With the ultimate outcome of the 2023 crop season unknown and the bulk of harvest activity still to come, it might seem a stretch to think about the 2024 cropping season.  However, now is the time farmers and landowners are making key management decisions about the 2024 crop that will greatly impact profitability and agronomic practices.

I always enjoyed the period in late summer and early fall when the crops were starting to mature and the culmination of a year’s efforts would soon come with harvest.  It was a time to not only get the combine and equipment ready for the six weeks of full throttle activity that would soon start, but it was also the time to plan for the next season.  I would make out our cropping plan for the next year and review recent soil tests in order to calculate the fall applied fertilizer and lime we would need so that we could book it and prepay if financially advantageous.  With cropping plans in place and fertilizer needs booked, early seed purchases for new and limited availability varieties could also be contemplated.

In regions around the country where there are more cropping options than the typical corn and soybeans grown in the Cornbelt, crop planning and harvest of the various crops happens over multiple months as compared to the main fall harvest period in the Midwest.  No matter the timing, important and impactful decisions are being made prior to and during harvest.

One of the most important strategies of farmers is controlling acres whether by owning or leasing.  Leading into, during, and after harvest, farmers are wanting to maintain their current leases and try to add additional acres to farm if they want to grow their operations.  Today’s typical farming operation will control acres through a mix of means including owning some land, possibly crop sharing some, and cash renting other farms.  The cash rent leases will probably include a portion of land rented from relatives, some from close neighbors or retired farmers, and some rented at market rates wherever it makes sense for the operator.  

A good share of the rental transitions involving landowner and tenant take place during the coming months as the aging of landowners creates a succession of ownership and new decision-making about leasing.  Also, farmers who are retiring start making arrangements to lease out their land if there are no farming heirs and they may also assist their landowners in securing new tenants.  

Land sales activity picks up prior to and after harvest.  A farmer can add to their acres for the next season by purchasing farms that come up for sale or by renting a farm purchased by an investor who needs a new tenant.  Competition for good cropland to own or rent is stiff and either way, farmers will need to be at market prices in order to add the acres to their operation.

In addition to the strategic decisions about adding acres to a farming operation being made over the coming months, there are several key management decisions that are often made during this time of year that will greatly impact farm profitability in 2024.

Input pricing, more specifically for fertilizer needed for the 2024 crop, is one of the most important decisions facing farmers as we enter harvest of the 2023 crop.  At times, the best pricing for nitrogen, phosphorus, and potassium fertilizers happens before harvest when operators can prepay for much of their expected fertility needs for the next season.  In areas where conservation practices allow fall fertilizer applications, buying now makes the most sense.  Even for those areas where application should be done during and after spring planting, the time value of money and the expectation of price fluctuations will come into play when deciding when to pay for fertilizers.

Important agronomic decisions are being made leading into and during harvest.  Crop rotations for each field are being set in order to facilitate fall tillage and fertilizer applications if appropriate. Soil testing needs are being booked for sampling after the crop is harvested so that actual amounts of fertilizer, lime, and micro-nutrients can be more precisely determined.  

Farmers are also starting to think about any major equipment upgrades or purchases they might want to make before harvest or after harvest and before the end of the year.  Financial ability and tax planning will go into any investment decision.  

Although it might look like a more quiet time on the farm right now, it actually is a period that can be critical to the success of the operation for the next season.  Plans are being laid and decisions are being made that will affect how a farmers farms and if they can be profitable next season.  The 2023 harvest is upon us, but the 2024 season is just around the corner.  

Explore the critical decisions farmers need to make now that will significantly impact their profitability and agronomic practices for the 2024 crop season.

Explore the critical decisions farmers make during harvest season that will significantly impact their profitability and agronomic practices for the 2024 crop season.

Now Is Decision Time For The 2024 Cropping Year | CommonGround Blog

Now Is Decision Time For The 2024 Cropping Year

High interest rates and tight profit margins require landowners to increase their farm income. However, it can be difficult to justify higher farmland rental rates than the USDA county averages.

But USDA isn’t the only source of industry benchmark data. In fact, CommonGround’s proprietary CashRentstimate algorithm can assess your farmland value more accurately. Read on to learn why it’s a better tool for calculating cash rental rates. 

