Ag Land Leasing, Budgeting and Management for 2021 - Landlord/Tenant Cash Rent Workshop for Panhandle Region 1/7/2021

Department of Agricultural Economics Author

01/08/2021 Added

8 Plays

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[00:00:38.460]Jim Jansen: Okay, it looks like we are on the hour. Now to begin the meeting. It looks like we got a pretty tight group today. So as we're going along. If you have questions, be sure to type them in the chat pane.
[00:00:52.200]Jim Jansen: We will have the contact information for all the speakers on all of the slides, who can easily reach out to them via email, phone
[00:01:00.570]Jim Jansen: Some of them would probably even welcome a zoom session or a zoom call if you'd like to visit with them that way on one on one.
[00:01:07.650]Jim Jansen: So whatever works is works for us. My name is Jim Jansen I label and management outreach efforts here in Nebraska related to farm real estate and
[00:01:18.180]Jim Jansen: landlord tenant cash rent topics of that nature. You have Alvin ALEC who works in Parliament range transition
[00:01:25.560]Jim Jansen: Austin or felt, who is my counterpart here in eastern Nebraska and Glenna splint clear who works on topics related to budgeting and farm related finances. They also have Jessica gross Kafka, Jessica, did you want to make some comments to start us off.
[00:01:43.800]Jessica Groskopf: Hi everybody I'm Jessica gross calm. I'm the regional economist for the Panhandle and Northwest Nebraska. I'm excited to be here today. And if you have any direct comments specific to Western Nebraska. I'm here to answer those for you.
[00:02:04.560]Jim Jansen: All right, very good night. I'm sure she might chime in on a few things here and there throughout the day.
[00:02:09.870]Jim Jansen: As part of our meeting today if you registered online, you should have obviously gotten the link to log on.
[00:02:15.930]Jim Jansen: Depending upon when you registered. We had a couple of our staff members sent out a paper copy of the handouts for this meeting. If you haven't received them yet. Just know that they should be coming in the mail.
[00:02:28.800]Jim Jansen: Are planning a little bit differently for this meeting we had to had to intend it to be out in the Panhandle and late December in person, but it just didn't work out this year.
[00:02:37.800]Jim Jansen: We also include us short survey that survey is what allows us to keep doing these programs because it's grant money that allows us to pay for handouts and some of these things.
[00:02:47.340]Jim Jansen: So be sure to take a look at them and we did this meeting once this way in Lancaster County and it turned out pretty well.
[00:02:55.020]Jim Jansen: We tried to kind of boil everything down to about a two hour format, we'd had done this meeting once online over a three hour period. And people just came back. It was a little too much so.
[00:03:06.990]Jim Jansen: And let me take a one LOOK HERE ON ONE THING QUICKLY.
[00:03:15.360]Jim Jansen: And
[00:03:16.920]Jim Jansen: The link that Alan has right there is actually for the to register for the meeting and the handouts are actually found at the farm W and l.edu backslash LTC our
[00:03:32.040]Jim Jansen: This link will be sent out to everyone. Once this meeting has been recorded, so stay tuned. If you do your thing. And we'll be more than happy. So let me just take this in here.
[00:03:50.280]Jim Jansen: So Alan has the link posted in there to this is just a shortcut to that link. So I'll keep an eye on the chat. You want to visit one on one with any of us. We're more than happy to do it so
[00:04:00.510]Jim Jansen: The name of our program to Sears effective budgeting negotiations and management strategies for agricultural land.
[00:04:07.140]Jim Jansen: Think about the events of the last year or two. There's been a lot of things going on. And depending upon where you're at in the state.
[00:04:13.230]Jim Jansen: There have been different kinds of disaster related to the land there in western Nebraska. It was on the topic of
[00:04:19.800]Jim Jansen: Limits and irrigation water and other years. It may be things like drought or hail and eastern and central Nebraska was a little bit more uncluttered
[00:04:28.650]Jim Jansen: That's a little bit of our motivation on how do we effectively deal with that when it comes to lease arrangements, regardless of your landlord or attendant. So that's our goal of our series today.
[00:04:39.990]Jim Jansen: Just we have to where I was supposed to throw this up there.
[00:04:43.680]Jim Jansen: Our program today was paid for by grant that was sponsored through the North Central extension risk management education center which is funded by the USDA. So please consider making out the survey.
[00:04:55.410]Jim Jansen: We will also email that with the handout materials. So please consider making that out if you can
[00:05:03.270]Jim Jansen: Alright, so the first part today is a lot of folks have questions on topics related to land values and cash receipts.
[00:05:09.720]Jim Jansen: Related to the topic, the land values and cash rents, I believe the annual survey on this topic. So we'll try to give you a pretty good taste of where land rights have been in 2020
[00:05:19.800]Jim Jansen: There's a lot of questions surrounding where they going in 2021 for many of our economy crops grown throughout Nebraska, including the Panhandle things like corn.
[00:05:30.300]Jim Jansen: The central and eastern part of the state soybeans are a little bit more of a concern, but at prices appear to be much better than they were, say, six months ago. So how do we set an equitable cash revelry, I'll give some ideas today on how do we work through those numbers.
[00:05:48.570]Jim Jansen: A little bit on the Nebraska farm real estate survey report. You may have noticed Jessica is does really nice job kind of putting together a little plugin or papers and local news media about what happens to land values and Western Nebraska.
[00:06:01.710]Jim Jansen: And some of those news releases are based off the market brass prime real estate market survey and record this survey has been conducted since 1978
[00:06:12.000]Jim Jansen: Includes people like professional farm range management companies agricultural bankers and people engaged in the ag industry people have first hand knowledge of what's occurring.
[00:06:23.310]Jim Jansen: We do two different things. The luminary estimates are published the second week of March, that's on my to do list today is to start getting the 2021 survey complete
[00:06:33.450]Jim Jansen: And we'll get that sent out and get everything summarized by about the second week of March in the final report, it's going to be published in the final report has additional detail beyond
[00:06:45.960]Jim Jansen: Basics of bland values and cash trends, things like what percent of land in Nebraska is
[00:06:53.820]Jim Jansen: Finance via contract for deed or mortgage or a cash sale all this information can be found at a time that human l.edu backslash real estate, so be sure to take a look at it there.
[00:07:08.370]Jim Jansen: Okay. And also I will note. Many local Extension office's if you think if you're on the computer. Today you can probably find it, but
[00:07:15.630]Jim Jansen: You don't want a paper handout. Many of the local Extension office's you can stop by and they can print out a few pages or they might have it on their Rolodex of things.
[00:07:27.240]Jim Jansen: All right, a little bit on our report today's presentation we're kind of focusing a little bit more on the Panhandle and matters related to the Panhandle maybe a little bit more emphasis emphasis on things like grazing land.
[00:07:39.930]Jim Jansen: You see the Northwest district basically encompasses the western half the Panhandle there may be some folks on the call today that have properties say either in the southwest district or the North district and when it comes to those areas. You'll note that
[00:08:00.090]Jim Jansen: See here.
[00:08:02.850]Jim Jansen: There we go, the Southwest district is right here in the north district is up here.
[00:08:07.680]Jim Jansen: Information is summarized by these regions. This is how we've done it historically these regions shared a similar share similar production attributes expectations for rainfall different types of soil degree as slow
[00:08:22.050]Jim Jansen: As typical yield for their area, things of that nature. So I'll try to be talking about examples today that relate to northwest or Brasco
[00:08:35.010]Jim Jansen: Right here we are.
[00:08:37.290]Jim Jansen: And you're going to notice if you do have a copy of the paper handout in front of you. We're going to skip over quite a bit of the land values. Just be know
[00:08:45.060]Jim Jansen: That related to land values from the brass formula state survey and report the market value when we estimated size as a February 1 of the current year compared to February 1 to the prior year. So we're going to be estimating it again here, February 1
[00:09:04.890]Jim Jansen: You'll note when we asked me to this value in February 1 2020. This was kind of right before Kobe hit and pandemic and things that nature.
[00:09:14.340]Jim Jansen: What did you notice Western Nebraska southwest and Brasco we notice either a small increase very small increase or a very small increase eastern part of the state, you notice a little bit higher increase three to 5% or not noticing a lot of changes. I would probably
[00:09:32.880]Jim Jansen: Part of say that
[00:09:36.210]Jim Jansen: The markets are fairly steady now.
[00:09:39.990]Jim Jansen: I think that's going to be a different value on that. I think they're probably going to be stronger. I'd say that for two reasons.
[00:09:46.410]Jim Jansen: One outlook on commodity prices appears to be better and to long term real estate loans are extremely low. I just noticed yesterday, and I'm not endorsing this company, but the
[00:10:02.040]Jim Jansen: FB n farmers Business Network, I noticed an advertisement. They had where they listed. You can get a 15 year mortgage right now I'm land for 2.95%
[00:10:12.540]Jim Jansen: And you can get a 30 year mortgage for three and a half percent extremely low. So the lowest rates, we've seen in recent history. So that's a positive force, leading to the value
[00:10:24.810]Jim Jansen: And the overall value in the standard brassicas about 20 $700 an acre that's up just slightly over the prior year.
[00:10:32.220]Jim Jansen: And if you took a historic look back at kind of where have land values been going, we have this slide right here. The Blues line, it starts in 1978 to 2020
[00:10:44.850]Jim Jansen: That blue line represents the average value of land and we did not adjusted for inflation, just keep this simple
[00:10:51.810]Jim Jansen: But it does go to show we had a period in 2011 1213 that we said record crisis. Since then, we've been on the decline. And we noted a small increase last year again.
[00:11:03.000]Jim Jansen: Relative to that we noticed the price of corn prices corn set some of the highest prices, we've ever seen in around 2000 late 2011 12,000,013 a little bit, but then it has subsided, so
[00:11:15.570]Jim Jansen: There's a relationship between what we can earn with something relative to the asset value. So, if we see things increasing that probably is, in fact, right there.
[00:11:25.980]Jim Jansen: Now, the other thing, the other part of this and this will be on the next slide or interest rate. So, it is quoted some rays to
[00:11:32.730]Jim Jansen: With the thing I'm trying to look at right here is we have the average marketing your average marketing your average price of corn or the marketing your average price of corn.
[00:11:44.040]Jim Jansen: And what I put on this slide was our expectations for the value of corn per bushel. Hey, then this was for 2020
[00:11:53.130]Jim Jansen: They fluctuated a lot when I did the survey or put a value on here. That was pretty close to $3 when I put these slides together in November. We had a value on here that was closer to $4
[00:12:05.160]Jim Jansen: And if you did this redid this slide today price stick that will line up around four and a half or so.
[00:12:11.460]Jim Jansen: There's been a lot of fluctuation in the markets because of Cogan and with that there's been a lot of different things changing
[00:12:23.760]Jim Jansen: Okay, here we go. So now we have the other thing they influences land values is our interest rates.
[00:12:30.270]Jim Jansen: I quoted to you from that website. I've seen an advertisement on. And there's different places you can contact or probably find information.
[00:12:37.620]Jim Jansen: Interest rates for the 10 year Treasury yield rate, which we don't borrow money using the 10 year Treasury yield little rate, but it does relate to the funding source where different institutions get money to make landlords
[00:12:52.950]Jim Jansen: It's just been a continued to climb through the 90s and the 2000s and in recent years. It's just, you know,
[00:13:00.300]Jim Jansen: Really tapered off. Now, the Federal Reserve lowered interest rates to help keep the economy stabilized, but that inverse relationship between interest rates and land values starts to develop
[00:13:13.590]Jim Jansen: And that's one reason why I think land values will be continuing to be higher, unless we see a substantial change and interest rate policy is because we've seen some very low interest rates.
[00:13:25.440]Jim Jansen: Now these values. I'm talking about here are related to the market value of land relative to the market value of land. We also have a thing called the assessed value, the value that's defined by the State of Nebraska, blah. This blonde dictates how our assessments work.
[00:13:42.510]Jim Jansen: When it comes to property taxes agricultural taxes are based off a three year median Eglin value. So you look back over the say the last three years.
[00:13:53.880]Jim Jansen: Probably got a notice in the mail here in the last couple of weeks at your when your assessments going to be do twice over the coming year here.
[00:14:00.450]Jim Jansen: If you're looking back at say the last three years of land values, there may be a disconnect between where the last three years of values are
[00:14:09.030]Jim Jansen: Relative to where the current market value might be that's been one issue we've had was property taxes land owner space. Now the other thing to know is there was something passed for a small degree of property tax relief.
[00:14:25.080]Jim Jansen: And it's a state level income tax credit. Okay. It's not a federal but a state of Nebraska income tax credit, and I know people have
[00:14:39.690]Jim Jansen: Various views on how they're funding this relief can, it's basically going to be funded through the casino ballot initiative that was formed and through this initiative.
[00:14:51.240]Jim Jansen: Basically what it boils down to is there's a set of money there's money set aside by the legislature that over time, there will be a small income tax credit on your state of Nebraska income tax form.
[00:15:03.960]Jim Jansen: That will be used to help provide are provided degree of offset of your taxes, your property taxes and this relates if you own a home or agricultural land anywhere in the State of Nebraska.
[00:15:17.310]Jim Jansen: How this is being funded is through the ballot initiative that past 70% of the casino taxation revenue is going to be used towards funding this
[00:15:27.870]Jim Jansen: And this tax credit is supposed to grow over time. We'll see what happens on that point. But according to the article that was the Lincoln journal star on August 14
[00:15:37.860]Jim Jansen: That the amount of money is supposed to grow over the next, say, five to six years.
[00:15:44.820]Jim Jansen: Little bit. Like I said, I know this is an area that people at various views on but there were three initiatives on the ballot.
[00:15:52.920]Jim Jansen: Or I think there was for this past election, but three of them that relate to property taxes is gambling.
[00:15:58.500]Jim Jansen: And with this gambling, they're going to allow gambling at facilities that are term this horse race track facilities and with that there was
[00:16:07.500]Jim Jansen: passed around 65 or 66% but one of the initiatives defined where a fair chunk of the the taxation monies are generated goes that goes towards property tax relief.
[00:16:21.630]Jim Jansen: So that is one thing that I've given this talk, many times over the years. That is the first time we've ever actually seen some degree leave believe people ask where is the money coming from. It's coming from where that we know this right here. Okay.
[00:16:40.590]Jim Jansen: All right. And the other thing that we have is what is influencing land value beyond some of these things that I noticed or noted
[00:16:48.210]Jim Jansen: Well, when when the people that took our survey answered this question. There's a few things. If you see on this chart right here. If the charges in a blue area here. They expect land values to actually be declining
[00:17:01.260]Jim Jansen: If they're on the right hand side of this chart. They're actually expecting them to be increasing.
[00:17:06.270]Jim Jansen: Depending upon where they're at on this that really influences. Some of these policies are related to that.
[00:17:12.540]Jim Jansen: There's been a lot of concern when the survey was done on crop prices tax policy future tax policy. Hopefully we've seen some degree relief there.
[00:17:22.920]Jim Jansen: Things are racing land values are leading to higher land values interest rates and the 1031 tax exchange. So this is kind of a set of things. If you'd like to take a look at it.
[00:17:36.480]Jim Jansen: I would say probably this one should have been higher on the list, but I don't know if anybody had anticipated seeing the degree
[00:17:44.310]Jim Jansen: Payments as they did.
[00:17:47.100]Jim Jansen: So, all right.
[00:17:50.010]Jim Jansen: Greetings step into Catherine's here.
[00:17:53.100]Jim Jansen: For the 2020 season we're going to kind of start at the regional level work our way down to the county level and then work our way down to the farm level in the 2020 season. We had an average rate of $20 an acre, which was a slight increase in the hand panhandle of about 2% and acre
[00:18:12.180]Jim Jansen: And we also have a range on cash rents from say 23 up to 39 acre and this represents an average of the lower third grade or the low grade and an average of the high third grade or the hydrate.
[00:18:27.570]Jim Jansen: What I mean by the average of low third grade or the average of the high third grade.
[00:18:32.520]Jim Jansen: If you took all the responses for the Panhandle and asked everyone. What do you estimate the average third of cash, friend, is that is represented as $23 an acre.
