in writing, we always highly encourage everyone to for the protection of the land tenant and the landlord is something happens to one of those parties. How do you accommodate
- [00:48:26.970]Jim Jansen: Well,
- [00:48:28.770]Jim Jansen: When it comes to that and somebody else would have to step into finish out that least, the best thing to do is to have at least in writing.
- [00:48:36.570]Jim Jansen: And in this day in and ask if you have a verbal lease, you need to terminate that verbal least before you go to a rent one
- [00:48:43.860]Jim Jansen: Critical date and the state is prior to September 1 we need to give a termination. Notice to our land.
- [00:48:51.330]Jim Jansen: Lord or land tenant to let me know that we want to terminate the verbal lease, because if we don't get at least six months notice on croplands leases.
- [00:49:00.900]Jim Jansen: Whatever terms we had with our verbal lease move forward to the following year great website to check out is at least 101 dot org on that website and you've downloaded Ferry Building the forum PDF, please.
- [00:49:16.080]Jim Jansen: The other thing. If you like what you're seeing today do a Google search for our internet search for a lean management quarterly as part of this.
- [00:49:26.280]Jim Jansen: Presentation. We do presentation pretty short one hour pound and Alec and myself.
- [00:49:34.290]Jim Jansen: Will be a little bit over repeat from what I talked about today, but
- [00:49:38.790]Jim Jansen: Alan will give
- [00:49:40.770]Jim Jansen: More details on least critical Reese provisions, give them a time of the year. And also we take Q AMP. A for different questions. So with that, I think I got a couple of questions that got emailed in as well as questions that came in, so
- [00:49:58.320]Jim Jansen: Let's see here.
- [00:50:01.800]Jim Jansen: A few questions. First one.
- [00:50:05.820]Jim Jansen: How do land values and cash rental rates relate
- [00:50:09.780]Jim Jansen: Typically cash rental rates are a little bit more responsive to commodity prices when it comes to
- [00:50:18.060]Jim Jansen: land values. Those tend to change and not necessarily quite as fast as cash rents do those are a little more sticky than what
- [00:50:26.730]Jim Jansen: Cash friends might be. So that was one question that came in. Another question that came in related to damages. We had an individual indicate
- [00:50:36.510]Jim Jansen: That
- [00:50:39.810]Jim Jansen: Go back a few slides here, if I can.
- [00:50:44.010]Jim Jansen: When it comes to damages this individual indicated that they had a parcel of ground was in corn related to that corn ground.
- [00:50:54.090]Jim Jansen: There was an area along a river, stream where they had wildlife that destroyed say five acres of the crowd. How do you account for that in the lease.
- [00:51:02.280]Jim Jansen: And they had said to what they did at the end of the year is they sized up how many acres had been exposed to that, you know, half the yield that they will usually have
- [00:51:11.310]Jim Jansen: And they send a different rental rate on that, but they kind of wanted to keep one rental rate across property. Well the best way to look at it is if you do have a property that is damaged just for one particular area.
- [00:51:24.780]Jim Jansen: You know, when it comes to a year if you got a person that's got to combine that can have a yield map or clearly can identify even visually that there were damages trying to draw those elements, separate from
- [00:51:38.430]Jim Jansen: The other parcel around is a good way to kind of account. So, okay, Ryan. Did you have some other questions.
- [00:51:47.010]Ryan Evans: Yeah. Couple more that came in. One was in reference to your slide number 19 I believe it is Jim the tornado graph where the panel redid the factors influencing ag land values.
- [00:51:59.340]Ryan Evans: Just a question of you mentioned 2020 responses being slightly more positive than last year. Does anything come to mind in terms of details of what people were more positive about or less negative about this year.
