Thursday, February 18, 2010
Farming small plots: opportunities or obstacles?
As I've driven down the back roads over the years, one thing that always seems to catch my eye is the sight of some big rig pulled into a tiny field. Might be a combine in a little corner of cropland stuck between some woods and a pond or a planter on a piece of ground between railroad tracks and a river.
Sometimes, the quality of the land appears to be pretty decent; other times, well, it looks hard scrabble, not worth farming at all. In any case, the equipment seems mismatched, and you just wonder what the economics are of taking on a patch of land like that.
But, these cropland fragments, a challenge to some, can be an opportunity for beginning farmers. A young farmer recently wrote in Farm Business Talk that he has a chance to rent a number of small plots of ten acres or less.
“I know a lot of guys don't like to mess with them, but to me they are a good opportunity to try out new technologies. Also,I feel that this is a way for me to get my foot in the door for bigger and better things.”
The question, though, is how much rent should he pay for these small parcels?
Experienced growers give a range of responses, including:
• Consider a crop share arrangement. “That way, the landowner would realize the lower yield from fields with excessive headlands and unfarmable corners.”
• Small fields take a lot of time and have lower yields. One grower says he offers only half the going rate. "Take it or leave it." Another says his rule of thumb is three-quarters the usual rent.
• A South Dakota farmer says that in his neighborhood the discounts are based on the features of the land: “Rule of thumb in my area is 5 acres or less with no trees or ponds to go around $50 per acre tops, 6 to 10 acres, $75 per acre. If there is a pond within 100' nobody will farm it.”
• Make sure you plan to do all the farming yourself, says one farmer. “If you are serious about farming those small patches of ground, you really need to do them yourself and not have custom spraying or combining done,” he says. “More than likely the custom applicators will charge more to do the work than they would for doing the same work in larger sections of ground.”
Craig Dobbins, a Purdue ag economist, says that the case of smaller, irregular-shaped fields is one of many factors that should be considered in figuring an appropriate rental rate. But it happens to be number sixteen, and last, on his list, which includes land quality, fertility, drainage, and facilities at the top.
What’s been your experience with farming smaller plots? Join the discussion in Farm Business Talk.
Posted by John Walter at 9:07 AM