[00:18:44.100]Jim Jansen: If you ask a question. What do you estimate the upper 30 Catherine is for dryland cropland in 2020 that is $39 an acre and all the other numbers filtering there.
[00:18:54.960]Jim Jansen: Once again, these slides will be sent to you and you can access them online and you can hopefully get them out of your mailbox in a few days. If you haven't already got it.
[00:19:06.510]Jim Jansen: Okay.
[00:19:09.720]Jim Jansen: In addition to the University of Nebraska another survey that's done on cash friend has done by what is referred to as the National Agricultural Statistics Service or Nass
[00:19:21.480]Jim Jansen: If you're a former operator farmer rancher or something of that nature, you maybe have gotten one of their surveys in the past, they asked different questions related to our Academy me on number of cattle you feed or even the
[00:19:37.200]Jim Jansen: What your intended planning what your crops you have all these things, USDA survey and cash rent is typically done an odd number of years, but they did happen to do it in 2020
[00:19:48.030]Jim Jansen: Their information comes out late. Late in the growing season, much later than the university Nebraska does they conduct their survey actual farmers and ranchers.
[00:19:58.170]Jim Jansen: And their information can be found at this link right here and addition on their website, you can find other things related to
[00:20:06.630]Jim Jansen: land values cash friends things that patriot.
[00:20:13.980]Jim Jansen: Now their survey is not done at a regional level, but it's done at a county level and once again.
[00:20:21.270]Jim Jansen: The University of Nebraska does not have anything to do with this specific publication. This is done by the USGA
[00:20:28.050]Jim Jansen: What I will say is our information will be updated first in 2021 and you might be able to gain some insight on how cash rents very around out in the Panhandle
[00:20:40.500]Jim Jansen: You'll notice if you want a property in the north district. There's a lot of counties there that are in white. Why is
[00:20:47.580]Jim Jansen: Either they couldn't get enough people to respond or they're simply, you know, in the heart of the sand hills. There's not a dry lot of dry land cropland. It's a lot of sub irrigated metals grazing land and maybe some irrigated cropland.
[00:21:00.660]Jim Jansen: What we can get some ideas that you know when you look at regional Caltrans. It looks like Scott's bluff county appears to be on the higher end along with garden County.
[00:21:09.870]Jim Jansen: And then other counties in the area clearly no se gospel UP HERE IN THE LOW 20s. And if you go north, you can get maybe into that high 20s to mid 30s area. So it kind of gives you some ideas on how cash rents very around in this area and it looks like that Platte Valley court or
[00:21:29.340]Jim Jansen: You know, kind of has some higher cash friends, we tend to see also in southwestern Brasco you get more into that 50 mid 40s to the say the high high 50s or even most 60s.
[00:21:46.110]Jim Jansen: Okay, move over here. And when you get the handout, you're going to see it's a booklet. If you want to see these numbers in there.
[00:21:54.150]Jim Jansen: Take the booklet and look back in the appendix actually put these on a full sheet of paper back there. So you can see them much easier than having to try to find it on an individual slide or something of that nature. Okay.
[00:22:08.190]Jim Jansen: All right on the topic of irrigated cropland. I'll run through the numbers and go Jessica likes to make a few comments here so we'll have her
[00:22:16.110]Jim Jansen: Get on if she wants to once they get through them. I gravity irrigated or flooded area cropland is clearly a land class of this President polian Hill or in the seasoning the Panhandle given the lamb features out there in the irrigation districts that are present.
[00:22:32.100]Jim Jansen: Northwestern Brasco reported an average of 105 acre other areas here in the 150s to 117 notice we noticed a slight decline in the Panhandle relative to other areas of the state.
[00:22:46.260]Jim Jansen: I have a concern concern on some of the properties are being rented for specialty crop production. This past year, I think things might be a little bit more stable out there what they were.
[00:22:55.530]Jim Jansen: But based on the survey responses. There were some concerns indicated in the survey based on the responses that were coming in.
[00:23:05.010]Jim Jansen: Their range on irrigated cash rents for gravity or flood irrigation reflect from at up to 130 and then the Southwest, we got from 125 to 190 and then the north from 125 to 200
[00:23:22.380]Jim Jansen: These averages assume that the landlord owns irrigation system you have a tenant providing a component, say like the power unit.
[00:23:31.320]Jim Jansen: You might take some off the cash rent reflect the fact that they have a here. Yeah, you know, diesel engine or something out there that's worth so much an acre to have something like that. So just be aware of that.
[00:23:45.870]Jim Jansen: Run through the center pivot and then I'll have Jessica once make some comments loud for makes them on the center pivot rates these rates assume that the landlord owns the entire system.
[00:23:56.520]Jim Jansen: The pivot the pump and the power unit. If you do not own one of those components as a landlord or if as a tenant, you are providing one of those components you would discount the cash rent reflect that.
[00:24:09.720]Jim Jansen: We have a cornhusker economics in the back here handout that talks specifically on this issue.
[00:24:16.620]Jim Jansen: The breakout on cash friends fluctuate from that little one hundreds of the mid to high
[00:24:24.000]Jim Jansen: Being a little bit more into the 200 range in the north, that probably primarily be in the eastern part over here, we tend to see the higher cash friends there. And then in the southwest from that mid one 16th or so up to 200
[00:24:39.090]Jim Jansen: The other thing to note on the USDA rates that are reported they do not distinguish the difference between center pivot and flood or grabbing your game grades. So if you have an area.
[00:24:52.650]Jim Jansen: Where you know Scott's bluff County and I don't know what percent of land in that county is gravity or flood irrigated relative to center pivot.
[00:25:00.390]Jim Jansen: The average a report there is going to reflect hope weighted average that combines both the center pivot with trends, a little bit higher, and the gravity or flood irrigation, which tends to run for a little bit, or a little bit less.
[00:25:14.520]Jim Jansen: Jessica. Do you have any comments you want to make on the center pivot.
[00:25:19.650]Jim Jansen: Or no worries.
[00:25:21.210]Jessica Groskopf: Yeah, so just remember that the actually the bulk of land in our areas is actually crop share rented.
[00:25:30.690]Jessica Groskopf: So when we look at these cash rental rates, whether they're from you. And now, or they're from USDA. First is that we have to remember that usually these are specialty crops either sugar beets or potatoes that are garnering cash rent. We are seeing more folks move towards cash rent.
[00:25:49.020]Jessica Groskopf: But especially when I look at those.
[00:25:53.280]Jessica Groskopf: counties that are higher. Not only are they center pivot heavier center pivot counties, but they're also heavier in the specialty crops as well box Butte County. Again, very heavy when it comes to center pivot and then also on the specialty crop side so
[00:26:11.430]Jessica Groskopf: What I like to do is look at both of them. Remember the surveys are to get you into the ballpark. They're not written in stone.
[00:26:18.660]Jessica Groskopf: They are not the end all be all of what cash rent is actually going for. They get you into a range and then you need to talk about the age of the equipment, the quality of the ground.
[00:26:29.040]Jessica Groskopf: The accessibility of water, those kinds of things. One thing I will say this year that I'm looking at in 2021 is the lack of snowfall in Colorado and Wyoming and the potential
[00:26:43.350]Jessica Groskopf: For some shortages of surface water specifically for
[00:26:50.730]Jessica Groskopf: That gravity irrigation. But remember, just because you you see a center pivot that doesn't necessarily mean that it's groundwater.
[00:26:58.140]Jessica Groskopf: It could be surface water that's being pumped into that a bit. So those are a few things that I'm thinking about as I look at these surveys and as I looked at 2021 when it comes to cash rental rates.
[00:27:10.500]Jim Jansen: Jessica who pays say here in an irrigation district where you have a fee is assessed to the land case for that.
[00:27:19.440]Jim Jansen: The tenant.
[00:27:20.370]Jessica Groskopf: Landlords that so the landlord pays that fee. So if you're in a crop share agreement that that expenses 100% to the land, Lord, if you're in a if you're in a cash rent. That's kind of built into the Kashrut experience.
[00:27:38.130]Jim Jansen: Very good.
[00:27:40.860]Jim Jansen: Okay, I will keep moving here for the sake of time will have glass get started here and give you a few ideas on how to figure actual cash rents to so I'll just move
[00:27:50.820]Jim Jansen: The no cookie cutters thing. And I will say based on my call volume to
[00:27:55.290]Jim Jansen: Crop sure or much more prevalent in the Panhandle than they are. And say the eastern part of the state, especially on some of the dry land properties that you're raising small greens or something of that nature. So, all right.
[00:28:09.420]Jim Jansen: Switching over here briefly on cow calf care rental rates as well as grazing land, the USDA reports a per acre average per grazing land. So this is for one acre
[00:28:24.120]Jim Jansen: And the rates in the Panhandle your fluctuating crusade tend to the mid teens, give or take a few dollars Eastern privacy is a lot different. But you get into the southwest and North Central corridors there we tend to see something closer to the mid teens or even the low 20s.
[00:28:44.310]Jim Jansen: And the university Nebraska also reports or per acre average but grazing land arranged land in Nebraska these rates are really hard to
[00:28:53.790]Jim Jansen: fathom because there's so much diversity in terms of the landscape that we have out there, how rough. Is it how good the grass panhandle is a very geographically sensitive area that they have some different types of grass and the rental rates by reflects the most features.
[00:29:11.610]Jim Jansen: The rate that I tend to see a little bit heroin just seems like it's a little bit more popular.
[00:29:16.890]Jim Jansen: And I know this is very prevalent depending on where you're at, is when we talk about cow calf pair rental rates. So if we're saying for one cow for one calf for one month during the summer grazing season.
[00:29:29.820]Jim Jansen: We're talking a rate of about 3037 or $38 a pair. And if you're talking for a traditionally say at five months grazing season.
[00:29:39.510]Jim Jansen: You were times that by five. So say for example you're in southwestern brassica where the rate is basically $50 a pair, if you took 50 times five. That'd be about 250 and that would be for one crazy season.
[00:29:56.100]Jim Jansen: And in addition to the average we have a pretty good range, the big things that we talked about grazing land, who is responsible for maintaining fencing we control.
[00:30:08.940]Jim Jansen: You have any electrical hookups for pumping water who's paying that bill any bar brush. We control who's paying for the herbicide on that.
[00:30:18.360]Jim Jansen: There is no respond is probably the party that's willing to do it. And I would encourage you if your landlord having a tenant do some of those things.
[00:30:25.620]Jim Jansen: fully recognize their time and investment and herbicides or not achieved great grassland or whatever. Slip the selective herbicide and you're using to control weeds or something of that nature. Just want to make a comment on here to good
[00:30:40.650]Jessica Groskopf: So I will say that phone calls coming to my office I have heard rates in the Northwest region that are probably closer to those being shown in the North region.
[00:30:52.620]Jessica Groskopf: Again, the surveys, get us in the ballpark and we have to ask the question that that Jim just post. What else is being provided as a service related to that higher rental rate, are they coming in, just dropping cows.
[00:31:07.860]Jessica Groskopf: What is, what is the carrying capacity of that ground. The other thing we get a lot of questions are related to corn stock rental rates.
[00:31:19.500]Jessica Groskopf: And we actually don't have a solid survey on that value. I can give you a typical that I hear, but I'm always interested hear what others are charging or are receiving for those rental rates, but we don't actually have a survey that that quantifies corn stock rental rates.
[00:31:42.390]Jessica Groskopf: At this time,
[00:31:43.980]Jim Jansen: So the three surveys that I've seen conducted in the state or county level cash run surveys on
[00:31:50.670]Jim Jansen: Corn stock raising the kind of money either in the southwest or the Central District. I don't have anything to do with them.
[00:31:57.210]Jim Jansen: The rates for corn stocks are either charged on a per acre or per head per day rate and it completely relates to how in this is an area, and we'll talk on his
[00:32:09.030]Jim Jansen: Talk about but you know how many acres of corn, do you have in the area, relative to the number of cattle and the higher rates, I would say reflect cases where
[00:32:18.540]Jim Jansen: The grazing land cases where people, they may not be take quote unquote taking Katelyn.
[00:32:25.080]Jim Jansen: But they may be doing a lot of little services. Maybe they're retired landowner that they don't want to be Captain cows out anymore, but they will keep an eye on the cattle or they do take care of the fence and the means and whatever else that goes with it.
[00:32:39.750]Jim Jansen: Okay. All right. So wrap this all together and then we'll get started here briefly.
[00:32:48.870]Jim Jansen: couple ideas on setting Catherine's land is an investment and every investment has a return, whether positive or negative is another thing, but on land, we'd hope it would be positive. So how do we figure out cash runs from that I got three different ideas. We have some survey information.
[00:33:07.440]Jim Jansen: There's an idea that if you are on props here, but you're considering going to cash rent. I feel this is a very equitable way to figure things out.
[00:33:17.220]Jim Jansen: And then the third ideas return on investment rate of return right now is very low or low risk investments, right. So that being said, it's not return, return on land right now is not $10 10% a year is, you know, just several percent to 3% depending on where you're at.
[00:33:37.980]Jim Jansen: Okay, first thing here. If you take in some of our information on county level cache rental rates. And this is just for a made up example say maybe this is a
[00:33:49.500]Jim Jansen: Gravity irrigated partial around the yield would probably be a little bit higher is irrigated, but in eastern Nebraska, this might be an example, you'd see
[00:33:57.870]Jim Jansen: If you know what the regional cash rent is say 135 acre and you know what the average county Cornelius say 120 bushel per acre.
[00:34:07.470]Jim Jansen: If you take the average county rental rate divided by the average yield you get what is called the county rent per bushel so 135 divided by 120 is $1 13 and Bush and
[00:34:21.390]Jim Jansen: What that says is on rented ground in this paid up example for our certain county $1 13 of the sales price for every bushel of green sold off this ground for corn is going towards what
[00:34:35.190]Jim Jansen: going towards paying the rent. So if you take that dollar 13 emotional and slide it to this upper corner here and you take it times the average yield.
[00:34:44.790]Jim Jansen: The average yield is called from crop insurance, you might talk about the actual production history or the pH yield. So the county rent per ocean county rent per bushel times a pH yield you get an estimate for what an estimate for your farm level cache wouldn't
[00:35:03.660]Jim Jansen: Take which you know
[00:35:05.850]Jim Jansen: Take what you know on a parcel grounds, what does my ground individually yield relative to the county and multiply it there, you end up with the one one estimate for cash rent.
[00:35:17.070]Jim Jansen: If this number was more than 120 this final rent would be more than 135 and a thinker, it's less than 120 it's going to be less than 135
[00:35:31.410]Jim Jansen: All right, here's an example that might be a little bit more interesting out in your country. So we have a case here.
[00:35:38.400]Jim Jansen: Yeah, let's say you have a property that's raising 160 bushel per acre corn and can use wheat. You can use whatever crappy raise
[00:35:48.300]Jim Jansen: And if you're on a 5050 split, I would feel feel fairly confident saying on a 5050 split the landlord would probably be paying half of the seed fertilizer and chemical expenses.
[00:36:01.230]Jim Jansen: And if they're getting half the crop say last March, you might have sat down and you said, Okay, if I'm getting at bushel per acre. I think a reasonable number to put in there for the price of corn maybe about three and a half bushels or excuse me, three and a half dollars per bushel.
[00:36:16.650]Jim Jansen: So my income as a landlord or my landlords income if I'm a tenant, looking at this deal, they'd be getting about 280 an acre.
[00:36:27.000]Jim Jansen: And if you have, if you take off half of the seed fertilizer and chemical expenses, which is about 155 and anchor.
[00:36:35.310]Jim Jansen: Speed up example. This is a number. You can find from some greenish McClure's crap budgeting material. The difference between the income minus the expense. What is that
[00:36:46.800]Jim Jansen: The last one I would intend to make as a lamb board right so if I had a tenant or if I as a tenant want to walk up to my landlord and say, Hey, I'm willing to offer you so many dollars an acre. Is it a good deal.
[00:36:58.680]Jim Jansen: You know, if they're offering you around 120 an acre and you don't have to participate in this crop share, it's a lot less risk as a landlord.
[00:37:07.590]Jim Jansen: The but I will throw in there. And the reason it's so hard to set cash rent one commodity prices are bouncing around so much do we could have played different scenarios last July.