CashRentstimate is CommonGround’s proprietary algorithm for calculating the true value of a piece of farmland. It takes into account over fifty different demographics to make this calculation, including:

These data are then analyzed by a multiple linear regression algorithm, a machine learning technique that finds the most powerful variables and weights them more heavily. Because different states have different priorities, we’ve tailored the CashRentstimate to specific conditions and predominant crops within 20 individual states. 

For example, North Dakota produces more canola and winter wheat than Illinois. As such, canola and winter wheat weigh more heavily in the North Dakota CashRentstimate than they would in Illinois. 

Once the variables have been weighted properly, the CashRentstimate correlates each of those 50 variables with cash rental rates for the given region, combining them into a single formulate that generates the most accurate estimate possible.

Instead of calculating cash rental rates based on a single metric, like 10-year county averages—the CashRentstimate takes into account all the factors that impact land value and profit potential. The estimate produced is based on facts, not guesses. 

Why do USDA published cash rental figures fall short? 

So the big question you’re probably asking now is: why trust the CashRentstimate over USDA? While USDA published figures are commonly accepted among farmland owners and their tenants, relying on them exclusively can give you an inaccurate picture of the true value of your farmland. 

USDA published figures are based on data captured through farmer self-reporting. This means as comprehensive as it is, USDA data falls prey to the inherent weaknesses of survey data—most notably, farmer bias. 

In this case of cash rents, farmers have an incentive to keep the county average low. As a result, they may under report the amount they pay in rentals to drive down the average and, by extension, expectations of payment in future seasons.

Another challenge that USDA published figures face is that they’re based entirely on a single demographic: cash rental rate. 

So while you can have a good sense of fair market value for that region, you don’t really get accurate information about that specific piece of land. There are a number of factors specific to your farmland that could justify higher rental rates:

Well maintained irrigation infrastructure

While USDA published figures don’t take these land-specific demographics into account, the CashRentstimate does. That way, you lease your farmland at a rate that reflects its true value. 

USDA figures are based on ten-year county averages. This means that even if your land value spiked this year, odds are your cash rents aren’t keeping up—because USDA is still factoring ten-year-old prices into their averages.

If you want to charge a fair price based on the value of your land today, not ten years ago, you need a way to quantify that value based on up-to-date metrics. Our CashRentstimate algorithm helps you do just that. 

The fact that farmers report cash rental payments to the USDA, which are then used as the basis for determining the fair value of a cash rental agreement in following years, runs the risk of creating a positive feedback loop. 

This is especially true if you newly acquire a piece of land, and find out the previous owner gave the farmer a sweetheart deal. They could be charging $200 per acre, when the value of the land is now $350. This drives down the county average, which is then used to justify future similar prices. 

The problem with positive feedback loops is that they can perpetuate arbitrary figures that aren’t based in anything concrete or substantial. Instead, CashRentstimate calculates your land’s true value as the basis for your cash rental rates. 

Why should you use a CashRentstimate as the basis for cash rental rates?

By providing a more accurate picture of your farmland value, a CashRentstimate can materially impact the health and profitability of your operation. Here are some specific benefits you’ll realize from using the tool. 

Because CashRentstimates nearly always lead to higher cash rental rates than USDA published figures, you can recoup the investment in your farmland faster. In one case, a landowner we work with was able to realize a positive ROI two years sooner than originally anticipated. 

Because historical lease values are one factor (of many) that determine the market value of farmland, raising your lease rates can contribute to higher farmland valuation. This can help you improve your equity in the asset, even before you recoup all your investment costs. 

3. Transparency between landowner and farmer

Key to a successful farm partnership is transparent communication between landowner and tenant. A CashRentstimate can provide an objective standard by which you can evaluate your piece of land, instead of making the farmer take your word for it. 

Interestingly enough, half of CashRentstimates are requested by farmers, not landowners. Farmers are just as interested in being fair-minded when negotiating their lease, but they also want full transparency into the true value of the land. 

4. Attract a younger generation of farmers

The vast majority of farmers filling out CashRentstimates and bidding on properties listed on CommonGround are below the age of 40. As such, filling out a CashRentstimate and listing your property on CommonGround can be a great way to attract younger farmers and increase your operational longevity. 

