Return Per Acre

[Jared 1066]

Hey guys

I was just wondering what an acceptable return per acre is for you on rented land, after all expenses.

 The last four years I have been able to get an average of $75 per acre and was just wondering what you guys are looking at.

I have looked at the average returns for corn and soybeans from farm doc, but I am looking for some "real world numbers"

It would also help if you could give a general idea of the size of your operation, big vs smal.

Thanks,

Jared

[Jared 1066]

?

[smokeyjay]

Looks like those numbers are kept close to the chest, Jared.  Where are you located?

[Jared 1066]

I am located in north central IL.

I have no problem if someone doesn't wish to disclose their personal information, word gets around.

I am just trying to compare numbers.

Thanks,

Jared

[SpringBrookFarm]

Well last year our beans made 15 bu/ac so profit per acre was around 10$ dollars an acre. This year we will be pushing around 30 to 40 bu an acre, and with higher prices we should be shooting for 250 dollars an acre profit.

[Nebrfarmr]

FWIW, I am a small operator, and only rent one field, but I have a good landlord who has the rent set so that if I had a bad loss, my insurance guarantee would cover all my expenses, plus the rent.

With 'normal' yields, I'd say $75+ per acre.  After $100 per acre profit, my landlord gets a bonus, for working with me, and not just renting to the top $$$ renter.  This may be anything from a cash bonus, to spending a couple days with a tractor, soilmover, and blade, and fixing terraces & waterways, or driveways, at no cost to him.

[rawhide]

you can come farm my place and i will pay for all seed,fertilizer, and herbicides and i'll pay you 75 bucks an acre for your time and machinery. i get to keep all that is left and i'll be tickeled to death

[tree fmr]

Hey Jared, I think this is something people don't like to talk about!  My brother currently rents my ground, when he asks what my net income is I say "well, the tenant usually pays the taxes and loan interest!"  When I ask him how much he nets his answer is always the same too "that depends how you count it!"

Then we come to an agreement that neither one of us will go broke and end up having a cold beverage.

[James22]

A few years ago when land, inputs, and cash rent was considerably lower, the tenant and I pretty much agreed on $50 acre nominal which could shift up or down depending on the year.  Expect the effective range was 15 to 150 dollars/acre.  Since he has quite a bit more dollar exposure which is moderated by the existence of  good insurance, we've upped this average to at least $100-125/acre.  Last year wasn't that good in this particular area, so probably was lucky to met the previous $50 goal.  Consequently I didn't raise rents this year to allow some recovery although prices have been spectacularly high.  Will ask for a pretty good increase next year if the expected decent but not exceptional yields pan out.  Expect him to make at least $300/acre this year. 

[Nebrfarmr]

That $75 per acre was profit, after all expenses, which included machinery expense.
If you are willing to also make my machinery payments, cover all repairs, etc, that $75 an acre isn't such a bad deal.

More or less, it was setup so that no matter what the yield, my RA insurance will cover all my inputs and machinery expenses, plus just a little more to live off of.  An 'average' yield at the prices I booked the crops for this spring, comes out to about $75 per acre or a little more.  Now, I don't know what price I'll get for the overrun beyond what I have contracted, at $7 instead of $5, that could increase my profit per acre considerably.