[00:37:19.230]Jim Jansen: And this is just an estimate amateur is higher or lower wherever you're located at today. Well, let's just say it was about $3 emotional
[00:37:27.900]Jim Jansen: Well, if the price of corn relative to my inputs. You know when you acquire your inputs you put the fertilizer out, put the pre merge and standing by the seat corn.
[00:37:37.560]Jim Jansen: You don't really fluctuate that once that stuff is locked down you can maybe fluctuate, how much you're going to spray for herbicides, but most people usually have a plan. And that's what they're going to carry forward with the price of corn in this case.
[00:37:49.950]Jim Jansen: You know if you would have signed that crop share lease or that cashless arrangement July and numbers a lot different than in March, and once again, if you would have re of assess that and say, November.
[00:38:05.250]Jim Jansen: Instead of being 310 a bushel. It was 390. So what should have the cash rent been in this scenario.
[00:38:12.450]Jim Jansen: Well, probably the midpoint between the two of those seems a little bit more reasonable maybe shouldn't be the lowest and maybe shouldn't be the highest
[00:38:19.770]Jim Jansen: But it just goes to show you there's a lot of differences on how you can figure out cash read. So if you are on a crop chair. This is one way
[00:38:29.160]Jim Jansen: That you could consider taking that and switching it to more of a cash rent that would be of interest or if you're trying to make an offer on a cafe.
[00:38:39.960]Jim Jansen: And another idea if you have our property where you have hey land.
[00:38:45.240]Jim Jansen: You can do instead of crop chair. You can do a. Hey, Sherry equivalent
[00:38:50.430]Jim Jansen: Okay, let's say this property yielded two and a half ton an acre field at two and a half ton of an acre and I'm on a one third. Two third split, I would get a third of the, hey, I'm saying thinking it's worth about at a ton.
[00:39:05.730]Jim Jansen: And I'm not going to pay any of those expenses on a one third. Two third pay split, you can make 66 bucks an acre.
[00:39:13.860]Jim Jansen: Now what this would say was, is if the, if you have no desire to win that hey, your tenant could say, hey,
[00:39:21.240]Jim Jansen: After putting up the hate and figuring out what it's worth going to give you $66 an acre and Cashin, is that a good deal.
[00:39:28.290]Jim Jansen: Well, if you were on a crop share and you took ownership of that hain tried to sell it in roughly make around that amount.
[00:39:35.070]Jim Jansen: Other deal. Maybe you're getting two and a half tons an acre of grass, maybe you just want to throw out some nitrogen on it under this case, maybe you're paying half of the fertilizer expense.
[00:39:46.560]Jim Jansen: That that's an expense that you can divide between the two parties, you can split right down the middle.
[00:39:52.890]Jim Jansen: 20 bucks of nitrogen out on some grass and the yield would be a little bit higher in western Nebraska. But the idea is still carries forward. It's another way
[00:40:01.530]Jim Jansen: To set cash rents. Now, maybe this would be alfalfa any of these fields would be more practical. If you had, say irrigated alfalfa or something of that nature.
[00:40:14.130]Jim Jansen: The final idea on how to set Caltrans is return on investment every investment is return has a return
[00:40:21.360]Jim Jansen: And Western Nebraska, you know, some of these numbers we have up there for the rate of return on Riley and cropland maybe irrigated cropland.
[00:40:28.440]Jim Jansen: dryland cropland. You're probably going to be a little bit closer to the tomb for side and then that irrigated cropland. You're going to be a little bit more on the higher side of it.
[00:40:37.920]Jim Jansen: And now the land values in your country are considerably different than this, but the idea is, if you know what your acid is worth being multiplied by a rate of return.
[00:40:48.780]Jim Jansen: It can give you some ideas on some rough cash rents just another idea, but I really do like the prior two examples on and share equivalent that these two ideas.
[00:41:01.680]Jim Jansen: I do think this is a good negotiating point for a landlord or attended because he really does reflect what is the greatest challenge we're facing right now price without a doubt volatility and that is a big deal.
[00:41:17.160]Jim Jansen: Okay, and pull on us all together and we're going to get this queued up for lent us here in a minute or two. First thing, if you have at least where he had an irrigation system.
[00:41:26.610]Jim Jansen: Who is responsible for maintaining that we asked this question in our, in our survey back in 2018 half the time. It's the landlord and the tenant third of the time the tenant is takes care of all the upkeep and the remainder of the time it's either the landlord or some other entity.
[00:41:47.760]Jim Jansen: If you're a case where you know the tenant owns dependent on a property, but the landlord owns the well in the irrigation system. How much would you take off the cash rent to account for that.
[00:41:59.340]Jim Jansen: What I mean by that is if the landlord doesn't own the pivot. They don't have to pay the insurance and upkeep on it, he would take that off the cash rent live you're looking at some of the university Nebraska numbers.
[00:42:12.090]Jim Jansen: From that, what we see is, you know, about two thirds of the time that discount somewhere around 26 to 50 and about a third of the time it's somewhere around 10 to 25 and a lot of numbers reported to us somewhere in that 20 to $30 an acre range.
[00:42:33.060]Jim Jansen: And if you have a tenant that brings the power unit. So you could have a say a diesel engine and propane or natural gas or even electric motor. How much do you take off the cash ran at the tenant go inside.
[00:42:47.070]Jim Jansen: Predominantly is take us somewhere between say 10 to 20 bucks an acre in practical terms is somewhere around 10 to 12 bucks an acre of the tenants one that's going to provide that engine. I'm over
[00:43:02.430]Jim Jansen: And the final deal. I know flooding is a little bit different deal out in your country to skim the lay of the land in the typical climate.
[00:43:09.750]Jim Jansen: But does your lease have the challenge. I'll point out, does your least have a provision in there to account for disaster.
[00:43:17.400]Jim Jansen: A disaster experienced in western Nebraska and I did get a little bit worrying pull a new typically did if you lose irrigation water because of a
[00:43:26.010]Jim Jansen: An event happening in the irrigation system, what we found when we asked this question was a majority of leases, do not have very good provisions in there to account for things like
[00:43:37.260]Jim Jansen: Loss of water flooding in the case of range line maybe fire. Do they have those provisions.
[00:43:45.300]Jim Jansen: And
[00:43:49.200]Jim Jansen: For those people that suffered extensive prevent plant did the lease making the adjustments to the cafe and because of that.
[00:43:57.180]Jim Jansen: Predominantly, there were not any you know either very small adjustments, where they reduce the rent or the manual adjustments. Now, if you were on a crop chair and you had
[00:44:07.530]Jim Jansen: crop insurance as a landlord and the tenant under that case, you would receive prevent plant crop insurance and remedies. So I thought that was flip
[00:44:19.680]Jim Jansen: And finally here.
[00:44:23.250]Jim Jansen: Did you add any provisions to account for flooding in. And once again, if you're in the Panhandle and you're not concerned about flooding. Are you concerned about flyer and concerned about hail.
[00:44:33.630]Jim Jansen: Encourage you to consider and this this question for 2020 was did you update it. We did found a lot of people didn't really update their leases.
[00:44:42.930]Jim Jansen: And if you are on a crop sharecroppers here would actually take account for that.
[00:44:47.490]Jim Jansen: But once again, I encourage you to think about risk and this is kind of the motivation for Alan and Austin's talk on talking about disasters disasters can be a tornado. They can be anything.
[00:44:58.380]Jim Jansen: And just be aware of what they are and what do they mean in terms of compensation paid by the little antenna to the landlord or whatever the case is.
[00:45:09.150]Jim Jansen: Finally, if you don't have your lease in writing.
[00:45:12.090]Jim Jansen: Good free resource for ELISA's egg least 101 dot org egg least 101 dot org. It's great place. You can find free film The Forum PDF Lisa's regardless of the type of police are involved with
[00:45:25.890]Jim Jansen: grazing land crop share Cashman cropland, whatever it might be. And the final thing, something if you do like this kind of information we're going over today.
[00:45:37.410]Jim Jansen: I don't deny myself. We host a webinar. It's called a gland management orderly it's held each business quarter of the year. The next one we have coming up in February 15 12 O'clock Central time not
[00:45:53.160]Jim Jansen: To not panhandled time with 12 O'clock Central Standard Time. And we're going to be talking a little bit more on 2021 Catherine's and looking a little bit more at that price dimensional risk. How do you truly account for that website, you can find it is egg least 101 dot org and
[00:46:13.980]Jim Jansen: Last time on there too, that you can submit questions. So with that, we got anything, any questions, I'm not seeing anything in the chat.
[00:46:25.710]Jim Jansen: Jane Jessica pointed us when good things. Do you have anything else you wanted to add on that, Jessica. Before we switch over the bonuses material.
[00:46:35.340]Jessica Groskopf: Again, if you want to have a conversation. Jim and myself are always available to answer lease especially cash or crop share related questions.
[00:46:47.520]Jessica Groskopf: As like
[00:46:53.040]Jim Jansen: Okay. Looks like we got a pretty good group on here. It's good.
[00:47:01.170]Jim Jansen: Okay, with that, I'm going to unless there's anything else. I'm not seeing anything. And once again, you can call me after meetings over today. Mr. Whatever be one.
[00:47:10.890]Jim Jansen: Man stop sharing, now we're going to switch control over to gladness, and she's actually going to share her slide. So, so with that Glynis
[00:47:21.930]Glennis McClure: Okay.
[00:47:26.760]Glennis McClure: Trying to get my name come up
[00:47:30.570]Glennis McClure: Are you seeing my slides now. Yeah.
[00:47:33.420]Jim Jansen: You look great on is good.
[00:47:35.700]Glennis McClure: Great, thank you. Thank you. And thanks, Jessica for hosting I guess it'd be great if
[00:47:43.980]Glennis McClure: I'm just kind of curious as to most of you are from the Panhandle area. If we had other folks that joined us from different parts of the state. Next, that's fine. Just wish we could all see you in person. This has been
[00:47:55.920]Glennis McClure: Kind of a long haul. And we don't know how much longer will be before
[00:48:00.180]Glennis McClure: You know some things get better with this pandemic, so
[00:48:03.750]Glennis McClure: Anyway, I'm Glynis mclemore I'm an extension educator, I'm located on campus in Lincoln actually Alvin Alec and I. Our next door neighbors there on campus that we've been working a lot from home.
[00:48:16.590]Glennis McClure: And I guess that works okay as long as we can do these kinds of meetings on virtually. So again, appreciate you joining us, be sure to let us know where
[00:48:27.780]Glennis McClure: When you have questions, and I'm sure that Jessica will point out or some of them will point out some questions as we go along. If you have a small group. I think that's, that's fine.
[00:48:36.000]Glennis McClure: I'm going to just take a few minutes. My presentation is not very long. I am going to spend some time this afternoon. I'm sharing with you, information and kind of walking through how you could use our new ad budget calculator. So that is to 30 mountain time
[00:48:54.000]Glennis McClure: I'm sorry 130 mountain time sorry 230 my time. So anyway, I'll plan to see. Hopefully you there. Oh, actually, before I forget if you I'll put it in the chat. When I'm done speaking or some point here will show
[00:49:08.490]Glennis McClure: If you would like to get registered on to the new system, there is a little process that we have to go through. We're trying to keep track of who is
[00:49:17.280]Glennis McClure: Interested in beta testing and using the new program. Now I'll send I'll put some links in the chat so that
[00:49:25.170]Glennis McClure: If you're interested, you can register, and then I'll send you the link but it'd be kind of nice to get that done before the program starts at 130 this afternoon.
[00:49:33.480]Glennis McClure: So if you are at your computer, want to use your device to kind of watch, watch. Look, you know, step through that we can do that. So anyway,
[00:49:42.450]Glennis McClure: I'm responsible for working with the crops. I did. So I work with a lot of the top specialist and actually some economists that are on our team.
[00:49:52.800]Glennis McClure: To put together a crop budget information and also we do some livestock budgets and also the custom rights. I work with Jim
[00:50:00.060]Glennis McClure: pretty closely as we do a custom rate survey and then put that report together in 2020 we have a new report outdoor actually in 2020 it was new. And so if you haven't seen that yet.
[00:50:12.780]Glennis McClure: All of this information as you can. We are very blessed that we have new communication specialist and Maggie con and he is created farm.us l.edu. So really if you're looking for anything.
[00:50:28.080]Glennis McClure: That we're talking about some programs, any kind of information that is a great website. He's done a wonderful job. Thank you. Just kept putting that there
[00:50:37.170]Glennis McClure: But there's just a lot of information from all of us a lot of the work that we do. It's kind of gets compiled there. So it's kind of nice. Alright, so as a landlord. I kind of preface my. Some of you aren't landlords, of course, but as a landlord.
[00:50:53.340]Glennis McClure: What's one thing you'd like to be assured of, you know, as you're renting out your ground to to attend it
[00:51:01.110]Glennis McClure: Probably, you know, first thing is hopefully you're taking care of things. They're taking care of things.
[00:51:08.160]Glennis McClure: You're getting your you want to get paid you didn't want to get paid for what you're asking for the for the land weather and get i understand it out. There's a lot of crap share
[00:51:17.850]Glennis McClure: But you know what, you obviously then you want those yields you want those expenses to be, you know, just kind of right on par so that you know you can make some money from this
[00:51:27.630]Glennis McClure: So you want to make sure that your tenant has, you know, is doing well and can cash flow and meet their obligation, so
[00:51:37.050]Glennis McClure: Take care of the land. So we get questions. Quite often from our landlords on really, what is the cost of production. So, of course, if you're on crop share, you're probably a little bit more
[00:51:48.570]Glennis McClure: Interested in that. But again, even those that do cash rent and you know Jim just walk through some great examples of, you know, kind of considering what the production will do
[00:51:58.920]Glennis McClure: You know, on a crop year basis versus, you know, how could you convert some of that to looking at it on the cash, cash side of things. So
[00:52:06.840]Glennis McClure: So that's good. But we do cost production information we provide crop budgets and lifestyle budgets and really the university publishes those to be used as a guide. Really, it's kind of
[00:52:20.220]Glennis McClure: We know that every operation is different. So what we're publishing. What we're putting out there is not necessarily what you
[00:52:28.470]Glennis McClure: You know, go by. Okay, or what your tenant goes by. So, and again, understanding the breakeven levels so that
[00:52:37.380]Glennis McClure: Hop concert productions. This slide describes can be used in marketing and program decisions. And so if we know you know what our costs are, you know, we probably are going to be a little bit more assured as we go forward and making some marketing pricing decisions also
[00:52:55.890]Glennis McClure: Crop budgets budgets will help compare our profitability across various enterprises. So is it better to raise corn or in your case, you know, is it something that you can do with dry beans versus, you know, obviously just comparing enterprises. Good thing.
[00:53:14.670]Glennis McClure: And then also, you know, kind of refining our production pack practices in our institute. So if I can if I can use this other product at a different
[00:53:25.170]Glennis McClure: It has a different price point, you know, what does that do to my bottom line as far as profitability goes. So there's a lot of good things and we do actually have quite a few questions coming in.
[00:53:36.480]Glennis McClure: From landlords and trying to understand cost of production. And again, kind of going back to those negotiation points, it's good to know. So I put my slides together primarily talks about the crop budget.
[00:53:49.830]Glennis McClure: In 2021. Those are published now under crop Lodge, but also we have a link to those in that farm yunel.edu website. But there's 83% budgets representing 15 different crops and
[00:54:04.830]Glennis McClure: We've published those in a PDF. So you can go in and you can easily print
[00:54:10.380]Glennis McClure: But also there's an Excel file. So they they've been, you know, kind of put in that format in a spreadsheet format for many, many years so that folks can go in and pull down download
[00:54:20.310]Glennis McClure: Those that pertain to their operation and then go in and make some make some changes using Excel and then
[00:54:27.660]Glennis McClure: Now we have added, at least for the 2020 budgets working on the 2021 getting those populated into the new system.
[00:54:35.430]Glennis McClure: But we do have a new ad budget calculator. So for now, we're kind of giving you both were giving you our old method. And then we're pumped. We're
[00:54:43.500]Glennis McClure: populating those into the new system so that folks can download those into the ad budget calculator and go in and make some changes. So we'll talk about that. We'll go into some detail with that this afternoon.
