Recently I had the opportunity to speak at the Community Bankers’ Association meeting in Bloomington, IL. Over the years I have developed some great professional relationships with agrilenders. One has been with Richard Ritter of Flanagan State Bank of Benson, IL.
During our discussion break, Richard and I discussed a list he had developed of the top 10 reasons why receiving the highest cash rent may not be in the landlord’s best interest. This adds to my list in recent columns.
Richard Ritter’s Top Ten
10. I am not your friend; don’t expect Christmas gifts or any favors. This is strictly a business arrangement.
9. I plan to bale and sell off all corn and soybean stalks to help cash flow. I am not concerned with organic matter, fertility, or the future.
8. I am not interested in signing up or being in compliance on government programs unless I get a check now.
7. If a field tile needs fixed, a water spot develops, or a culvert needs repair, this is not my responsibility or my cost.
6. I can’t afford to mow roadsides since I’ve paid too much to rent your farm and this doesn’t make me any money.
5. I am not worried about working your farm too wet or about field compaction. Work has to be done when we are in the area. If the yields start dropping I will give you the farm back to rent to someone else.
4. I plan to put the least amount of fertilizer, herbicide, and insecticide on your fields. If you require documentation of fertility levels, I will try to find a supplier that will falsify my tests.
3. For me to cash flow and be profitable based on the cash rent I am paying, I am counting on crop insurance claims on this farm annually. These claims will reduce your FSA yield average and reduce future crop insurance guarantees on your farm.
2. I can’t afford to purchase or use any local suppliers or grain buyers. I have to sell direct and purchase all inputs on the Internet. I really don’t care what happens to your local community.
1. If I am short or late making my cash rent payments, please keep in mind that I’ve over paid you in the past and that no one else will pay you this amount in the future. If you take the farm away now, you will lose what I owe you. Remember you owe me. I can walk away at any time!
Not all cash rent arrangements have these problems, but I have witnessed every one of these over the years. Be careful and understand your risk.
On the Road…
I’ve stayed on the road a lot this past month with trips to Colorado, Kansas, Wisconsin, and everywhere in between, it seems. This week I’ll be in Illinois, Kentucky and Tennessee. While I really enjoy meeting all the people along the way, I’m looking forward to the middle of August when I can stay away from the airport for more than a week! Wow, the summer is really flying by!