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Farmland is the single most important asset for many of our clients. Managing that asset to
produce reliable income and appreciation is the focus of Busey Ag Services. Busey Bank traces
its roots back more than 100 years to very start of the Agriculture industry in Illinois. With more than
150 years of combined experience, our Farm Managers are entrusted to care and maximize value for landowners controlling
a combined 100,000+ acres of prime farmland in Illinois.
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Farmland owners who do not wish to operate the farm themselves typically choose one of three leasing options to earn income off the operation of their land by third party farmers. Each option involves different risk and reward tradeoffs. There are also many variations on each. Determining the best leasing option that best suits your need is a very important analytical process that our Farm Managers help you determine.
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This is the traditional lease system most commonly used throughout the Midwest and, in particular, our primary market areas in Downstate Illinois. Under a crop share agreement, the landowner contracts with an operator who provides the labor, equipment and fuel to work the farm. The two parties share the operating expenses and distribute the income from the crop on the same proportional basis. The traditional crop share system provides 50% to the landowner and 50% to the operator, though any number of variations can be negotiated.
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| |  | Pros: Opened ended income, potential risk shared with operator, promotes good stewardship of land
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| | | Cons: Share in farming risk as well as income, requires attention and expertise,Tenant recruitment, evaluation and retention risk
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| | Our Farm Managers are experts in providing expertise and informed involvement in decisions regarding fertilization, crop planning, market pricing and yield management. Busey Ag Services also assists in the selection of the operator using a built-in network of contacts cultivated through 40+ years of agriculture asset management.
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In this type of leasing situation, the landowner simply collects lease payments and does not participate in the operation of the farm business. Typical cash rent contracts are annual. Rents are negotiable and are a function of the quality of the land, demand for rented land and perceived value of future crop income.
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| | | Pros: Predictable income, no risk in business operations
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| | | Cons: Limited income potential, minimal tenant interaction, Tenant recruitment, evaluation and retention risk
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| | Busey Farm Managers can provide an oversight function for cash rent landowners ensuring the appropriate farming practices are utilized. We offer impartial, bottom-line analysis of ongoing operations. We can also assist in managing the delicate relationships that often involve family members and/or neighbors whenever corrective action is necessary or lease termination is required.
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This leasing system remains the least common of the three basic non-operator income options available. Custom farming involves the hiring of an agriculture professional to farm the land in place of the owner. Typical custom farming agreements involve a fixed price per acre of farmland payable in two installments, one after the spring planting season and the other after harvest. Terms are as varied as the personalities of the individual owners and operators.
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| | | Pros: 100% farm income potential, Control of costs, input decisions, No risk in business operations
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| | | Cons: 100% weather/price risk, Significant involvement,Tenant recruitment, evaluation and retention risk, Minimal tenant interaction, Tenant recruitment, evaluation and retention risk
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