[00:54:54.900]Glennis McClure: If you can join us at the 130 timeframe. So, all right. This is just a look at that crop watch page and it shows you see there's a PDF format. And then there's the cell format.
[00:55:09.180]Glennis McClure: For each of the different we have them all broke out. We've got the introduction pages that talks about
[00:55:14.970]Glennis McClure: What went into it for some costs. What are the input costs. What was the machinery and labor.
[00:55:20.490]Glennis McClure: And some of that information that went into these for the 2021 timeframe and also on this crop likes page, you can go back and you can look at
[00:55:28.170]Glennis McClure: Our 2020 budgets 2019 I think goes back several years. So you can actually do some comparison. But do keep in mind.
[00:55:35.850]Glennis McClure: That I don't think it was last year we added like four different budgets. So sometimes the numbering has changed. I think we added to soybean and to corn budgets in
[00:55:47.610]Glennis McClure: So, so from like 2018 to 2020 those numbers change. And so you just have to be kind of careful about which budget, you're looking at this is just a quick summary of
[00:56:01.020]Glennis McClure: Oops. Oh gosh.
[00:56:05.070]Glennis McClure: You see what I just did there. Okay, we're back on the right screen.
[00:56:12.930]Glennis McClure: 2021 crop budget averages. So again, this is taking all of our budgets for dryland corn. We have about 10 of those about 15 year data corn budgets for 2021 and across the state. I just did some quick
[00:56:26.730]Glennis McClure: Averaging for you. So we're looking at about 150 where she'll dry land corn to 42 on irrigated corn, and then the cash costs and the economic costs. So again, in the short term.
[00:56:39.210]Glennis McClure: Is economically, you might get by, you know, be able to sell your cash costs and of course right now our prices are better than that. And so that's good.
[00:56:48.450]Glennis McClure: But economically. If you don't cover your economic costs or your total cost, which includes land opportunity cost of equipment and so on.
[00:56:59.880]Glennis McClure: You know that, you know, economically, you need to cover your all costs in the long run. Okay. So after a few years, you know, you're, you're not going to make any headway, or make real profits on your farm bill to reinvest back and to, you know,
[00:57:15.900]Glennis McClure: Maintain your equipment, all that type of stuff. So that's we look at both the cash. So what do you have to have sort of to cover cash costs and then economics. And then, of course, I have information here for driver for soybeans and for wheat and I know that
[00:57:31.800]Glennis McClure: You know, as far as the budgets for the Panhandle goes, we do have for dry edible being budgets. We have sugar before sugar beet budgets.
[00:57:41.940]Glennis McClure: Three sensor sunflower budgets and particularly on the irrigated corn and I'll show you some of that minute their selections wonderland. I think in two years gated porn budgets that are
[00:57:54.600]Glennis McClure: specifically identified for the Panhandle
[00:57:58.890]Glennis McClure: So I ok I just want to show you some quick information on a couple budgets to show you how how the breakdown is on those. So we were looking at a 23 corn budget.
[00:58:11.640]Glennis McClure: And a 63 number 63 soybean budget and you can see we do some know till we get conventional we described in the titles. What, what we're really talking about. So if you go through the list of 83 budgets and you can find hopefully you can find
[00:58:28.500]Glennis McClure: Some of those that pertain or sort of match up with what you've got going on or what your tenant has going on with their operation.
[00:58:36.630]Glennis McClure: I just wanted to also point out to you as we look at those budgets and I think there are in in the package that you would have received
[00:58:44.850]Glennis McClure: A couple budgets printed off those two budgets, I just mentioned are printed off for you there, but just write down. We do have we kind of segment out our prop budget in that
[00:58:56.880]Glennis McClure: What are the field operations that you know what does it take to to grow this process, what do we need to do. Alright. So in this case, and no till
[00:59:07.110]Glennis McClure: Soybean budget. We do some burn down, you know, we plan we spray. Again, we just the girls for that kind of thing. Okay. Eventually combine and truck to crop. OK. So those are our field operations and then
[00:59:20.730]Glennis McClure: Pertaining to those we have operation index. So this is the first. I don't have that column here, but the first first operation is spray burned down so that relates to do these products right here. These are the
[00:59:34.860]Glennis McClure: You know, the four herbicides, or the additive and three herbicides that went into that particular operation and hundred percent applied and how much was applied and so on. So, this is the segment.
[00:59:46.530]Glennis McClure: That talks about them materials and services and then at the towards the bottom of the page. And we have totals we
[00:59:54.600]Glennis McClure: You know figure some kind of interest for six months that carrying cost or let's say you're paying operating loans that information is there.
[01:00:03.870]Glennis McClure: And then we do have we just plug in $25 because per acre on covering types of things like county liability insurance vehicle, Office Expenses those overhead costs that
[01:00:17.070]Glennis McClure: You know pertain to we should be split out over all of our enterprises.
[01:00:21.510]Glennis McClure: And then we do you like to a real estate opportunity and this happens to be a pivot. So we go back to the land values that Jim works on for the State of Nebraska and utilize those figures.
[01:00:33.630]Glennis McClure: So this happens to be 6001 25 per acre at a 3% investment return rate. Now you see that Jim talked about like a two and a half to 2.8 or 9% so we're close to that.
[01:00:45.780]Glennis McClure: But we show that as an opportunity cost. So in other words, if I was not I USA sold out, and I was able to get that price for my land.
[01:00:55.740]Glennis McClure: And I was able to invest it. What could you what kind of investment return or what kind of rate would you have
[01:01:01.290]Glennis McClure: On that. So that's this is that we're making the assumption that all of our budgets that
[01:01:07.650]Glennis McClure: This is owner operated. Okay, so we can go in and make adjustments in those cell files and switch those to cash rent.
[01:01:15.180]Glennis McClure: And then also, you know, takes a little bit. One thing that's been sort of tedious with our Excel files, I think, is really looking at crop share and how that really pans out. So that's where, that's really going to be a
[01:01:28.080]Glennis McClure: Wonderful thing moving from our current system to our new ad budget calculator is we've got built into that opportunity to look a little bit more carefully as a crop share situation. And then, of course, real estate taxes also are a cost to the owner. Alright, so our next slide here is
[01:01:50.760]Glennis McClure: I just kind of summarized a few quick points for you that we have
[01:01:58.380]Glennis McClure: You know, these are some of the things that cost is that that has gone into to the budget. So for 2021. We know that fuel prices dropped. And so this is the figure we're using for fuel and lube. Last year, the so basically
[01:02:14.130]Glennis McClure: And then you can see all the way back to and how that cost is changed for 2021
[01:02:20.640]Glennis McClure: And then we've been figuring we put in a labor figure for the field operations to somebody has to do the work, whether you're paying it, or you're doing itself. Hopefully you value your time.
[01:02:30.660]Glennis McClure: As as an owner, operator, or your tenants doing that themselves, but we have increased that in 2019 to 21 and $20 to 25
[01:02:40.320]Glennis McClure: And then certainly with overhead because those costs never seem to come down, which we actually bump that up a little bit this year.
[01:02:47.190]Glennis McClure: And so again, since oil prices have changed that kind of had some effect of course on the price of for lasers. So that dropped back to 27 cents per pound of and that's what we figured in most of our budget this year. And also we had some adjustments this year for chemicals.
[01:03:08.640]Glennis McClure: Or herbicides insecticides and so on. And part of that might be do because of the oil prices, but also we are seeing that more generics are being used and some of the actual prices.
[01:03:19.710]Glennis McClure: And this, again, this came from the crop specialist, but as they checked on those prices that some of those name brands actually have dropped back some of their pricing to compete with some of the generic sexually. So, um,
[01:03:33.090]Glennis McClure: And then, of course, see, and then also we we put in
[01:03:37.440]Glennis McClure: Equipment values and we put in values for the list prices and you can see that always just seems to go up.
[01:03:44.040]Glennis McClure: And that makes a difference when we're figuring some depreciation opportunity cost and ownership of equipment. So that's the part of our budgets, as well as the land prices, and again, Jim. We go back and we utilize our real estate values of university publishers
[01:04:02.580]Glennis McClure: Alright, this is a really busy chart that you would have this in your handout. So one thing I did though quickly here.
[01:04:09.030]Glennis McClure: So I didn't get printed. I'm glad to share with you this update. And again, you can go in and you can look at those individual budgets and go back and find all of this information, but I just wanted to point out that
[01:04:21.750]Glennis McClure: Budgets number 37 and 38 for corn are are particularly for the team handle. We've got can handle land values included in those and also hopefully a yield and Jessica 10s alerted us to some
[01:04:35.100]Glennis McClure: Thoughts on the yield and we made some adjustments here, even just in the last few weeks and incorrect to those online, but we have here our cash us up for 2021
[01:04:48.540]Glennis McClure: For the two budgets 37 and number 38 and you can see how they compare back like four years. So the first these four columns here are the cash cars per bushel. And then we show the economic costs. So I just quickly.
[01:05:03.120]Glennis McClure: Corrected this particular chart. So I would influence of a European Kendall budgets couple the Panhandle budgets in that cell.
[01:05:10.920]Glennis McClure: Right. And so again, you would have that in your handout. Not really much fun to take a look. It's actually really challenging. I was just kind of running through some these figures today, like, making sure that I put them where they needed to be okay so
[01:05:27.960]Glennis McClure: This is not Nebraska course had an opportunity. A year Coke, which I'm glad we have a chance to to travel.
[01:05:35.250]Glennis McClure: Back in 2019 we my husband and I had a chance to go to Switzerland and visit exchange students. This is my favorite pictures from the mount the cows on the mountain.
[01:05:45.060]Glennis McClure: And we saw them when we have chances to go up to the mountains and we saw them all over the place for us to have the bells on so when it's foggy and they can't see them. They got their bills they know where they are.
[01:05:55.290]Glennis McClure: But I just, I put this picture in here because I wanted to let you know that we do have a livestock budgets and I, in particular, primarily just worked with cow calf budgets have to this point.
[01:06:04.830]Glennis McClure: That there is a lot of information we have some templates in your again in Excel, and we will be populating our new exit calculator with lifestyle. I just, and I don't, I'm not sure exactly when that will be, but hopefully will be
[01:06:18.840]Glennis McClure: Working on that sometime this year to get the livestock budgets that we started into the new ad budget calculator so
[01:06:26.370]Glennis McClure: Again,
[01:06:32.070]Glennis McClure: We have
[01:06:34.260]Glennis McClure: This is just a couple pictures of for you that be may not be familiar, or really would like to know more about the egg budget calculator. I just, this is just, again, that
[01:06:45.300]Glennis McClure: Really we just needed an email address and a password and then you can then you can just pay using the egg budget calculator.
[01:06:55.200]Glennis McClure: And folks can go in and create their own budgets using this system. And again, we're working with our ideas to work with.
[01:07:03.690]Glennis McClure: Your operation. So she think about, well, how do I produce the corn. What is, you know, what are the operations that go into doing that. And so you add in, let's say,
[01:07:13.260]Glennis McClure: You know, first thing I do is this. Okay, so that does and that power unit you'll provide information on what your cost is and your with your equipment.
[01:07:22.410]Glennis McClure: And then, you know, what's the next thing. Maybe I apply, apply some well I planted. So I've got my fire in my tractor and what are the input costs are going with that and so on. So that's kind of the approach that we take that we take, you can go back. So let's say once you have
[01:07:39.150]Glennis McClure: Budgets in next year will be a lot easier to go in and pull up those budgets and then work with your existing budgets and update those
[01:07:46.650]Glennis McClure: Are you can go in and view or modify and copy and university budget into your system and then go in and make those changes. So we're trying to look at different approaches. So again, I will be sharing that information at 130 the farm W and l.edu forward.
[01:08:05.040]Glennis McClure: Slash ABC.
[01:08:08.940]Glennis McClure: Is is the is the websites that you would go to. Now, if you would. And there's a place on there where you can register. I'll send you the registration link.
[01:08:17.670]Glennis McClure: So that you can get the program so fine if you're not registered for this afternoon and want to join us. You're certainly welcome to. But I'll just send that because I would like for you. If you're interested in, take a look. The programs. You know, it's really some exciting stuff.
[01:08:34.050]Glennis McClure: So we are again we're planning to have folks, you can go in and create in this is going to allow for better customization of your projects.
[01:08:42.630]Glennis McClure: And also overhead expenses, as I mentioned, we have sort of that static figure of $25 for overhead expenses in our budgets right now. Well, if you're using Excel you could go in and make those changes.
[01:08:53.940]Glennis McClure: But we would really we're trying to build into the new system, a way to reconcile you over the overhead expenses and same way with like fuel.
[01:09:03.690]Glennis McClure: Repairs I mean each of your budgets for crops will show like what your equipment costs are that, you know, is it true that when you add up all of your crops budget.
[01:09:18.210]Glennis McClure: Is that fuel costs can be in line with what you normally spend each year. So let's say you know you add up all your budgets and you know the fuel costs is you know $15,000 in your life. No, no, no. I spend more than that.
[01:09:32.550]Glennis McClure: You know, so something's amiss, and basically in the projections and go ahead and make some fixes on that. That's what we're talking about with
[01:09:39.810]Glennis McClure: Reconciliation of expenses using the system dimension will be doing livestock. Eventually, and also that whole farm report. So rather than just looking at
[01:09:49.980]Glennis McClure: You know, individual budgets, you'll be able to put those together and like say that's kind of where it's in that reconciliation features will come in.
[01:09:58.320]Glennis McClure: And eventually will make it so that you should be able to produce their cash flow report using the ad budget calculator. So we're that's down the road, but it is definitely in our, in our mindset that once you work with that.
[01:10:14.160]Glennis McClure: You know, we'll have some good things. So I also have been working quite a bit on the stress topic. And just a reminder that boy, what a year. We've had last few years, actually we because we started this in 2019 right before the flood hit and then we really were sort of diving.
[01:10:37.110]Glennis McClure: Head into this with some of the stress and again prices just haven't always been so good. So again, part of it is we all have stress and part of it is to
[01:10:45.810]Glennis McClure: Learn to manage your stress, but also if you're working with the tenant work you know farm families in your area, you know, kind of trying to understand
[01:10:55.500]Glennis McClure: If you know in others how stress, they are and they think that's really a key point, and also the Nebraska roll response hotline is a great resource. So if
[01:11:06.510]Glennis McClure: You or you know there's and you can refer them to talking with real response hotline. They have a wealth of information they provide vouchers for mental health counseling. And so, you know, we partner with them with university.
[01:11:21.330]Glennis McClure: To do some of this work and also we have a real wellness.edu website with a wealth of information on it too. So just one of those things that
[01:11:31.770]Glennis McClure: We like to point out to folks that, you know, don't forget that, you know, farming is stressful but we're still humans and hopefully we can we can take care of ourselves as we need to. So okay, so with that.
[01:11:46.740]Glennis McClure: My contact information. I'm always glad to help with any questions that you have on budgeting and
[01:11:52.920]Glennis McClure: You know, again, if you have more questions and you can't join us this afternoon will have other opportunities as we do a couple more of these programs. So if it doesn't work for you today that you'd like to catch one of our
[01:12:04.440]Glennis McClure: You know, future webinars as I walk folks through the program, just let me know. Or let us know how we can help you with that. Okay.
[01:12:13.830]Glennis McClure: So, it is like my clock says 1112. We're going to take just a four minute break and we'll come back with our and Austin's part of the program. So again, thank you for joining us and enjoy your day.
[01:12:31.680]Glennis McClure: Any other questions.
[01:12:42.960]Jessica Groskopf: Again, if you have any questions.
[01:12:45.120]Jessica Groskopf: Or any other panelists.
[01:12:46.770]Jessica Groskopf: Please go ahead and drop them in the chat or unmute yourself and you can ask them directly to the group.
[01:15:25.020]Allan Vyhnalek: Resume recording. Okay, there we go. All right. Good morning, I'm out. And I like I'm the extension educator, that works on a farm success farm and ranch succession and transition. I'm on this campus next door to Glenys as she mentioned and I here in Philly Hall and
[01:15:43.200]Allan Vyhnalek: Today to Austin and I are going to be awesome to be on just a few minutes to talk about to at least communication farm succession negotiations provisions and some other issues related to lease management and
[01:15:56.010]Allan Vyhnalek: Here's our contact information. And so you're welcome to contact us the time know that for me, for instance, this phone number is my office phone number and I'm working from home a lot of time right now because the virtual thing.
