09/06/07 Record wheat prices and equitable farm leases

Washington Ag September 6, 2007 When wheat prices were low, Herb Hinman, Washington State University extension farm business economist, heard from tenant farmers in eastern Washington who were having trouble making ends meet under the terms of their lease agreements. Now, with record high grain prices Hinman is hearing from landlords. Hinman: "Their lease is coming up with their tenant and the question is "what should I be asking now?" And it isn't less it is more. As I try to tell them a fair lease with low prices is a fair lease with high prices." That's under a crop share lease, the most common, as both tenant and landlord get more money with higher wheat prices. Cash leases are becoming more popular and Hinman has a word of caution for tenant farmers. Hinman: "One of the problems we have out here, there is always competition for land. As long as land prices stay up maybe you can get into some of these other leases and still make money, but as soon as land prices go down you are in trouble again." Hinman says an equitable crop share compares the dollar value of the contribution of the landlord and tenant and if the cash value of what goes into the crop is 30 percent supplied by the landlord, 70 percent supplied by the tenant, then crop shares should be 30-70. I'm Bob Hoff.