- [00:52:14.430]Jim Jansen: When I said they were more positive. The thing that I noted was we had more blue lines on the right hand side of the tornado graph than we did on the left hand side, the factors you know
- [00:52:25.860]Jim Jansen: 1031 exchange interest rates federal farm programs. Those are typically positive or they're if they're negative. They're not very negative
- [00:52:35.190]Jim Jansen: I will say these top five, negative horses tended to stay the same. So property tax policies current crop prices farm input costs property tax levels, those
- [00:52:46.410]Jim Jansen: In years when prices are really good 12 1314 some of the 2000s, we seen current crop prices and last stock prices were negative or a positive force.
- [00:52:58.200]Jim Jansen: My guess is if we pulled today, the same question. They may not be quite as positive based on the folks that took our survey, but that's kind of what stuck out
- [00:53:10.950]Ryan Evans: Great. And now one more. So far, asking about what the influences of purchases of ag land for future development near urban areas like Lincoln and Omaha might have on reported ag land values.
- [00:53:26.220]Jim Jansen: So a few things we when we get our actual Eglin sales reported to us it's you know it's not perfectly true. But obviously sales occurring in Douglas RP Lancaster Hall.
- [00:53:39.870]Jim Jansen: Handful other ones that if you see an exceptionally price sale that comes in. We tend to sort them out because we're trying to really focus on the egg land now.
- [00:53:50.550]Jim Jansen: I'm not saying they don't get into the averages, but we try to distinguish one from the other one because it's when you have a development potential
- [00:54:00.120]Jim Jansen: You know, maybe it's 10 years, five years, whatever the cases, the highest and best use at one point in time is different than the highest and best use native land.
- [00:54:09.720]Jim Jansen: If it's going to be made into housing development, save the next three to five years. The interim us maybe just simply planning to corner alfalfa or something. Until then, so we're trying to kind of keep those two apart from each other.
- [00:54:24.150]Jim Jansen: Great.
- [00:54:25.860]Ryan Evans: coming in through the chat here, Jim one just specific question on pasture rate is stated on the graph rather report as dollars per acre. Just a question that that in fact means dollars per acre times the number of acres than, equal the annual rent payment.
- [00:54:45.210]Jim Jansen: Move down here.
- [00:54:47.280]Jim Jansen: Okay, so I think we're talking in reference to something like this or we go to the range here. So this is for one acre and
- [00:54:56.130]Jim Jansen: If you have say 80 acres you at times that number by at
- [00:55:00.780]Jim Jansen: The thing that's tough when it comes to the per acre averages is there's a great degree of variation, especially on grazing land process state. So some of the lower rates, you might see in certain areas would reflect
- [00:55:14.430]Jim Jansen: A lower stocking rate or some attribute that isn't nearly as desirable to have because it takes four
- [00:55:25.110]Jim Jansen: Acres for the cow calf pair than it would in other areas, say, an area might have a parcel ground that's too much farm. So it's lower Stockton. Right. But that is
- [00:55:37.230]Jim Jansen: You configure it by the acre pre configured by the air and the numbers we have recorded here. As noted in Machar title that's on a monthly rate.
- [00:55:48.450]Jim Jansen: One question about little at least forms, Jim. If you can go back to that slide at the end. Perhaps we'll just display that information. One more time.
- [00:55:56.850]Ryan Evans: I believe it was at least one or one.org
- [00:56:00.540]Ryan Evans: It was a site there, and also a question about whether or not some of the charts can be downloaded. We will make the slides as well as the recording of this video available that should be up by tomorrow at noon. At farm ul.edu so you'll be able to work with what Jim is presenting today.
- [00:56:20.070]Ryan Evans: Another one that came in here, Jim, and some of your examples you were using an example of cash market price. It's just a question of where or how do you figure additional government income assistance that the producer might be getting for the farm and production.
- [00:56:37.050]Jim Jansen: Sure. Before I answer that question, Ryan. The other thing I wanted to know. I noticed I always go through these slides twice and I noticed I might have been off on a slider to in terms of my
- [00:56:46.260]Jim Jansen: Title label or even I think the one slide. I need to take a double check the values on there. I will correct those in the final version that gets posted and Ryan might be able to insert that file into the recording possible as well.