[01:16:10.380]Allan Vyhnalek: I am so go ahead and leave a message. Anyway, it comes to me the email through by voice. Your voice is recorded it comes to me in a file sound. So I'll hear your message and I'll be glad to call you back. That's not an issue.
[01:16:25.950]Allan Vyhnalek: So that's how you get a hold of us. And there's our email addresses that sort of thing. So please
[01:16:31.980]Allan Vyhnalek: Please contact us if you need to.
[01:16:35.580]Allan Vyhnalek: Our topics are topics are going to be hanging on. I talked about these communication right now. I'll talk about succession transition, just a few minutes on that.
[01:16:45.420]Allan Vyhnalek: Also talk about negotiation and adjust how to adjust leases for damaged ground or or for disasters that occur.
[01:16:53.220]Allan Vyhnalek: And then I'll finish up with some least provision management will probably get done your time, we'll see. It's 11 1119 our time, which makes 1019 year time but expect to be done by
[01:17:05.550]Allan Vyhnalek: 1115 1150 your time be 1220 are loving 15 or 20 1230 or 1220 our time. So give us an hour and we'll be done and you can ask questions as we go along. Just put those questions in the chat so Stefan these communication.
[01:17:21.480]Allan Vyhnalek: When Lisa's go to hell in a handbasket
[01:17:26.340]Allan Vyhnalek: Lack of communications to blame for about about 90% of the time. I mean, I don't have a recent study, it says what that is, but I can tell you that
[01:17:35.460]Allan Vyhnalek: My calls come in on either leases or farm succession, for that matter, the people that I deal with when there's an issue when there's a problem. I'm just telling you, with a great deal of assurance that
[01:17:47.640]Allan Vyhnalek: It's a bad communications causing most of the problem either no communication or poor communication, most of the time because somebody just doesn't want to deal with this. They just don't communicate
[01:17:59.010]Allan Vyhnalek: So it becomes an issue when you have a family, a lot of cases our leases or with family members.
[01:18:05.550]Allan Vyhnalek: Or or long time tenants that have been a part of her almost a part of the family for 30 4050 years. So when working with that family member, then keep in mind, or we use the goal. Still have family don't make that assumption get commitment because I find that
[01:18:24.570]Allan Vyhnalek: Sometimes people view, this is very much a business relationship business arrangement, rather than a family arrangement. And so you better make sure you're clear on what you're working on here.
[01:18:34.080]Allan Vyhnalek: I don't have a prescription on that I think business is probably better than family, but you do what you need to do, don't make that assumption. Get that commitment include family members need to be involved.
[01:18:46.680]Allan Vyhnalek: And you give her one proper of appreciation is family members. I don't care if they're young. I don't care if they're the experience. I don't care if they're women. I don't care if they're man. I don't care if they're
[01:18:56.760]Allan Vyhnalek: Purple or gray or green or red that everybody gets treated as family. And it's important that we keep that in mind.
[01:19:06.240]Allan Vyhnalek: The best way to communicate is not to talk like I'm doing right now and it's actually poor communication. The best way to communicate to listen and you ask clarifying questions, but more importantly you seek first to understand then to be understood.
[01:19:22.560]Allan Vyhnalek: Most of the bad communications occurs because you're assuming that you know what they're talking about. But you're not really listening and you're not asked any clarifying questions.
[01:19:34.170]Allan Vyhnalek: Yeah, and it will get more appreciation from the other party that we're communicating. Whereas, if we just simply
[01:19:39.690]Allan Vyhnalek: Repeat what we thought we heard them say, and make sure we fully understand what they said because listening is the art of communication listening. Seek first to understand then to be understood.
[01:19:52.470]Allan Vyhnalek: So sometimes they say sometimes people say something means something totally different. I run into that all the time.
[01:19:57.990]Allan Vyhnalek: Delta call up and they'll ask me a question and I'm assuming one thing and then when I started asking questions. I find out that, no, no, it wasn't about that at all. It was about this other issue.
[01:20:08.280]Allan Vyhnalek: You usually bad communication. So be sure that you're on top of this and make sure you're listening to what the other person says pay attention to them, look at who's talking. Don't talk. Ask questions follow directions that are being given to you visualize what they're saying.
[01:20:26.400]Allan Vyhnalek: But more importantly, you're listening to what people are saying with the idea that you don't recognize what the idea to be responding to them, but you're the idea that you asked him further questions to clarify what they're saying. Just make sure you're on top of that.
[01:20:39.690]Allan Vyhnalek: So visual of just think this through. Do what you need to do to do this right and good communication going very important skill.
[01:20:49.800]Allan Vyhnalek: Okay, the tenants need to communicate stuff, the landlord. I don't care if it's a cash lease or crops, your lease, especially with a crop Shirley's some of these things need to be communicated all the time.
[01:21:00.000]Allan Vyhnalek: And you have to force yourself to share this information with the landlords, especially landlords that are further away that aren't aren't right new area right and community.
[01:21:08.910]Allan Vyhnalek: So please be sure that the tenant is given the landlord time you like crop updates.
[01:21:14.370]Allan Vyhnalek: Include moisture conditions. Did you get. I know the Panhandle didn't get any rain last year you were gave everything up. You read disease or insect crushers just let them know what's going on. I had to spend this much money for take control of Insect Insect past
[01:21:30.240]Allan Vyhnalek: I'm in, and you don't necessarily have to call them all the time or write a note or mailing anything you can send texts or syntax with pictures.
[01:21:39.090]Allan Vyhnalek: My brother rents the farm ground that I own and the most valuable thing he ever did to me or with me is that we had a hail, go to the farms down here where we're at. I have my farm ground.
[01:21:51.420]Allan Vyhnalek: And he went out to the field. He took a picture with the cell phone or the Hail Damage and you texted that to me and that picture was worth thousands of words thousand
[01:22:02.730]Allan Vyhnalek: And just like the saying goes, and it was very helpful to have that information, because at the time I was living about 85 miles away from my farm and I just simply didn't like take the time to drive down there, check with the Hail to done and drive back
[01:22:15.120]Allan Vyhnalek: But that picture was worth a lot. So consider things like that, just to let everybody know what's going on. You have to communicate landlord needs to communicate to the landlord's needs to be on top of
[01:22:29.400]Allan Vyhnalek: Letting the tenant know what they expect for their farm brand. Do you have used specifically told attended what you expect for weed control me. Look at this picture in the lower left hand corner.
[01:22:39.510]Allan Vyhnalek: That's weak control. And I think in a cornfield and look at all the weeds here between neuro That's insane. Here we have a disease problem or a or a nutrient problem on some soy beans. Here it's either lack of lack of some nutrient or disease thing is coming through. So
[01:22:58.620]Allan Vyhnalek: Think about what you want to have his goal for your operation.
[01:23:02.250]Allan Vyhnalek: As a, as a 10 as a landlord. What do you want to tend to do. How do you want them to handle erosion control. How do you handle intend to handle not crop acre
[01:23:10.650]Allan Vyhnalek: Expectations, especially with things like in eastern Nebraska. We worry about controlling cedar trees out there. You might be worried about controlling the yucca small Smoke. Smoke weed or large. So we do in your in your pastors.
[01:23:24.240]Allan Vyhnalek: So what does it mean if you haven't farmstead, for instance. What's the matter, expectation for managing that acid.
[01:23:29.760]Allan Vyhnalek: Are you expecting them to paint. Are you expecting them to care for things are expecting rock driveway gravel driveway. Just, just making sure that everybody's clear on what's going on. I mean, I had a lady wants to call me up and said, my, my tenant.
[01:23:44.070]Allan Vyhnalek: Not doing the road ditch. Right. It's not morning euro ditch to I wanted mode.
[01:23:49.020]Allan Vyhnalek: And I said, Did you tell them how you want to know, well, no. And so I described what I consider to be typical morning Eastern Nebraska for road ditch.
[01:23:58.800]Allan Vyhnalek: And she says yes it is that what that person is doing is, she said yes but I don't like it. I want to done as I know the way different way.
[01:24:05.730]Allan Vyhnalek: Well, guess what I just said. You just tell that person, but that's the way you prefer to have it done.
[01:24:11.910]Allan Vyhnalek: And I had a great opportunity to follow up with her. Several months later, and I said, how did that wrote ditch thing goes and she goes,
[01:24:19.080]Allan Vyhnalek: They went terrific. I just told him what I wanted to have done instead of what he was doing and he said, I'll be I'll do that. That's not problem and took care of the whole thing.
[01:24:28.170]Allan Vyhnalek: It's just a function of communication. Don't sit and stew and worrying wonder about what could happen, what might happen. Get something put together and and communicate that clearly
[01:24:39.150]Allan Vyhnalek: We have to avoid especially with some cash these situations in eastern Nebraska is his whole
[01:24:44.820]Allan Vyhnalek: In this. I don't know if it fits in the Panhandle as much. But this whole idea that one group has power over the other group, but I can hear that I hear this all the time landlord said the tenants has all the power with Elise and the 10 says the landlord has all the power of these
[01:25:01.290]Allan Vyhnalek: Tenants feel that way because they say if the landlord, if I don't pay the land or to give the landlord exactly the deal. They want today by 10 o'clock in the morning.
[01:25:10.590]Allan Vyhnalek: Or they could go to the coffee shop in a normal year and have two or three more bits, maybe in my level or higher better better deals by five o'clock afternoon, just by spreading the word accomplishing
[01:25:21.840]Allan Vyhnalek: And landlord say the 10 has all power with least because the tenant knows exactly what's happening out there, they know where the good squad.
[01:25:29.370]Allan Vyhnalek: Leader with a bad spots are they know where the week pressure is and where the disease pressures, you know, where they have to do this and whether you have to do that. And the landlord doesn't know any of that stuff.
[01:25:37.320]Allan Vyhnalek: Bland doesn't landlord really doesn't know the complete profitability of operation. And so it gets to be messy.
[01:25:46.020]Allan Vyhnalek: But, in my view, the first comp communication about leasing farmland or pastures and share rants or icebreaker or price repair price brew whatever
[01:25:56.760]Allan Vyhnalek: Is now, should I be about the prices. It should be about what management, does the landlord expect and what management can attend and provide once we have those things agreed to we can start talking about what the price is going to be or what the, what the actual dollar and cents arrangements.
[01:26:14.460]Allan Vyhnalek: Unless we have agreement on what the big picture is
[01:26:18.390]Allan Vyhnalek: We don't get it, and we can't get agreement on the money. Very well. The bottom line on that is simply this. I've been to funerals not pleasant. But I've been to funerals. No one gets to take the land with them in a casket.
[01:26:31.380]Allan Vyhnalek: So what's our purpose for having land. I think our purpose is to make it better for the next generation or the next people that take care of our ground after work on if we don't have it anymore.
[01:26:40.770]Allan Vyhnalek: If we're not doing that we're not really doing our job, in my view, because we don't get to take it. Once we got to make it a better acid. And so I think we have to agree on how that's going to happen for your situation because important thing to consider.
[01:26:54.870]Allan Vyhnalek: Okay, some other now some shifting to some comedy. Any questions, put them in the chat shifting some comments about succession and transition because one of the things we said you do with this, with this particular
[01:27:06.240]Allan Vyhnalek: workshop series of Nebraska farmers never really planned to retire. If you look at 35% have some plans to retire 20 plus 15 appear in the upper left hand corner.
[01:27:17.670]Allan Vyhnalek: The middle of the screen nine plus 24 plus 21 that's 54% never plan to fully retire from farming over half never planned to fully give it up. Okay.
[01:27:32.040]Allan Vyhnalek: I was interesting because the survey, they did show 31% planted never retire and another 47% tenant only semi retire. That's 87% 8% 77 or 78% so I give them math right they don't ever plan to get out completely out of farming or agriculture.
[01:27:51.780]Allan Vyhnalek: And so I asked that question over and over, over again. Why is this happening, and the vast majority say I have a difficult
[01:28:01.860]Allan Vyhnalek: Time giving up control the farm for farming and farmers and ranchers controls everything, and in some cases, we're in our 50s and our 16th. We just got control maybe 10 years ago because that's when dad.
[01:28:15.240]Allan Vyhnalek: Or grandpa family on
[01:28:18.300]Allan Vyhnalek: Modern farm equipment allows them to go longer with GPS in an automated steering and stuff like that. You've been standard cab longer and make it work.
[01:28:25.050]Allan Vyhnalek: A retirement, they reach retirement children one mentality. So they want to think about. So they retire. They can't afford to retire with the sad news. The good news is that we have a healthier, longer life so you can
[01:28:35.010]Allan Vyhnalek: Stay working longer and and again just over half, I don't think, have a successor, so you don't want to give it up. They're going to want to quit because they know their business might end
[01:28:43.920]Allan Vyhnalek: And then 54% say they don't know what else they do, which is good. Well, that's true. I mean, I'm actually qualified to retire from the university right now.
[01:28:53.220]Allan Vyhnalek: But I'm not sure what else I do. And my wife's already told me to this pin debit thing. And I've been home lot you better figure out what you're doing because I don't want you to sit around this and go
[01:29:03.090]Allan Vyhnalek: And I'm not really upset with my wife. She's right. I can't just sit around. I'm going to have something to do. So I'm gonna have to figure that out before I can retire. And that's I think that's what happens a lot of farmers to
[01:29:14.700]Allan Vyhnalek: But estate planning estate planning is a different deal. I'm not asking you to retire.
[01:29:19.950]Allan Vyhnalek: Go knock yourself out those long as you want you. I'm not asking you retire.
[01:29:23.820]Allan Vyhnalek: Would you better have something in place for when you have your demise you great demise. Whatever happens, you land acid with your landowner origin. What happens that land acid.
[01:29:32.610]Allan Vyhnalek: Because more often than not planning tends to be deferred and sell some critical, critical life event occurs, which forces the family to address the matter. I know a family. I know a family where the grandpa the matriarch
[01:29:48.480]Allan Vyhnalek: Of son was diagnosed with also
[01:29:51.120]Allan Vyhnalek: And family had to deal with that matter what the lawyer and the doctor. The doctor. The doctor that made this determination said
[01:29:58.350]Allan Vyhnalek: This grandpa this matriarch heads about two months to be able to sign your signature and then I'm not gonna allow do you won't be able to do that.
[01:30:07.230]Allan Vyhnalek: Still has cleared up brain right now he can still do it. And so that family had two months to get stuff done.
[01:30:12.810]Allan Vyhnalek: And the story is that they turned out great. They got it done. And it was all I can go on is all fine, but in some cases, we don't have to
[01:30:20.160]Allan Vyhnalek: I mean, if we have a car wreck. We have somebody gets sick, somebody has cancer. We don't have it. Sometimes we just don't have it, a brain aneurysm, heart attacks, all those kinds of things just don't understand
[01:30:30.000]Allan Vyhnalek: So my point is have a plan in place, because you don't know when degrade demise is going to happen.
[01:30:36.300]Allan Vyhnalek: We don't want to do it. We don't like to do it because it's complicated. We're assuming to be true, it can be complicated. We can make a complicated. We don't sort it out and do it right in our brain.
[01:30:45.060]Allan Vyhnalek: It's mental work. We don't want to think about all these things and lawyers bring up like probate and and wills and trusts and LLC and all those kind of things health care power of attorney all those
[01:30:59.520]Allan Vyhnalek: And we don't want to think about death or you mentioned that and and the thing I've discovered more recently is that we're just afraid if we make some plans now it'll be wrong. At some point in the future.
[01:31:10.740]Allan Vyhnalek: True. If you make a plan. Now, if I put my estate plan together today.
[01:31:15.660]Allan Vyhnalek: In five years I'll probably need to change it. And quite honestly, I did my estate plan, five years ago and and you're reviewing it. I know what I would change right now. That's correct.
[01:31:24.210]Allan Vyhnalek: But I can tell you with a great deal of confidence said if you can make you can make a change a whole lot cheaper than not having a plan in place at all. If you don't have a plan in place at all. Guess what.
