What is the optimum lease arrangement for a no-tiller? Is it the same when you have more “up-front” chemical input costs than a conventional-tilling farmer?

Do these differences warrant a different lease arrangement? For instance, is a crop-share lease the best option for a no-tiller or is it better to go with a cash lease?

In Ohio, 25 percent of the land is cropped under a crop-share lease arrangement with approximately 80 percent being a 50-50 split. The landlord typically provides the land, pays the property tax and invests in any land improvements while the tenant supplies labor, machinery and fuel. Income from government payments and costs of insurance and materials (including seed, fertilizer and herbicides) are often split between the tenant and landlord, based on the lease arrangement.

Know Your Options

An easy-to-use spreadsheet that enables no-tillers to quickly and easily look at their best lease arrangement. This iFEAT (iFARM economic analysis tool) is part of a suite of tools being developed by the USDA’s Agricultural Systems Research unit in Fort Collins, Colo.

As part of this research project, we’ve looked at the net returns, breakeven yields and cost and price relationships based on several crop-share lease options. Two lease arrangement scenarios were evaluated with both no-tilled corn and soybeans. In both scenarios, Ohio custom rates and default economic values were used.

Table 1 shows the costs and returns generated by the iFEAT spreadsheet. For each of the two scenarios, three lease percentage arrangements were analyzed. The lease percentages…