Focus on Ag

8 Considerations with Custom Farming Agreements


Table of Contents:

An alternative to leasing farmland is a custom farming agreement. In a typical custom farming agreement, the custom operator agrees to perform all the machine operations on the owner’s land in exchange for a set fee or rate. The landowner pays for all seed, fertilizer, chemicals, crop insurance and other input costs; receives the all grain produced and all eligible farm program payments on the land; and is responsible to store and market the grain.

Following are the average custom farming rates for 2013, based on the Iowa Farm Custom Rate Survey (includes tillage, planting and harvesting costs):

  • Corn: $126.65/acre (range = $85-175)
  • Soybeans: $112.40/acre (range = $68-165)
  • Small grain: $83.25/acre (range = $50-100)

One obvious advantage to the custom operator is that a custom farming agreement provides some extra farm income, with little or no additional operating capital or farm machinery investment. Fuel, lubrication and repairs are usually the only added costs. In addition, custom farming offers a fixed return per acre to the custom operator, and although there is some possibility of higher repair bills, this is minor compared with the price and yield risks typically faced by a farm operator in a normal cash rental contract. Of course, in a good year, profits from a custom farming agreement will be lower than most cash rental leases; however, in this era of much higher land rental rates there is much more risk to the farm operator with a cash lease as compared to a custom agreement with a landowner.

Landowners also find several advantages to a custom farming agreement. Landowners with small acreages can make most of the crop production and grain marketing decisions without the investment into a full-line of farm machinery. The landowner does not have to negotiate land rental rates or worry about collecting lease payments, since the owner receives all of the crop proceeds. The landowner does have to pay the farm operator an agreed upon per-acre fee for the custom farming services by specified dates. The landowner is considered to be the material participant for income tax purposes, and the landowner is typically entitled to all government farm program payments.

Discuss this Blog Entry 93

on Mar 20, 2014

We should also be open to all things that might turn out to be something that we may also need to do for the sake of something. - Feed the Children

on Jul 21, 2014

I am really happy with your work here. I really expected you to deliver this kind of work and you have not failed me. What an exciting day this is turning out to be! Thanks for making it so! API 510

on Aug 3, 2014

I would give this article a full rating, because while going through this article I learned many new things and along with that I really liked the font used and the information itself was very useful to me. All in all, the best article I've read in this month. Keep it up! rent to own property listings

on Aug 3, 2014

This is a really wonderful article, my friend. I've seen some really good articles over the past few weeks but I have liked this one the most. I am going to bookmark your blog so that whenever you post something fresh, I know it and I will read it right away! seo toronto rank top 10

on Aug 7, 2014

This is really exciting! One of the most greatest article I've read has a big list and this articles has just made that list. I got literal goose bumps while reading this. I hope that you can continue this quality of work in the future as well. Aesir

on Aug 8, 2014

I have a hunch that this post is going to be one of the best posts of all time. And I am right many times. I sincerely hope that I am right this time as well! Delray Beach Day Spa

on Aug 9, 2014

My mind has been really struck hard by the beauty of this post. I am still thinking how can one produce such a magnificent post and not get the praise that it deserves? This post deserves all the praise it can get because...this is perfect! flirten lernen

on Aug 10, 2014

If you are fed up of playing Clash of Lords 2 fairly and you want to gain some unlimited money and energy, well Clash of Lords 2 Hack get here: You will have unlimited money and energy for absolutely no price!

on Aug 17, 2014

This truly is a wonderful and magnificent article. In all my life, I have not been able to study a real life wonderful article like this. But, today, thanks to you, I am finally doing that. A big thumbs up, man! more info

on Aug 18, 2014

Wonderful blog this is. I really have a soft spot for this blog and whenever you need my help or you want me to testify against someone in your favor, I'll do it, no questions asked. You are a real mentor to me! Latest method to hack into Facebook account

on Aug 21, 2014

It's a known fact that there are some games on PS3 which are only exclusive to it and you can not play them on your PC's. But what if I told you that you can? Well, with the new ePS3e - PlayStation 3 Emulator you can play PS3 games for free on your PC. Best PlayStation 3 Emulator for PC

on Aug 30, 2014

I told you that you can? Well, with the new ePS3e - PlayStation 3 Emulator you can play PS3 games for free on your PC....carretilla diesel

on Oct 23, 2014

A fine piece of article this. Really great stuff this is from you. I, for one, am really pleased with this and I hope that you will give more articles like this. peluang bisnis rumahan

on Aug 21, 2014

Wow, this is really fantastic work from you. I really had fun reading this and I am definitely going to tell about this to my family members and friends. Brilliant effort on this! own porn site

on Aug 23, 2014

This is really an excellent article that you have compiled here. I have certainly not seen any greater article than this this one. This is totally one of the best things that I have read in a long time and I am thankful to you that you provided me with this. Cheers! handyman

on Aug 25, 2014

What a wonderful post you've written here, my friend. I am really thrilled by this. This is, without a doubt, one of the most cherished posts of my life. Thanks a million for writing this. I really appreciate your effort! Sex Vines

on Aug 26, 2014

This is a really classy article, mate. I have not read any article better than this in this month. You have really impressed me and I hope to be more impressed in the future. Cheers! Sexo anal

on Aug 26, 2014

This is excellent work from your side. I have really enjoyed reading this magnificent article. This has offered me with very brilliant insights to work on my new project. I really appreciate it! Game Betty

