Some help needed on an ag lease

[FightingIrish]

Our family has a 168 acre ranch that has been in the family for almost 100 years. When my in-laws got too old to farm, they let other farmers grow hay for a small payment. In 2006 we signed a long term lease with wine grape growers who now have 80 acres planted and thriving. Our annual income for the lease is $110 / acre. By their own admission, the grape growers are grossing about $20,000 per acre. We have an opportunity to renegotiate the lease next year. I have read of farmers leasing land in the Midwest for corn and soy beans getting three times what we now receive per acre for a much higher value crop. Does anyone have any suggestions on what kind of assistance is available to help negotiate a more equitable lease, perhaps on a percentage basis? Does anyone have examples of similar vineyard leases that we might cite in our negotiations?

[sinkingfeeling]

1. I don't really have any experience, but it would seem to me, that you could get much, much more per

acre. Vineyards are usually planted for the long-term, like decades. They usually require some type of semi-permanent support structures for the vines, so your land couldn't be easily converted back to pasture.

[Vincardog]

2. Get yourself a good local lawyer. If you go for a percentage you usually have to pay the same % of

the costs. Cash rent may be a better idea unless you want to tax shelter part of the income.
Talk to a CPA and or lawyer before you try to 'fix' this.

[jody]

3. I also lease out farm land. The amount you can charge depends on how much land is available in your

area.

In some areas $110/acre is entirely reasonable.

[FightingIrish]

4. There is plenty of land available due to orchards being pulled up

Most of the orchard land is poorly drained and on the valley floor where frost is more likely. I have a hard time accepting that $110 / acre is a fair price for this:

http://picasaweb.google.com/doug.snider/CraterViewVineyard#

[jody]

5. I understand your dissatisfaction but unless your land has special qualities you are at the mercy of

the market just as owners of commercial real estate are hoping to rent property that's been vacant for over a year.

Probably you are receiving barely enough to cover taxes on the property.

Have you checked with other landholders in the area and subtly found out what they were getting?

[safeinOhio]

6. I'd demand all the wine

I could drink.

[jody]

7. Makes sense to me. n/t

[Tumbulu]

8. I lease 30 acres to a neighbor and they uses my well, too. It is certified organic

and high value organic veggies are grown on it. I get $125/acre which is standard in my area of N. Calif.

What I get in addition to the rent is that my land kept organic, kept clean of weeds, and lots of good organic matter is added to it annually due to the good stewardship.

Your situation sounds unusual as your tenant has invested maybe $10,000 an acre and that you do not have a long term lease in place.

The amount is not out of line, but the fact that you could take his investment from him free of charge....I would think they would give you some cases of wine to keep you happy....

[efhmc]

9. I lease for cow/calf in Tx. but get my info for comps from the

local FSA county office. They have been helpful for many years. Have you tired this for info?

[newfie11]

10. Here in the SW panhandle area of Nebraska

it depends on if the land is irrigated or not, has a pivot or not.

We lease our farm land out and get 100 an acre. It is irrigated but not with a pivot. Also this is a small farm (120 acres). If the rented ground were more then the price per acre would be higher. These 40 acre fields make it slower to work due to the size of equipment.

Check with your FSA to see the going rate for your area.