by David Marrison
Farm buildings and livestock facilities often outlast their owner’s need for them, but can still provide usable service. Other farmers in the community may wish to use these buildings instead of investing in new facilities. Both parties can benefit from a leasing arrangement. However, they must agree on the amount of the rental payment and the use and care of the property. However, information about common rental rates for farm buildings is not easily obtainable. To help provide information for farmers, a survey was recently conducted by the North Central Farm Management Extension Committee. The survey was conducted across the Midwest and was completed by farm operators, farm owners, professional farm managers and rural appraisers.
The survey assumed that building tenants would provide labor and management and pay the cost of utilities and minor upkeep. Owners would generally be responsible for major repairs and insurance coverage. Individual rental rates will vary according to the age, condition, size, location and efficiency of the particular building being rented. The results of the survey:
|
Type of Building |
Number of Responses | Unit on Which Rent is Paid | Average Rent Paid | Range of Rents Paid | Average Capacity of Building | |||
| Beef | ||||||||
| Finishing, open lot & shed | 9 | $/head/day | $.12 | $.03 – .33 | 282 head | |||
| Dairy | ||||||||
| Milking parlor and cow housing
Heifer housing –no labor, no feed |
9
3 |
$/cow/mo.
$/head/day |
$12.16
$.31 |
$6.25 – 16.67
$.27 – .33 |
177 stalls | |||
| –with labor, no feed | 3 | $/head/day | $.67 | $.56 – .85 | ||||
| –with labor and feed | 3 | $/head/day | $2.28 | $2.15 – 2.40 | ||||
| Swine | ||||||||
| Farrowing | 5 | $/crate/year | $360 | $165 – 660 | 30 crates | |||
| Nursery | 7 | $/pig through | $4.09 | $1.33 – 6.00 | 1,350 spaces | |||
| Finishing | 16 | $/ pig finished | $12.93 | $6.00 – 19.00 | 1,334 spaces | |||
| Machinery Storage | ||||||||
| Machine shed, all | 75 | $/sq. foot/year | $.45 | $.02 – 1.65 | 3,845 sq. ft. | |||
| –with concrete floor | 26 | $/sq. foot/year | $.53 | $.06 – 1.65 | 3,927 sq. ft. | |||
| –without concrete floor | 36 | $/sq. foot/year | $.40 | $.08 – 1.50 | 3,445 sq. ft. | |||
| –with high doors | 35 | $/sq. foot/year | $.52 | $.10 – 1.65 | 4,474 sq. ft. | |||
| –without high doors | 27 | $/sq. foot/year | $.40 | $.06 – 1.50 | 2,513 sq. ft. | |||
| –over 10 years old | 60 | $/sq. foot/year | $.43 | $.02 – 1.65 | 3,928 sq. ft. | |||
| Grain Storage | ||||||||
| Grain bin, all | 11 | $/bushel/month | $.027 | $.015 – .05 | 30,635 bu. | |||
| Grain bin, all | 78 | $/bushel/year | $.14 | $.05 – .25 | 26,919 bu. | |||
| Up to 10,000 bu. | 43 | $/bushel/year | $.13 | $.05 – .25 | 8,005 bu. | |||
| Over 10,000 bu. | 34 | $/bushel/year | $.16 | $.07 – .25 | 25,000 bu. | |||
| Hay Storage | ||||||||
| Small square bales | 4 | $/bale | $.12 | $.07 – .25 | 4,825 bales | |||
| Large square bales | 5 | $/bale | $2.81 | $1.50 – 3.50 | 225 bales | |||
| Large round bales | 3 | $/bale | $5.24 | $5.00 – 5.71 | 423 bales | |||
| Rural Housing | ||||||||
| House on farm, all | 110 | $/month | $568 | $100 – 1,300 | ||||
| –1 to 50 years old | 24 | $/month | $598 | $300 – 1,000 | ||||
| –more than 50 years old | 56 | $/month | $509 | $100 – 1,200 | ||||
| –2 bedrooms | 12 | $/month | $435 | $100 – 700 | ||||
| –3 bedrooms | 40 | $/month | $499 | $150 – 850 | ||||
| –4 or more bedrooms | 22 | $/month | $626 | $200 – 1,200 | ||||
A printable version of the building rental survey results can be found at: http://aglease101.org/DocLib/docs/NCFMEC-07.pdf.
For more information about determining rental rates and terms, farmers can access a 17 page publication titled “Rental Agreements for Farm Buildings and Livestock Facilities (NCFMEC-04) at: http://aglease101.org/DocLib/docs/NCFMEC-04.pdf. This publication examines the major considerations in developing rental agreements for crop and livestock buildings and facilities from both the owner’s and operator’s points of view. Three different approaches to determining a cash rental rate will be presented. Finally, several other important considerations for developing a lease agreement will be discussed. A sample lease is also included in this publication. A sample building lease form is available (NCFMEC-04A, “Farm Building or Livestock Facility Lease.”) at: http://aglease101.org/DocLib/docs/NCFMEC-04A.pdf
More information about agricultural leases can be found at: http://AgLease101.org