Acquisition and Leasing

Whether you’re starting out or a veteran farmer, it’s useful to consider the pros and cons of buying and leasing farmland and equipment. On this page, you’ll find information relating to owning and leasing agricultural real estate, grant and loan opportunities, farmland assessment, and how you might set rates for renting land. Find out about partial budgeting, equipment cost calculations, and much more.

Buying and Leasing Farmland

Whether you’re raising livestock or growing crops, how much land you need and whether you buy or lease are critical decisions for a farmer to make. A land contract is another option. It’s an installment contract that a landowner might use when they sell land to a next-generation farmer.

For new farmers or ranchers, the most significant challenges are access to land and access to capital. The amount of available farmland is decreasing, but Farmland Preservation programs help protect quality farmland and the farmer’s ability to farm.

To help start or grow your farm, there are some opportunities to obtain grant money and loan resources. You can use a Farmland Assessment Checklist when you are examining prospective farm properties for lease.

If you are considering renting agricultural land, there is a disciplined contract process to follow before you sign. You should ask questions and discuss the terms. There are also situations when a contract might not be necessary.

If you haven’t got enough land, it could limit your ability to expand your business. On the other hand, having too much land could lead to cash flow problems and limit your ability to manage it effectively. There is always the option of renting out your additional land once you’ve decided on a reasonable rental rate. Many landowners realize significant income by leasing their property to gas companies for exploration and drilling.

Farm Equipment Cost: Choosing and Buying Farm Equipment

When buying farm equipment, an excellent place to start is to be clear about what tasks you need to do around your farm and what tools you require to accomplish those tasks. Tractors are essential for all farms, but other farm equipment’s choice comes down to personal preferences and convictions. Not all corn farmers, for example, are going to need corn harvesting equipment for wind-damaged corn.

Economic factors will also be limitations, such as the purchase price and cost of running a machine. You can use an Equipment Cost Calculator to assist your decision-making about custom hire or purchase of new or used equipment. Partial budgeting is a tool you use to assess the possible financial impact of purchasing new equipment or other resource changes.