[01:31:36.900]Allan Vyhnalek: It may not be the way you want it to be. And you're going to have a family doesn't get along anymore because you did you fail to do your job to make the plan.
[01:31:43.800]Allan Vyhnalek: You fail to do your jobs communicate that plan to your family. You just have to make sure that you've got things in order. In case you do pass away. So something happy so investment.
[01:31:55.650]Allan Vyhnalek: Nearing end of any career as three Tyree a life, for that matter, there's three types of documents that need to be in place and occasions evolve.
[01:32:05.430]Allan Vyhnalek: So in the top circle you got the end of life document. So that's the health care power of attorney to durable power of attorney to health care directive, any questions about what the our tech minute chat.
[01:32:17.070]Allan Vyhnalek: The lower left hand corner here you have this deep pain will trust LLC other structures you put in place, what happens to your stuff.
[01:32:24.240]Allan Vyhnalek: When you're gone. That's what happens. And in lower right hand corner, you have it for the people who have the great pleasure of having somebody take over their business son or daughter or whoever it is.
[01:32:35.160]Allan Vyhnalek: Taking over your business, you have to put succession planning things in place so that business continues.
[01:32:41.070]Allan Vyhnalek: All three sets of documents are needed, or all three things have to be thought about and dealt with and they need to be dealt with. Well, and they need to be dealt with says somewhat separately, but they all have to integrate
[01:32:52.800]Allan Vyhnalek: So consider that in consider communicating all these things with your family, so you know what's going to happen.
[01:32:58.590]Allan Vyhnalek: When I find more than often it is more often than not, is that we have the circle of an action gets put in. I should have a plan, number one. Number two, I go to a meeting or me with a lawyer. This is even qualifies meeting my regular meeting goes about to have
[01:33:13.080]Allan Vyhnalek: Three. This is complicated. I have a headache. So you go to for no action taken at this time when you sit number for somewhere between three weeks, three months, maybe even three years, you just don't take any action.
[01:33:25.230]Allan Vyhnalek: Get out of that break that circle of inaction get going to some kind of a sequential planning, planning of your estate and what happens to your stuff after you're gone. I don't care if you're retiring. You still have to have a plan for what happens you're stuck.
[01:33:40.410]Allan Vyhnalek: So I should have a plan realized that I should go to a meeting after meeting with a lawyer. Good for you.
[01:33:47.340]Allan Vyhnalek: Then you need to get the family together and see what they want to do what their options are. I get people calling me all the time saying, well, yeah, I don't think I've met anybody interested in farming. So I just need to make a plan. I go give you asked him, did you check with your kids.
[01:34:05.610]Allan Vyhnalek: No, you haven't asked him that question, but then do it. Why are you doing, get your family together explore what your options are.
[01:34:11.880]Allan Vyhnalek: Pick some options and into give plus succession plan developed sign. Congratulations. Can you do this in three days he does in three weeks. No.
[01:34:21.420]Allan Vyhnalek: Did you can do it three months, three, six months. Typically, so I would think that by spraying by time everybody hits the field, you can have a plan in place. So I encourage you to do that. If you haven't got that.
[01:34:31.200]Allan Vyhnalek: Or if you have one dad when done even reread it for a while you're going on that.
[01:34:37.770]Allan Vyhnalek: Parents make lots of assumptions and don't do anything with their estate plan and I'm finding that those assumptions don't always work out the way they hope that they will
[01:34:47.700]Allan Vyhnalek: Want assumption that I've made it my kids get along great right now. I know that will continue even after I'm gone.
[01:34:55.050]Allan Vyhnalek: What I'm finding, however, is that the parents is the glue that holds the family together. And once the parents are gone.
[01:35:02.730]Allan Vyhnalek: All heck breaks loose so careful about that. If you expect them to get along. Put a plan together that they can follow that they agree to that they've had some input on and then go from there. The second bowl. I know my children want to keep this asset and family. I'm sure they will
[01:35:21.150]Allan Vyhnalek: Even when we're gone.
[01:35:23.190]Allan Vyhnalek: You know, I talked to lady here a couple years ago and she was about my age. And she goes, yeah, my, my mom just passed away and my mom. Promise me is the executive, the state that we keep the farm in the family.
[01:35:36.300]Allan Vyhnalek: Well, my, my brother and my sisters three of us in the family sat down to talk about that. And now that she's gone and my brother said, yeah, we'll keep the barn farming. The family is my mom wanted. And you see, she goes Wiedemann
[01:35:51.870]Allan Vyhnalek: Mean I could catch this thing out, get my share my third I got bills to pay. I got debt to pay i i would i would think that I really want. I really kind of want the money I you know I understand moms wishes, but that doesn't make sense for me right now where I'm at my stage of life.
[01:36:06.660]Allan Vyhnalek: Since the way they own the ground was Tenants in Common guess what little sister could do the one that one of the mind.
[01:36:13.020]Allan Vyhnalek: To catch them all out, make them all pay and since the brother in the in the executor sister. We're not farmers, they didn't necessarily have the assets of cash to buy little sister out or even want to go into that much debt to buyer out. So guess what their last appointment.
[01:36:29.160]Allan Vyhnalek: So now the great question becomes, is it mom's job to make sure the farms days and the family.
[01:36:36.180]Allan Vyhnalek: You have to answer that as a question that's the question you have to answer yourself free for your situation, your family.
[01:36:42.180]Allan Vyhnalek: In some situations, if the parents want that to continue as a farming operation is held in that family they better put the documents in place to make sure that happens.
[01:36:50.700]Allan Vyhnalek: So I don't have an answer. I'm just saying, give that some thought third bullet says kids will have to figure out to bite. I'll be gone. I don't care what happens
[01:36:58.770]Allan Vyhnalek: If you weren't start World War three. Go with that option. It's that's just, it's just that big of a disaster.
[01:37:03.930]Allan Vyhnalek: And the fourth bullet says if I want. If I have four children and family, my assets have to be divided 25% each equally. That's only fair way to do it. So farmer gets ahold of me and says,
[01:37:16.710]Allan Vyhnalek: I want to for children and family. I've been on the farm with my mom and dad for 50 years mom passed away. Earlier this year.
[01:37:26.760]Allan Vyhnalek: Dad's been gone. I find that farm for 50 years with my mom and dad now by myself.
[01:37:32.910]Allan Vyhnalek: And now we read MOMS WILL couple of months after her death, and it will says the farm shall be given mom and dad's will moms moms have poured over to mom. Mom says I want the farm acid to do be divided 2525 2525 equally because it's only fair way to do it.
[01:37:51.300]Allan Vyhnalek: I would submit that in some cases there does not have to be equal equal does not have to be fair equals not fair.
[01:38:00.450]Allan Vyhnalek: I think that the farmer that's been there for 50 years or 30 years or 20 years or whatever it is, eight years 10 years whatever she get a part of the equity to
[01:38:12.030]Allan Vyhnalek: Equity of the farm operation to replace to select that they put into that stage yet, chances are they have not been paid a correct wage for all their sweat, they put in now thing with mom, dad,
[01:38:23.610]Allan Vyhnalek: So think about that carefully. What do you want that to look like. And quite honestly
[01:38:27.510]Allan Vyhnalek: Independent of one models being used is that you get 1% of the asset 1% of the stage for every year you've adapted. So in that case, the farmer. I was talking about it. He's been out there 5050 years
[01:38:38.970]Allan Vyhnalek: He gets 50% off the top, then you divide the other 50% 25% so you actually get 67 and a half years.
[01:38:46.380]Allan Vyhnalek: I don't know what you think is fair and equitable. You guys aren't figure that out. I don't have it. There's no law. There's no prescription. There's no textbook tells me that, but you have to think about stuff like how are you going to give people proper
[01:38:58.620]Allan Vyhnalek: Proper
[01:39:00.270]Allan Vyhnalek: Fair equity or a fair, that sort of thing.
[01:39:03.600]Allan Vyhnalek: The other one says someday to slob your son or daughter Sunday son or daughter to solve years and I think that if you make that assumption you make that assumption incorrectly.
[01:39:11.850]Allan Vyhnalek: Unless you have that written on a piece of paper and signed to notarized that otherwise the other some of the other kids in the family will jump in. So don't make a mistake. Some of these assumptions.
[01:39:25.770]Allan Vyhnalek: Some things to wrap this up now first conversation regarding any estate planning sheet. Are you get when you're done, you're a student have a family when you start those conversations. Think about that. Get that commitment.
[01:39:35.910]Allan Vyhnalek: Secondly, are MOM, DAD. GRANDMA grandma on the same page they better be on the same page before they start these conversations because
[01:39:42.360]Allan Vyhnalek: The grandpa and grandma started talking to their kids and they both have the little bit different stories. Now, you put into kids against each other. That just causes trouble.
[01:39:49.860]Allan Vyhnalek: Make sure you work that out first MOM, DAD. GRANDMA and grandma have better now to see my mind before they even start or don't start because that's a nice
[01:40:00.210]Allan Vyhnalek: You ready for a catastrophic catastrophic event and hope it doesn't happen. I hope you have a plan in place in case something bad happens to
[01:40:07.710]Allan Vyhnalek: Avoid that suitability and action. Put your plan together have great communication with your family. Avoid those assumptions that aren't always correct if you want more information, my page is called at my page for successions about whole bunch of stuff on your videos, articles, I've written
[01:40:22.680]Allan Vyhnalek: A bunch of links to other places, eggy kinda you know.edu slash succession. That's good place to get started. It's good spot. Um, and let's see. We also I got here. One more thing very soon. I think within a month, maybe within two or three weeks.
[01:40:41.730]Allan Vyhnalek: Shooting there's income things we're working on here.
[01:40:44.790]Allan Vyhnalek: One thing with Jessica and I working on Jessica from the woman AG side and myself from my farm succession side room work on something called the Lang Lang Lang Lang Lang link program regular angling
[01:40:55.710]Allan Vyhnalek: Will be available. I think within a month, probably within a couple weeks people
[01:41:00.180]Allan Vyhnalek: Were trying to work on today's young people interested in being in agriculture or working agricultural Jonah have great access to land. If they don't, if they don't marry into it or if they don't have it as part of their parents.
[01:41:12.390]Allan Vyhnalek: Producers at least half have no parent errors and men, some of them, not all, but some of them want their operation continue it's big enough issue.
[01:41:20.820]Allan Vyhnalek: So solution is we try to create a database for both their services. In other words, there's been any application, the lag landline
[01:41:28.830]Allan Vyhnalek: For land seekers to apply to maybe work with somebody on on getting farm ground or access to farm ground.
[01:41:35.130]Allan Vyhnalek: And the other side is an application for landowners and want to list their land, saying, I'm having a parent here to my operation, and I would like my operation to stay. Is this a viable farming, ranching operation who'd we match up.
[01:41:49.110]Allan Vyhnalek: Now this is not a chance for landowners to get a higher person out there. It's a chance for land owners get another person started farming arranging so just to have that mindset.
[01:41:58.860]Allan Vyhnalek: Applications review possible Matches. Matches landscape is essential animals review with possible interviews landowners will interview lined seekers to see who they might be a match up with
[01:42:08.280]Allan Vyhnalek: And then the other things the way God so there'll be a website to to get to get to all this information.
[01:42:13.800]Allan Vyhnalek: And you look for it by going to Farmer W and l.edu that's where the website will be anchored from farmed out you know that you
[01:42:20.880]Allan Vyhnalek: And then you'll be another one for the land, the land line so off of that page that you'll be able to find for Legion be not just get over me and I'll
[01:42:28.260]Allan Vyhnalek: Get it to your students available and there'll be some statewide releases on that to kind of excited about this. I hope it works. We're going to try it and see what happens.
[01:42:37.230]Allan Vyhnalek: Now we're on to Austin and negotiation. So, Austin.
[01:42:41.700]Allan Vyhnalek: Need yourself.
[01:42:43.230]Yep.
[01:42:45.720]Allan Vyhnalek: So I'm gonna let go.
[01:42:48.960]Austin Duerfeldt: So in terms of negotiations, what we typically see and what everybody usually points to when we started talking about
[01:42:57.150]Austin Duerfeldt: Different types of negotiations is the old fashioned
[01:43:01.950]Austin Duerfeldt: haggling method. And so, you know, typically think about going in and whether it be a car you're doing
[01:43:08.580]Austin Duerfeldt: Cash rants or any type of negotiation, generally what ends up happening is there's one particular item that you're looking at.
[01:43:15.570]Austin Duerfeldt: And you've got one person on one side of the table and one person on the other side of the table. They take extreme positions and they're going to start haggling back and forth.
[01:43:25.170]Austin Duerfeldt: You know that piece of equipment only worth $10,000 you're insane. If you're thinking is worth any more than that. The other guy says, Well, that's an install it's at least worth 45
[01:43:34.620]Austin Duerfeldt: And you're going back and forth to some point where you're probably going to split the difference and say $21,000 is what also that piece of equipment for
[01:43:43.920]Austin Duerfeldt: The problem is when we start looking at that type of conversation is as soon as you sat down at the table, the conversation shifted from the equipment and you know service arrangements warranties. If you're talking about land, you're talking about
[01:44:03.510]Austin Duerfeldt: Maintenance and upkeep and fences and mowing greater ditches and that stuff you've gone away from that conversation. The only thing you're talking about and then tire situation when you're haggling
[01:44:14.250]Austin Duerfeldt: Is the difference between the two extreme positions. How much of that money am I getting versus how much of that money you're getting. And so we'll run a try and do is we want to try and get you to the point where we can
[01:44:29.400]Austin Duerfeldt: Get you off of that and get you to a point where we can get more value from it. And what I've tried to do here is I tried to create a graph.
[01:44:37.410]Austin Duerfeldt: That explains
[01:44:40.320]Austin Duerfeldt: This is going well. Can you back up for me.
[01:44:45.450]Allan Vyhnalek: I'm sorry, I missed ya.
[01:45:00.120]Austin Duerfeldt: There we go. So with this graph. What we're looking at is on the left hand side, you've got your satisfaction in this negotiated agreement that we're working on.
[01:45:10.080]Austin Duerfeldt: On the bottom on that x axis we've got their satisfaction. If all you're going to do is sit down, you're going to haggle over the price.
[01:45:19.590]Austin Duerfeldt: You're going to be stuck on that curve, the line there.
[01:45:23.940]Austin Duerfeldt: If they get most of the money their satisfactions gone up your satisfactions rock bottom. If you're getting most of the money.
[01:45:31.920]Austin Duerfeldt: Your sky high and happy about the situation. They're thinking it's horrible. And so when we get on that and we start splitting and just cutting it down the middle.
[01:45:42.150]Austin Duerfeldt: Neither one of us are happy, but that's the situation that we've got. There's all this potential wasted value out here to the right, if we can just get off of pure money based negotiations.
[01:45:57.780]Austin Duerfeldt: And so on. We started looking at money based negotiations versus what we're trying to pitch.
[01:46:04.530]Austin Duerfeldt: Well, we're pitching is we need to start using
[01:46:09.000]Austin Duerfeldt: Negotiations based on interest options and criteria and this is based on Harvard University on Cambridge, Massachusetts.
[01:46:17.610]Austin Duerfeldt: But what they're using as you're using the communication relationship, but I'll just got done talking to you about and what we're wanting to try and find out is what the interest options and criteria are that each person has and wants to look at
[01:46:31.740]Austin Duerfeldt: And if you go through all that and you start boiling this down, you'll get one or two things.
[01:46:38.130]Austin Duerfeldt: On the left hand side. The BATNA. That just stands for Best Alternative To a Negotiated Agreement and so that's just if I don't agree to buy in this today. I'll go out and buy this other thing tomorrow that might be an alternative
[01:46:51.900]Austin Duerfeldt: The other thing that we can have is a commitment, if both parties agree that's what we want to do was sign on the dotted line get that piece of paper, done. And we've got something that we can move forward with
[01:47:04.170]Austin Duerfeldt: And so looking at this, Sam. Well, what else is there to talk about other than money there is really five areas I'm wanting to pitch to you when we're looking at this to try and create value from
[01:47:16.680]Austin Duerfeldt: And those things are resources and capabilities relative valuations forecasts risk preferences and time preferences.
[01:47:25.170]Austin Duerfeldt: Now that probably doesn't make a whole lot of sense. So what I'm gonna do is I'm going to give you a couple examples here.
