The size of the average farm in the Delta region has steadily increased over the last 50 years. Before the 1960's, a farmer was limited by the amount of land that he could cultivate with a mule and plow. New technologies such as tractors, wide-row equipment, and herbicide resistant genetically-modified crops have greatly reduced the labor time per acre required to farm Delta fields. Most farmers do not own enough land to take advantage of the economy-of-scale of modern row crop machinery. The solution has been to rent or lease farm land from land landowners. Often this land is own by a widow of a farmer or children living in distance cities with busy jobs of their own. Competition for prime farm land in the region to rent remains high despite a shrinking number of farmers. The price of rent for land in Delta varies based on what type of crop the soil is best suited, yield potential, and improvements made such as installing irrigation and laser grading for drainage.
Land payment by the farmer for one growing season can be either cash rent or crop share. Typical cash rent for land in the region is $70 to $120 per acre. A more common arrangement is crop share. Common agreements are 75/25 and 70/30 crop share. In a 70/30 relationship, the farmer will receive 70% of the revenue when the crop is sold and the land owner will receive 30%. Usually some input costs are shared between the farmer and land. Depending on the agreement and weather, land owners often make more money with crop share than cash rent, but they also share some of the risk with crop sharing. With cash rent the land owner will receive the same money whether there is a bumper crop or a failure. The more the land owner understands farming and maximizing yield, the better the situation is for both parties in a crop share agreement. A common arrangement is for the landowner to pay the same percentage of the fertilizer cost as he or she will receiving in rent. Land owners should also be willing to pay for part of the cost of maintaining the land such as irrigation equipment repairs.
Lime. Poor land upkeep practices can reduce profits for the land owner and the farmer. Landowners are often reluctant to pay a share for liming fields because it is not an annual expense like fertilizer and they do not realize the negative effects that soil acidity has on crop yields. Based on soil tests, most fields receive about 2 tons lime per acre at $20 per ton every third or fourth year. This is a significant input cost to a farmer in those years especially if the landowner does not share the lime cost. If low pH is not corrected by agricultural lime applications, soil acidity will reduce nutrient availability to plants (especially P), produce toxic levels of aluminum and manganese, and diminish the weed control activity of some herbicides. A survey of farmers from 1998 to 2005 by Joe Henggeler showed that cotton farmers averaged 75 lb lint more per acre in limed fields. In some instances, farmers have limed fields and the landowner rented the fields to another farmer the next year.
Profit per acre from cotton using dryland 2000-2002 yields with 75/25 crop share.
|Year 1||Year 2||Year 3||Average|
|Without lime applied||$65||$130||$72||$89|
|Lime-farmer pays all||$93||$170||$90||$118|
|Without lime applied||$105||$126||$107||$113|
|Lime-farmer pays all||$129||$140||$113||$127|
Lime was applied 2.1 tons per acre. All lime cost was charged to Year 1 but yield
increases from applying lime continued in Year 2 and 3.
Using cotton yields published from a Delta Center lime experiment, we found that liming a acid field increases the profits of the land owner even after paying his share of the cost of liming. Shown above are profits calculated using costs including lime and the current price of cotton. Cotton yields from lime and no lime plots in a dryland field with pH 4.7 were entered in the program and the 75/25 crop share land option selected to test economics in three scenarios (1) farmer does not apply lime (2) farmer applies lime and pays for it all (3) farmer and landowner share the cost of liming. The goal of negotiations between farmers and land owners should be a 'win-win' outcome. To do the calculations we used a computer program develop at the Delta Center. For more information on pH and lime click on LIME.
Rice yield (bu/acre). Souce: D. Beighley, SE MO State Univ.
Adoption of New Technologies. If a new farming practice is more expensive than a conventional practice but produces higher yields, land owners may be reluctant to help pay the additional input cost. In this situation, farmers usually first adopt the practice on their own land and use the less expensive practices on his crop share rented land. An example is the adoption of hybrid rice which often yields 30 to 37 bushels more than conventional rice varieties. A lower rate of nitrogen fertilizer is used for hybrids (125 vs 150 lb N/acre). This saves $10 per acre but the seed cost is $60 more per acre ($76 vs $16/acre). We made three runs in Profitmeter comparing (1) Cocodrie with 182 bu/acre yield, (2) hybrid rice with farmer paying all the seed cost and 217 bu/acre yield, and (3) hybrid rice with landowner paying 30% of the seed cost.
When the farmer paid all the hybrid seed cost, the farmer made $41 per acre more by planting XL723 hybrid seed and the landowner made $46 more per acre. When the parties split the seed cost 70/30, the farmer made $65 more per acre and the land owner made $23 more per acre than if non-hybrid rice had been planted.