on Aug 30, 2014

I have really enjoyed reading this magnificent article. This has offered me with very brilliant insights to work on my new project. ...carretilla diesel

on Aug 30, 2014

At RentUntilYouOwn.Com we have developed a community with rent to own buyers in mind. If you have been searching for rent to own homes for any length of time online, you have probably become discouraged by the lack of quality rent to own information, or listings available on the web. rentuntilyouown search

on Aug 30, 2014

Have you played Clash of Clans yet? If not, then you have to start playing it now. It is really good and play it with our best Clash of Clans hack. Enjoy the best gaming! Gather Latest Clash of Clans Cheats Here

on Sep 4, 2014

Wow! I am really happy to see this article today. The information has really helped me to complete my paper and I am really thankful to you for giving me the info. I would like that you continue this practice for the future as well. Click Here to Download Xbox One Emux

on Sep 10, 2014

What a great article you have written here. This is, without any doubt, the best article I have seen in a long time. I am really thrilled to see an article like this today. Wow!! Keep this great work going on. Cheers! Meratol

on Sep 10, 2014

This is literally the best blog article I've seen in my long life. I have gone through many blog articles in my career. Sometimes, I have been disappointed. Sometimes I have been pleased. I have been pleased a big amount this time. Really like this! Keep the good work going on. melbourne electrician

on Sep 13, 2014

We pride ourselves on honesty, integrity, affordability, delivering your projects and services on time and within budget. We take on big challenges, and pride ourselves on seeing them through to resolution. Visit our website now. business it support new York

on Sep 13, 2014

Our organic crib mattresses are non-toxic, non-irritating and comfortable for your baby. Our low prices mean you can buy a healthy organic crib mattress for about the same price as the chemical-laden commercial variety. Dax crib mattress

on Sep 3, 2014

I hope to be more impressed in the future....laundry renting

on Oct 18, 2014

I encountered this real estate news website, OC Housing News. I came across a blog post, Federal reserve's bad-debt preservation policies weakened the economy. This post is fantastic. The coverage of housing issues on this site is timely, the cartoons are hilarious, and I found the downloadable guides very useful. I encourage discovering this page to experience it.

on Oct 24, 2014

I can’t imagine focusing long enough to research; much less write this kind of article. You’ve outdone yourself with this material. This is great content.
luxury car rental Los Angeles

on Aug 30, 2014

I am really thrilled by this. This is, without a doubt, one of the most cherished posts of my life.....curso presencial android

on Sep 10, 2014

I am really thrilled by this. This is, without a doubt, one of the most cherished posts of my life.. rebelmouse

on Sep 1, 2014

Extremely good article this is. Whoever has written this amazing article is really a gem of a person. I salute him/her. And they should definitely publish another new article like this. Cheers! adult web cam

on Sep 4, 2014

Whoever has written this amazing article is really a gem of a person. I salute him/her...bautizo

on Sep 7, 2014

Your work is very good and I appreciate you and hopping for some more informative posts. Thank you for sharing great information to us.

on Sep 15, 2014

Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic.
Strategic Campaigns Inc

on Sep 20, 2014

Thanks for another wonderful post. Where else could anybody get that type of info in such an ideal way of writing?
Ofertas Soltour

on Sep 20, 2014

I really loved reading your blog. It was very well authored and easy to undertand. Unlike additional blogs I have read which are really not tht good. I also found your posts very interesting. In fact after reading, I had to go show it to my friend and he ejoyed it as well!
discount shoes

on Sep 21, 2014

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog, I will keep visiting this blog very often.
save my marriage today video reviews

on Oct 7, 2014

Thanks for your post. I’ve been thinking about writing a very comparable post over the last couple of weeks, I’ll probably keep it short and sweet and link to this instead if thats cool. Thanks.

on Oct 7, 2014

Excellent information on your blog, thank you for taking the time to share with us. Amazing insight you have on this, it's nice to find a website that details so much information about different artists.
palestinian terrorism

on Oct 11, 2014

Very good points you wrote here..Great stuff...I think you've made some truly interesting points.Keep up the good work.
mike fiore text your ex back video reviews

on Oct 15, 2014

I found that site very usefull and this survey is very cirious, I ' ve never seen a blog that demand a survey for this actions, very curious...

on Oct 15, 2014

This is just the information I am finding everywhere. Thanks for your blog, I just subscribe your blog. This is a nice blog..
voyance telephone audiotel

on Oct 17, 2014

Thank you for some other informative website. The place else may just I get that kind of information written in such a perfect method? I have a venture that I am simply now running on, and I’ve been at the glance out for such info.
accutane didn't cure my acne but this did

on Oct 20, 2014

Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it's quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,
language of desire mike fiore system

on Oct 23, 2014

I love the way you write and share your niche! Very interesting and different! Keep it coming!
how do i make her want me

on Oct 23, 2014

This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information...
westwood ave ec

on Sep 16, 2014

This is a damn good article. I really like this and I think this is going to be a top article in the future. It has gained some respect now as well. But, it'll gain more!! warehouse documents

on Sep 20, 2014

Your website is really cool and this is a great inspiring article. Thank you so much.

on Sep 24, 2014

I have been checking out a few of your stories and i can state pretty good stuff. I will definitely bookmark your blog
best dandruff shampoo

Post new comment
or to use your Corn and Soybean Digest ID
What's Focus on Ag?

Timely information on crop and livestock production, farm management and marketing, ag policy, renewable energy and other ag topics.

Blog Archive

Sponsored Introduction Continue on to (or wait seconds) ×