[01:47:31.050]Austin Duerfeldt: One of the prime examples I can throw out that everybody can pretty well relate to its time preferences.
[01:47:37.950]Austin Duerfeldt: There is a time preference for a tenant to be able to pay the rent.
[01:47:44.310]Austin Duerfeldt: Especially if it's cash rent in the fall after harvest
[01:47:48.540]Austin Duerfeldt: More than likely if they have to pay it early spring, they're going to have to take out more in their operating loan which means more interest payments.
[01:47:56.820]Austin Duerfeldt: And so a tenant is probably more likely are more willing to pay more for cash or in if those payments are in the fall, rather than the spring.
[01:48:08.790]Austin Duerfeldt: Another one relative valuation. I know it's extremely valuable here on the east side down the southeast corner where I'm at. I would imagine with
[01:48:18.510]Austin Duerfeldt: Elk and bighorn sheep that you've probably got quite a bit of valuation on this as well. When we start talking about real evaluation, but it's honey rights.
[01:48:26.610]Austin Duerfeldt: When you're writing up lease agreement, there is no one way that honey rights have to go and so it's worth a conversation to figure out who exactly values the honey rights more
[01:48:38.730]Austin Duerfeldt: If I'm a landlord, and I don't particularly care for hunting, it might be worth for me to either a have a tenant that life signing that's willing to pay a little bit more for it.
[01:48:48.330]Austin Duerfeldt: Or be maybe what I want to do is I want to withhold the hunting rights and maybe I want to list it in the paper so that I can get a doctor dentist or somebody that's looking for
[01:49:01.350]Austin Duerfeldt: The ability to come out and hunt.
[01:49:06.210]Austin Duerfeldt: And so that's just trying to get you an idea of, you know, starting to think about that stuff. And how's it going to talk more about some of the
[01:49:13.590]Austin Duerfeldt: The key areas that we definitely want you to talk about but moving this conversation along. This can be a university level type of a class.
[01:49:23.310]Austin Duerfeldt: Unless they've got some sort of jargon going on. And so, Harvard came up with these two things. This is based on the Getting to Yes book by Robert Fisher and William URI.
[01:49:34.290]Austin Duerfeldt: But so the BATNA which we just talked about a little bit ago. Which is Best Alternative To a Negotiated Agreement, it can be good or it can be bad.
[01:49:42.960]Austin Duerfeldt: For a tenant if they get a agreement.
[01:49:48.030]Austin Duerfeldt: That can be great, but if they can't get an agreement, a couple things might happen if they lose out on a bunch of cash rain ground kiss or bid wasn't competitive enough
[01:49:57.060]Austin Duerfeldt: Is that going to be substantial. To the point where they've got to cut back on their operation. In that case, I tell you, that's probably going to be a better alternative because if I can't get the ground. Then we're going to have to look at restructuring, some of the operation.
[01:50:11.520]Austin Duerfeldt: A good one might be in landlords are probably have the better end of this is kind of like what else said if I don't get an agreement with tenant. A today tenant, B, C and D are probably waiting at the coffee shop one to talk to me.
[01:50:26.700]Austin Duerfeldt: The other side of this is his own a possible agreements which is ZOPA abbreviated
[01:50:32.340]Austin Duerfeldt: Can when you're looking at this, this is a traditional bargaining method I pulled up on my second screen, we've got that sellers anchored high price versus your walk away point, we've got the buyers anchor price versus their walk away point when those two overlap.
[01:50:50.010]Austin Duerfeldt: You've got that agreement zone because there's there's room in there between ones one offer hundred the others offering 50. And so we've got $50 in there that we can play with in terms of which way is going, what
[01:51:03.630]Austin Duerfeldt: The problem is if you're sticking with that strictly cash based negotiation, you're not always going to have a ZOPA, you're not always want to have that zone where possible agreement if my walk away point is $50 and your walk away point and 60 we've got a gap there $10
[01:51:24.120]Austin Duerfeldt: And so when we're starting to look at being able to create value.
[01:51:28.770]Austin Duerfeldt: We can actually bridge that gap if we can negotiate it right if we can start looking at this in a different way, we can bridge those situations where before, there wasn't ever going to be an agreement, but now we can get there if we can just start looking at some of this stuff.
[01:51:45.450]Austin Duerfeldt: A lot of times what I run into is a lot of people say, well, I think I got shafted on the deal or I don't know if I got a good agreement in, we need to start looking at negotiations in a little bit of a different light when we start looking at what's a good outcome.
[01:52:01.980]Austin Duerfeldt: For instance, you know, I think everybody can follow along with the fact that needs to be better than our best alternative if we sign an agreement where we would have been better off just not signing it. Why do we sign it in the first place.
[01:52:16.230]Austin Duerfeldt: But the ones I really want to push are the best many options proto bright criteria and clear communication. I think those three
[01:52:26.880]Austin Duerfeldt: Are probably going to serve you extremely well if you can get through them and get them done right.
[01:52:32.100]Austin Duerfeldt: If you're doing is I'll mention about, you know, sending text messages when there's a hailstorm the landlord let him know that, you know, there was some damage.
[01:52:40.620]Austin Duerfeldt: If you're using criteria to base your negotiate a contract on like maybe you're using Jim's UL cash rent reports and crop share reports to base how your agreements written now.
[01:52:53.520]Austin Duerfeldt: You're going to have something that you could bring that piece of paper to me and say, what do you think disagreement turned out as
[01:53:01.860]Austin Duerfeldt: And I should be able to, if you've written down the options and the criteria and you've got clear communication going without telling me I should be able to walk through that process and get damn near close to what you have
[01:53:17.220]Austin Duerfeldt: This slide I probably need to change because I found out I probably need to add a little bit to it.
[01:53:22.770]Austin Duerfeldt: When, when I first started out with this slide the investigative negotiator.
[01:53:27.630]Austin Duerfeldt: I want you to be like Sherlock Holmes. You shouldn't be asking what what's it going to take for me to rent this ground you should be asking why
[01:53:35.070]Austin Duerfeldt: Because i can i can reconcile with why, you know why do you need $250 an acre cash surrender why you want to crop share
[01:53:43.830]Austin Duerfeldt: Because if I can find out the underlying reasons as to what is driving that number. I might be able to create some value there because I can do it for cheaper than what you're actually looking for, you know, one of the ones down here in the southeast corner that we run into a lot is
[01:54:00.510]Austin Duerfeldt: When the landlord starts getting a little bit more up in age, they can't mow their lawn. They can't care for the farm, but they don't want to move to town.
[01:54:08.970]Austin Duerfeldt: As a tenant, I can go and mow the lawn. I can go and do the key term the trees, I can do all that stuff. And it's hard to find.
[01:54:17.340]Austin Duerfeldt: People from town that offer those services are willing to go out into the country. So I can offer that and build that in the cash run create value or build an agreement Cree value.
[01:54:28.680]Austin Duerfeldt: The problem that I found when I started doing this as I sat down with a landlord this past December and they wanted me to be present for when they were open up seal bids.
[01:54:40.500]Austin Duerfeldt: And they were opening up so you'll bids and the problem that occurred was I started seeing a lot of guys were starting to do what I was pitching. They were throwing out the idea, you know, I'm going to
[01:54:50.220]Austin Duerfeldt: Maintain the greater ditches, I saw that you've got some problems with some overgrown timber and I've got a skid steer and I'm going to go clean that out.
[01:55:00.090]Austin Duerfeldt: The they were getting that value added section build in the problem is is they weren't painting a picture with it.
[01:55:07.410]Austin Duerfeldt: And so on top of being Invesco negotiator and figuring out the why, figuring out what the interest of the other party is you need to be able to paint the picture as to why that's valuable to them.
[01:55:20.580]Austin Duerfeldt: For instance, with the landlord that I was working with she doesn't have the means to mow the timber or mow the greater ditch and clean the timber, but she doesn't know what the value of that is
[01:55:33.870]Austin Duerfeldt: And so some of the bids that you know i quietly kept to myself thinking that's actually probably pretty competitive because I didn't necessarily want to get involved in promoting one versus the other.
[01:55:46.050]Austin Duerfeldt: They fail to actually portray what it is that they were offering and that's where the issue came
[01:55:55.560]Austin Duerfeldt: In terms of commitment. Again, Jim and I think I'll probably as mentioned it to we do like seeing written agreements.
[01:56:02.940]Austin Duerfeldt: But for a commitment.
[01:56:05.940]Austin Duerfeldt: With that first negotiation that you sit down, you start talking to potential tenant or landlord. If you're signing an agreement that day. I'm probably cringing
[01:56:17.130]Austin Duerfeldt: My expectations for a first meeting on a agreement for reading ground or really for any sort of negotiate agree with. I'm looking at
[01:56:26.520]Austin Duerfeldt: Day one, all we're looking at is trying to figure out what each person's interests are and then we're going to come up with some criteria on how we're going to measure things
[01:56:36.240]Austin Duerfeldt: And then we're going to make an agreement that the first commitments going to be a week from today at noon. We're going to meet up again and we're going to go over what we found out and we'll create some options, based on that and figure out what we want to do from there.
[01:56:52.890]Austin Duerfeldt: This doesn't have to be something where you're just punching out immediately.
[01:56:57.930]Austin Duerfeldt: You know, like you're on some assembly line. Take some time to build that relationship and figure out what you're doing and you're going to be better off for it.
[01:57:08.070]Austin Duerfeldt: The second half of what I'm going to talk about is Justin leases for damage and Eastern Nebraska. It was dude for flood. But really this is
[01:57:18.060]Austin Duerfeldt: Universal across the stage is just depends on what the disaster is you're looking at
[01:57:23.250]Austin Duerfeldt: And basically, what we did was we broke it down between heavy work and hard work.
[01:57:28.980]Austin Duerfeldt: When you're looking at something that's hard work. That's something where you're going to be removing tree branches. If you had an ice storm or something of that nature.
[01:57:38.070]Austin Duerfeldt: corn stocks, if you had some heavy winds been blown into the fence line trash every other obstacles. Those are things that I can do with my two hands, maybe a chainsaw if I needed and a four wheeler.
[01:57:50.670]Austin Duerfeldt: Those are typically a landlord expense. Now if your crop share this is going to be something that split. But, cash ran wise, it's a landlord expense typically do I see landlords paying for this type of work. My comment is no
[01:58:06.900]Austin Duerfeldt: Generally the 10 is probably just going to handle this.
[01:58:11.610]Austin Duerfeldt: When we start looking at heavy work on the other hand, though this is where you're going to be bringing in builders and excavators
[01:58:17.700]Austin Duerfeldt: And you're trying to move substantial amounts of dirt or sand or whatever you've got going in terms of trying to fix something
[01:58:25.380]Austin Duerfeldt: Again, this is a landlord expense and typically you're not going to find a whole lot of tenants with this equipment or if they do have this equipment, they're probably going to be contacting landlord for some assistance and handling that
[01:58:41.370]Austin Duerfeldt: We're going to skip over the sand, because I think what I want to get to is, I want to get to this when you've got issues with leases on disaster.
[01:58:51.900]Austin Duerfeldt: Whether that's with hail or wind or flutter fire, whatever you got going. If you're in a crops to share situation.
[01:59:00.000]Austin Duerfeldt: You probably don't have to worry about any sort of adjustments. You've already got a 6040 split. You got a 5050 split. You've got it built in for those that have cash ran agreements, though.
[01:59:14.430]Austin Duerfeldt: If you're the landlord and you're expecting a full payment, you probably need to most likely re examine the situation under General contractual law.
[01:59:25.950]Austin Duerfeldt: Basically, you've given the tenant. The, the legal obligation for the right to farm your ground and a usable state. And so if something comes through and it absolutely just wipes it out.
[01:59:40.950]Austin Duerfeldt: The 10 is probably going to have some case for vacating the premise. And so you're probably going to need to talk this over.
[01:59:48.960]Austin Duerfeldt: As somebody that
[01:59:51.120]Austin Duerfeldt: Works in the operation where we do rent some ground. I will tell you on the tenant side. Well, we tend to do is going back to the heavy work and hard work. We set $1 limit to it.
[02:00:02.760]Austin Duerfeldt: And so anything that we can go in and fix and handle that's under say 500 or $600 we just go in and do it.
[02:00:10.860]Austin Duerfeldt: And so if there's an ice storm that knocks over some trees or fire that destroyed the fence.
[02:00:16.050]Austin Duerfeldt: And we can get a fix for $500 we're just going to go ahead and take care of it will notify the landlord that we've done it maybe take some pictures.
[02:00:24.150]Austin Duerfeldt: They don't owe us anything. We told us what we were going to do. And that's how we're going to handle it. And that's one of the ways we build value into the bit
[02:00:32.730]Austin Duerfeldt: If it's heavy work where we're going to have to bring in, and those are an excavator
[02:00:38.280]Austin Duerfeldt: Our operation has the equipment to do that. But what we're going to do is we're going to contact landlord and say, hey, can you take a ride with us. We need to show you some
[02:00:48.180]Austin Duerfeldt: Problems on the farm that need to be addressed. We'll go out there and we'll explain what's wrong with it.
[02:00:55.110]Austin Duerfeldt: You know in our area. It's terraces we if we get heavy rains or bust open and go over the top, but we'll explain what the issue is will explain what the prescription is to fix it.
[02:01:05.190]Austin Duerfeldt: Will tell them what our bed is if they want us to handle it and then we'll give them some options in terms of some other people, they can contact and get bids from
[02:01:14.310]Austin Duerfeldt: And at that point, it's up to the landlord who they want to work with and how they want to handle it.
[02:01:19.380]Austin Duerfeldt: But so again that's just we're trying to communicate, we're trying to create value.
[02:01:25.110]Austin Duerfeldt: When we're looking at damages from disasters.
[02:01:29.310]Austin Duerfeldt: In terms of the tenant and crop share situations, both the tenant and the landlord is that you're sharing risky other there are programs and there are money coming in that helps during these events, whether that be prevent plan or version conservation programs.
[02:01:47.100]Austin Duerfeldt: With any of that stuff though. Again, that's something that I highly recommend
[02:01:51.690]Austin Duerfeldt: Take before and after pictures of it and make sure you're that you're getting documentation as you're going through that process. So you've got the information you need for when you're signing up
[02:02:02.910]Austin Duerfeldt: Specifically when you're looking at
[02:02:05.850]Austin Duerfeldt: Casa since since four major projects.
[02:02:10.230]Austin Duerfeldt: In RCS Natural Resource Conservation Service.
[02:02:14.940]Austin Duerfeldt: They've got three main programs that they offer. And then there is also an RD. I have a full. I think it's about an hour and a half long video where I brought in Brad from in RCS who handles.
[02:02:29.460]Austin Duerfeldt: At the state level, a lot of these programs and education on them. And if you're interested in watching that video or seeing how some of these programs work.
[02:02:38.190]Austin Duerfeldt: There's a lot of programs that they've got for livestock in terms of building up watersheds and fence and some other things. If you're interested in that sort of
[02:02:47.400]Austin Duerfeldt: Funding or assistance in a project that you're looking at. I highly recommend, there's a link there in the slide. Go ahead and pull up that video and watch it.
[02:02:58.470]Austin Duerfeldt: To kind of give you an idea, if you're a new landlord or if you're somebody that's got a project coming up and you're not quite sure what it's going to cost.
[02:03:07.020]Austin Duerfeldt: On our end of the state. I would imagine it's probably pretty close on the Panhandle when you're talking about bringing in builder and Escobar, you're looking at $160 per hour.
[02:03:19.380]Austin Duerfeldt: And that doesn't include any additional factors or materials, you're going to need. If you're putting in
[02:03:25.410]Austin Duerfeldt: subsoil irrigation or something like that, you're going to have tile and risers and some other stuff that you don't have to add in
[02:03:31.890]Austin Duerfeldt: When you're looking at that. Now, all these expenses are tax deductible, but you're going to be limited to 25% of that on your girls farming coming in one year with the remainder carry forward. So there's a chance that you might have a large expense.
[02:03:46.530]Austin Duerfeldt: But you're only going to be able to take, you know, maybe a third of it in the first year, and you're going to have to carry for the rest until you can get used up.
