Farm Rent Deadline Comes Up Dec. 1

Farm Rent Deadline Comes Up Dec. 1

Unofficial deadline has been upheld through Indiana case law for years.

This could be an important week across the state as for as deciding who will farm what ground next year. Although there is some debate about it, ag economists and many attorneys have held for years that Dec 1 is the date by which landowners without written contracts that specify otherwise must let tenants know if they don't want them to farm their land the following year.

The Dec. 1 date is based upon rulings and language from the past that says the date a farmer assumes ground to farm for the new year is Feb 1, and he must have been notified 90 days prior to that date if he was already farming the ground, but the landowner does not want him to farm it again in the new season.

What appears to be happening in the countryside now is that landowners and tenants are talking. From what we hear, many landowners are attempting to raise rental rates. How much the raise might be depends upon how reasonable the landowner is, and what the previous rent was. In a few cases, tenants who still had relatively low rents are willing to pay a somewhat higher rent since commodity prices are higher.

However, some tenants have reported unreasonable requests by landowners, who want black ground prices for rolling, far less productive ground. With all this going on, however, so far we've heard of more cases where the landowner and tenant will agree at some price to let the tenant farm the land again next year, vs. the landowner opting for a new tenant. To be sure, anecdotal stories suggest some landowners have been tempted by big dollars offered by new tenants, often tenants coming in from other areas.

Remember that terms, relationships and the tenant's ability to pay are all factors a landowner should consider. Just because prices for corn and soybeans are relatively high doesn't mean every farmer is turning a large profit. Some suffered low yields last year, other are stuck with high input costs which seem to keep rising. It wouldn't be impossible to imagine a scenario where a farmer couldn't or wouldn't pay the back half of a cash rent installment by this time next year.

If you have information on what's happening to cash rents in Indiana and are willing to share, let us know at  [email protected].  

TAGS: USDA
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