AUDIO: Michael Langemeier, Purdue University
An ag economist says now is the time for farmers to evaluate the best leasing agreement for their operation.
Michael Langemeier, director of Purdue’s Center for Commercial Agriculture, says each arrangement comes with their own set of risks.
“If you’re looking for stability of net returns, the fixed cash rent is the route to go,” he says. “The crop share lease or the flexible cash rent lease do provide some additional income in good years, but the income is lower when you have years like we’re currently going through.”
He tells Brownfield flexible cash leases can benefit both farmers and landowners.
“You can get a potential bonus in good years from the landlord’s perspective,” he says. “From an operator’s perspective, usually the flexible cash leases have a lower base rent. The rent you pay in years where income is not very high is lower and that can be appealing.”
Langemeier says both parties should discuss any changes they would like to see in their rental agreements before the 2026 harvest season.