[02:03:55.530]Austin Duerfeldt: In general for our end of the state will we do is we take $700 times however many acres, we're looking at
[02:04:03.030]Austin Duerfeldt: And that gives us a ballpark of what a for instance Thailand terrorists job would do I would imagine that numbers, probably a little bit high.
[02:04:11.490]Austin Duerfeldt: For your end. And so my recommendation probably looking at the bottom one $3 a foot on those are work is probably going to give you a lot better have a number
[02:04:25.590]Austin Duerfeldt: The last thing that we wanted to pitch out there. This deals with if you've got a situation where you are in a cash grant agreement.
[02:04:33.870]Austin Duerfeldt: If you're looking at doing some sort of conservation work generally those things come do in terms of when the completion has to be done in late July early August
[02:04:46.170]Austin Duerfeldt: And for some situations, that's going to mess up the tenants crop rotation.
[02:04:51.780]Austin Duerfeldt: So one of the things that we ran into this past year was there was an issue where the tenant and the landlord were an argument based on
[02:04:58.860]Austin Duerfeldt: The landlord wanted to do some work they signed up for cost share it had to be done in late July, but the tenant didn't want to switch the crop in order to be able to have that ground readily available for that work to be done.
[02:05:12.510]Austin Duerfeldt: And so what we ended up pitching to them and what we went with is
[02:05:17.280]Austin Duerfeldt: Based on projected revenue. And so if it's corn and wheat rotation or whatever you might God. We've created a projected revenue of what each of those would have been
[02:05:29.400]Austin Duerfeldt: And then we took percentages of it. And so 27% of the revenue 30% of the revenue and what we tried to do is we tried to come up with an idea of what the tenant might possibly be out for half done to switch the rotation around order to accommodate the work that had to be done.
[02:05:50.310]Austin Duerfeldt: And then we came up with a figure based on that difference as to what the change my be and what the cash rent is, again, if your crop share, you don't have to worry about this. This is something that if you've got a catcher in you might need to consider this
[02:06:08.610]Austin Duerfeldt: And I think
[02:06:15.000]Austin Duerfeldt: I think it will probably be back on because I think that's my last slide, but it's not going to the next.
[02:06:21.690]Austin Duerfeldt: So the last thing I do need to pitch out.
[02:06:24.930]Austin Duerfeldt: If you're in a situation where you are wanting to
[02:06:28.710]Austin Duerfeldt: Build in a different type of agreement again.
[02:06:33.300]Austin Duerfeldt: If your cash ran you're wanting to build some production risk into your agreements.
[02:06:38.760]Austin Duerfeldt: I highly recommend looking at flex flexible cash rent leases and we've got an article on that, but that's a good way that
[02:06:45.540]Austin Duerfeldt: Maybe you're if you're a new farmer starting out and you're trying to make your business more competitive or build some potential in there.
[02:06:53.640]Austin Duerfeldt: That's one way they can get it done. The other thing, and I had mentioned this earlier, I would highly recommend adding into agreement, some sort of a clauses to who's responsible for damaged corrections.
[02:07:05.340]Austin Duerfeldt: Similar to what we did with our operation we just, we just have a flat dollar limit to it. Come up with $1 limit as to what he side wants to be able to bear in terms of where the breaking point is
[02:07:16.770]Austin Duerfeldt: In so that's a clear communicated point where every time something pops up. We don't have to sit down and have Hagel who has to do what we know what's going on.
[02:07:30.240]Austin Duerfeldt: And with that I think we will switch back to our
[02:07:37.050]Allan Vyhnalek: Yeah, sorry. Austin, I have to remember that when you are talking using my slide deck I have. Can I do anything with a mouse why mess you
[02:07:45.120]Austin Duerfeldt: Up. I thought
[02:07:47.100]Allan Vyhnalek: That's it, that's on me. Okay, we got a couple things to finish up here and we'll be we'll be done. We still got good news is I want to cover some least provisions Austin said Jim said it's important to all these are in writing.
[02:08:01.350]Allan Vyhnalek: If it's a verb lease and that and get it in right verbally says for farm ground.
[02:08:08.100]Allan Vyhnalek: In Nebraska handshake or verbal agreements as
[02:08:11.970]Allan Vyhnalek: You read an article from Jessica and myself and others and Co. Write it every year that says that they began on farm ground they began on March 1 and on February 28 a supreme Supreme Court is defined
[02:08:24.390]Allan Vyhnalek: So you have to end at least verbally by September 1 year before.
[02:08:28.470]Allan Vyhnalek: So these begin in about three weeks. No, excuse me, in about six, seven weeks and march 1 actually had to, if you were going to end. Those verbal leases, you had to have done that for 21 you've had to done that by September of 20
[02:08:42.540]Allan Vyhnalek: So now you look at ending at least before next year. Okay, so be sure you're on on on board with how that's done. And check with GM or Jessica or myself or Austin or anybody will help you with through that.
[02:08:53.820]Allan Vyhnalek: It's not the same for pasture. If you're running a five or six month pasture least, it starts may 1 of june 1 June 1 typically out your way because going to be a guy wait for the passion to grow up for a quick cattle out there.
[02:09:06.480]Allan Vyhnalek: It's a five month least and at least is ended so you don't have to give termination your lease is done unless you have a multi year lease contract. So just be careful about that.
[02:09:17.340]Allan Vyhnalek: And this also applies for crops here or cash leases. It doesn't matter what kind of Leisha us to understand that.
[02:09:24.510]Allan Vyhnalek: But also make sure that you have some least provisions cover things like how long is the least going to be
[02:09:31.500]Allan Vyhnalek: What's the timing the lease termination. How much notice. Do I have to get out of nowhere, is your least good start on March 1
[02:09:37.770]Allan Vyhnalek: And go to February 28 but determination could be not September 1 a year before it could be October 1 November 1 so you could you could set that up, however you want.
[02:09:47.850]Allan Vyhnalek: And are we going to allow hold over causes the number is allowed, at least, just to go on for the next year and next year, next year without being without being defined it. That would be a written lease and when we least be negotiated for the next term and other words
[02:10:02.730]Allan Vyhnalek: Some people want to at least negotiated before August or 50 before September 1 because if we can get into that they can't get there at least negotiate for the following year by September 1
[02:10:12.990]Allan Vyhnalek: David, the line and sees to lease and go, somebody else, other people will want to at least negotiate before they had to Texas or Arizona for the winner.
[02:10:21.360]Allan Vyhnalek: Other people want their least negotiated in February, before the march 1 start and so you probably should define that.
[02:10:28.650]Allan Vyhnalek: Because years like this will prices are going up. When did the attendance want to negotiate Elise's early August
[02:10:36.660]Allan Vyhnalek: When do all the landlord's wanted to negotiate to lease later. Right. So you're still going to put it off till the end of February. So yeah, I would define Wayne Elise's you're going to be renegotiated because
[02:10:50.550]Allan Vyhnalek: That just creates less hassle. I think so. Think about that. I also think that this is more of an Eastern Nebraska slide. So I apologize for that.
[02:10:59.490]Allan Vyhnalek: But I think that you have to think about what fertility issues you have in your part of the state and make sure that you protect both the landlord tenant with fertility issues mean if
[02:11:10.260]Allan Vyhnalek: Of Atlantic puts a lot of whatever here. I mentioned five to 10 inputs, lots of fossils on the ground.
[02:11:17.760]Allan Vyhnalek: And they're off to Lisa year that fosters can last more than one year and so you should probably reimburse them for some of the costs that fosters
[02:11:25.320]Allan Vyhnalek: And Jessica would have to get on at this point. Tell me what what issues do or what nutrients we think about in the Panhandle but I think a patch of phosphorus. For most Nebraska.
[02:11:35.400]Allan Vyhnalek: Not potassium and nitrogen is kind of a every year thing, you know, I'm trying to say. It's just a nitrogen yet to put on TV that year, because typically just a one year thing.
[02:11:45.270]Allan Vyhnalek: Line. If you're putting online. I don't know if you're doing a lot of line working in the Panhandle but but
[02:11:51.210]Allan Vyhnalek: It's typically those should be a landlord expense hog or some of the tenants have been drugged into paying that
[02:11:55.920]Allan Vyhnalek: And so if they have the nation be protective of the clauses least if they put till I'm out there, it's going to last for several years and they're often least in a game. Recently I reverse me
[02:12:05.610]Allan Vyhnalek: Okay.
[02:12:08.190]Allan Vyhnalek: Austin talked about erosion and fixing stuff and working on stuff. So I'm like, I spent a lot of time here but just in I've already talked about who controls the other night and noxious weeds and then other we would I consider leads in nonprofit acres, uh, but
[02:12:23.580]Allan Vyhnalek: If you want an already talked about this too if you want certain things done with your farm as a landlord relativity to versus know tail organic versus non organic GMO versus non GMO
[02:12:34.980]Allan Vyhnalek: Higher and handle crops grazing stocks was failing stocks on crop residue. You should probably had a conversation before the restarts and if you don't have had that conversation and you're frustrated with what the tenants doing then
[02:12:47.310]Allan Vyhnalek: Start having that conversation. What do you want to have happen in each of these situations. There's no textbook that tells you exactly what to do but contact GM or Jessica or myself and we'll help you out with that will help you talk through what those issues might be
[02:13:03.720]Allan Vyhnalek: On past year and it's been it's somebody mentioned disasters on pasture. I want to make sure that we understand that didn't pass us two things come up, who's take care of the fence how that's been handled.
[02:13:14.580]Allan Vyhnalek: And a lot of cases, the tenant will take care of the fencing that the land or helps provide the fencing materials hosts wired.
[02:13:24.810]Allan Vyhnalek: But I think, did you draw the 2012 Todd is the two that you better talk about before we have a pasture. These Hagen handle the big three.
[02:13:33.120]Allan Vyhnalek: The drought taught us that. You better talk about fire drought and hail. You've had fires in the Panhandle to for that matter. We've had hail and Eastern Nebraska and you have a lot in the panel to
[02:13:41.850]Allan Vyhnalek: How you handle that in terms of that pasture becoming not available to graze catalog is the least going to be avoided and no lease payment is made.
[02:13:52.650]Allan Vyhnalek: Do they do stills to expect full payment as a landlord, you know,
[02:13:57.060]Allan Vyhnalek: You. I don't have the textbook on what you do there. You just have to have a conversation and get that note in your least how you going to handle those things up and up and up in the sand deals to handle it by pointing a
[02:14:09.000]Allan Vyhnalek: A pasture at somebody that both parties, the landlord attend degree to as being a pasture, like a reviewer that comes out looks at the pastor and he says that. That's it, no more catalog spatially this year and then he just adjusted to that date and honey rights.
[02:14:27.810]Allan Vyhnalek: To understand it crop ground has different hunting rights rules to pasture ground and crops year has different hunting right rules and cash rent.
[02:14:37.140]Allan Vyhnalek: If I'm cash writing and I'm hi I'm fine wine encashment and I don't panic. It's honey rights.
[02:14:45.510]Allan Vyhnalek: If I'm if I'm crops sharing and I have honey rights Jessica has to help here. But my view is that they get shared
[02:14:51.930]Allan Vyhnalek: Okay, you have to discuss that how that's going to happen or the landlord. If you just keep them. The landlord says, I don't want anybody
[02:14:58.650]Allan Vyhnalek: My ground I'm going hot. I got grandkids 100 whatever just just handled Delhi and then we have the recreational use law.
[02:15:06.240]Allan Vyhnalek: This did you need to look up and understand because if you allow somebody to go hundred your property and you as long as you don't charge them anything to haunt you say, go on.
[02:15:15.210]Allan Vyhnalek: If they have fallen hold twist to break an ankle or you have an injury.
[02:15:19.110]Allan Vyhnalek: Kenny come back and sue you. If you didn't charge them to rascal recreation looses use law says if you're not laughing parking can discharge and then you better make sure you have the right kind of insurance to cover that into
[02:15:30.540]Allan Vyhnalek: Either way, you still have to have a kind of a general liability policy for the land that you
[02:15:36.120]Allan Vyhnalek: Got questions about that type them into chat or let me know kind of go because I'm trying to get finished up here and in a good, a good time.
[02:15:44.130]Allan Vyhnalek: I don't know what everyone else had last I guess I'm finished up. So if there's any questions, please let us know if you got questions, you can always email us or call us later would be glad to talk to you.
[02:15:55.980]Allan Vyhnalek: And be glad to have you go to our websites, my, my succession stuffs that yunel daddy excuse me AG kinda you know.edu slash assessing Jessica has been putting it all in the chat.
[02:16:07.530]Allan Vyhnalek: And then just remember this one site and it gets us to get you to almost all of our stuff. And that is the site is labelled farm that yunel.edu really easy to remember farm that URL that edu gets you to almost everything we're doing
[02:16:21.990]Allan Vyhnalek: All right. We'll hang out for about 10 more seconds. And we get off. Hope this was helpful.
[02:16:27.690]Allan Vyhnalek: Hope you found that enjoyable.
[02:16:30.090]Allan Vyhnalek: Well, some way. I mean, I understand too much talking, it's too long. But when a knock it out and get it done. And so we tried to customize to talk to the Panhandle and we'll be back.
[02:16:39.420]Allan Vyhnalek: In early February to do one for the kind of for the central Sandhills part of the state and it will be too late February for eastern part of Nebraska, so
[02:16:48.060]Allan Vyhnalek: You have anybody else would like to sit in and listen to all this, make sure there was no I'm recording this will have a recording available.
[02:16:54.630]Allan Vyhnalek: And I think we'll have it again that website under what to what the topic of these leasing and you'll be able to get a recording of this you want to direct somebody else to this session.
[02:17:05.310]Jessica Groskopf: Allen, can I hop in for just
[02:17:07.020]Allan Vyhnalek: A few seconds. Please, please. Yes, sir.
[02:17:09.300]Jessica Groskopf: So on the crop sure arrangements Allen noted that hunting leases can be split
[02:17:16.620]Jessica Groskopf: Remember, if, if you have a written agreement, you can retain those as the land as the landlord.
[02:17:23.640]Jessica Groskopf: The other thing I would be cautious about our sub leases with hunting rights are probably a bigger issue in western Nebraska. We have several outfitters that come out and do hunts and things like that. So there, there might be some
[02:17:39.900]Jessica Groskopf: Incentives as a land owner to retain those rights. One of those being the liability of sub leases and the other is then the opportunity
[02:17:48.240]Jessica Groskopf: To lease to who you prefer to the other thing I would say is proper residue should also be split according to the share lease. So for example, if you have
[02:18:00.960]Jessica Groskopf: corn stocks out there and you're on a share lease and you're taking cash.
[02:18:06.090]Jessica Groskopf: For that corn stock rent the shares should be provided to the land owner or to the tenant accordingly and less
[02:18:13.620]Jessica Groskopf: The land owner explicitly retained those rights or the tenant with provided those rights as a part of the written lease agreement. Again, we like at least one on one.org
[02:18:25.230]Jessica Groskopf: If you do not have a written lease agreement, please get it in writing, it's usually not about you. Right. We still believe in the handshake, we agree.
[02:18:34.110]Jessica Groskopf: That that's how we do business, but it is for your heirs or for other people who, if something happens to you or your tenant.
[02:18:42.930]Jessica Groskopf: You have in writing what the agreement was and that doesn't have to be a part of the discussion moving forward and it becomes very clear about how that lease should be handled.
[02:18:53.790]Jessica Groskopf: In one party's absence. So we really encourage you as a part of a good estate plan to have written lease agreements in place.
[02:19:03.120]Jessica Groskopf: So with that, we're going to give you some some silence. If you have questions, put them in the chat and we'll hold on and and stay on and answer questions as they come available.
[02:19:13.320]Jessica Groskopf: Otherwise, I have a good weekend.
[02:19:15.150]Allan Vyhnalek: Thanks, Jessica. Thanks very much for all that you did. You did great. So they're good good points on how to handle that. I'm going to stop the recording right now. You know, where do I do that here we go.
[02:19:28.350]Maybe
[02:19:37.530]Jim Jansen: And just to remind your will. After

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Ag Land Leasing, Budgeting and Management for 2021 - Landlord/Tenant Cash Rent Workshop for Panhandle Region 1/7/2021

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