- [00:56:59.580]Jim Jansen: When it comes to government payments, we're talking about government disaster payments, things like marketing facilitation payment.
- [00:57:09.150]Jim Jansen: For coronavirus Food Assistance Program CF at arc PLC. There's a host of other ones. Why do we get those
- [00:57:18.030]Jim Jansen: Reason, we're getting them is arm finances the prices of folks are receiving the yields drought. All these things are adversely affecting egg producers.
- [00:57:29.520]Jim Jansen: The people that gets receive these payments are those engaged in production risk and what is meant by that is, those folks are participating in a crowd share are sharing into production risk. So if you're on a
- [00:57:45.990]Jim Jansen: Crop share you can
- [00:57:52.710]Jim Jansen: I gotta think this through. You're on a crop. Sure, if you're in a 5050 split, you would get 50% of the payment Johnny Cash lease. That's something that has to be negotiated and because these payments are not dollar for dollar for every loss. It comes I would tell you
- [00:58:10.830]Jim Jansen: If you're interested in getting the payments.
- [00:58:14.130]Jim Jansen: To be sure to participate in a prop here. But the reason we're getting payments, things are not good. And if they're not good at the adverse payments are being made are being made because they're trying to help offset some of the losses that producers may be seeing
- [00:58:33.480]Jim Jansen: Anything else, Ryan, or is that route for all
- [00:58:35.310]Ryan Evans: Time, there's
- [00:58:36.540]Ryan Evans: A question here.
- [00:58:38.970]Ryan Evans: Do you have percentage info on pasture leases as to the landowner versus a tenant bearing the cost of weed control.
- [00:58:49.530]Jim Jansen: Simple answer that is no. I will say when it comes to
- [00:58:54.720]Jim Jansen: certain chemicals used on pastures, who referred to as restricted use pesticides. So unless you have the license or permit to purchase them you may not be able to acquire them necessarily as the landlord.
- [00:59:06.420]Jim Jansen: The thing I would challenge you, as what kind of issues do you have on your grazing land. If you have in case where
- [00:59:12.990]Jim Jansen: There's significant weed infestations. Well, if you're renting that to new party, you're probably gonna have to take some off the cashier and
- [00:59:20.430]Jim Jansen: If I rent Ryan's ground and there's a lot of this holes and weeds brushed I know I'm going to have to control through some means
- [00:59:27.570]Jim Jansen: You probably want to add charge lower cash rent. Now, if you haven't retired land owner that's acquiring the spray and spring. Everything is take care of it and probably be a talking point that you might be a little bit more in love or cash or inside
- [00:59:41.310]Jim Jansen: Completely
- [00:59:45.300]Jim Jansen: Kind of varies based on where you're at in the stage, I guess, but
- [00:59:52.110]Jim Jansen: I think that's best answer I got free on that one, right.
- [00:59:55.500]Ryan Evans: Okay. Well, here are our and if people have other questions, Jim. If you can put up your contact slide again, I think you had one in there.
- [01:00:02.790]Ryan Evans: Of course, you're always available to answer questions by email or phone. And again, we will have this presentation. Jim slides up on our website by tomorrow.
- [01:00:12.870]Ryan Evans: Farm you and out.edu so thank you Jim. And thanks to everybody for joining us today. And as a reminder to check farm ul.edu for a schedule of more webinars centered around farm and ranch management.
- [01:00:26.460]Ryan Evans: The series will continue next Thursday at noon with a look at the financial considerations of forage purchases
- [01:00:32.820]Ryan Evans: In your email, you'll be receiving a short 32nd survey and we would really appreciate your feedback on today's webinar and your input on future sessions. Thanks again for joining us and we hope you have a great weekend.
- [01:00:44.250]Jim Jansen: Thanks for rewriting
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