Ready to get the most out of your farmland? Get a free CashRentstimate today to see the true value of your asset. 

CashRentstimate vs. USDA county averages: which is the best tool for calculating cash rental rates? Read this blog to find out. 

Calculating Cash Rental Rates: CashRentstimate vs. USDA Published Figures

The weeks leading up to fall harvest are a time of preparation for farmers and others in the Cornbelt. Farmers are readying their equipment, laying out the logistics for getting it all done, and planning for the next season as they prepare for the sprint that is harvest. Grain elevators, fertilizer dealers, agronomists, and equipment dealers are also putting their operations in order to handle the rush of the next several months. 

The combine is the first focus of farmers when they think about getting ready for harvest.  This large piece of farm equipment is one of the two most important implements on a grain farm with the planter being the other.  A combine (or cotton picker where applicable) is also the most expensive machinery investment for a farming operation with total price for the largest combine and two heads reaching over $1 million.  

While growing up on a Midwestern grain farm in the 1970’s and continuing for several decades, our operation normally had two combines.  One might concentrate on corn harvest while having two helped insure one would always be operational if the other broke down.  Breakdowns were very common as belts, chains, and bearings would invariably wear out during harvest.  Plus the combines of that time did not have nearly as much capacity and were lacking horsepower.  

During the 1980’s and 90’s when farm incomes were mostly flat, we ran our combines over more years than is typically the case today for several reasons.  Maintaining profitability meant keeping costs as low as possible which resulted in fewer new equipment purchases and more maintenance and repairs.  Also, the technology and capacity of combines changed much more slowly with the exception of when the rotary style combine was introduced.  The combines of those day were mostly simple enough that we could do most repairs ourselves.  

The result was that we spent days and sometimes weeks before harvest assessing and then replacing what was worn down and needing replacement like cylinder or rotor bars, concaves, augers, belts, and chains.  Once we had the parts, we would pull the combine up to the shop or under a shade tree and crawl around and inside the combine to replace the worn parts.  And always there were skinned knuckles and hands as combines were notorious for having the hardest to reach bolts and parts in which you had to twist and turn in all directions to reach the part. 

No matter how well you assessed each moving part and replaced the worn ones that might give a problem, invariably there would be breakdowns during harvest.  Belts, chains, and bearings might not show up as bad until operated for hours and days.  Therefore, a combine always seemed to breakdown and stop harvest right at the peak of activity.

Times are different today as combines are better built, extremely complex in design, and technologically advanced.  The largest combines and practices of today can harvest more grain in one hour than I could in one day 30 years ago.  With these big combines, farmers can do much of the maintenance and some of the normal repairs, but much of the work now has to be done by the dealer due to the size and complexity of the combine. 

In addition to preparing the most important piece of equipment, the combine, for harvest, farmers are busy getting tractors, trucks, grain carts and other equipment ready to handle the grain and do post-harvest tillage.   

In the past when yields of corn and soybeans were much less than today’s, figuring out the logistics of harvest were not as demanding.  A few gravity wagons or small two ton trucks could haul away the several hundred bushels per hour that the combine could harvest.  Today, a farmer has to line up their own or hired semis to keep ahead of the thousands of bushels per hour that large combines can harvest.  On-farm grain storage systems and grain elevators have to be sized to handle large amounts of grain each day of harvest.  

Finding labor to drive the equipment and trucks is getting harder as the equipment gets larger and the pool of seasonal help diminishes.  Many times it was retired farmers or other local retirees who stepped in to drive the tractor and wagon or truck to help out their neighbor during the all hands on deck harvest period.  This is more difficult today as machinery is bigger and more complex while obtaining truck driver’s licensing is more involved.

For farmers, the period leading up to harvest is a time of satisfaction and anticipation.  Watching the crop mature and assessing how yields will turn out is getting a producer closer to the culmination of all the planning and hard work that has gone into nurturing the best crop possible.  Preparing for harvest and getting everything ready for the upcoming weeks is a good feeling but one with its own anticipations.  What will the weather be when I need to be going full tilt?  Will I have any major equipment breakdowns or will there be holdups at the elevator? Will my yields be as good as I thought?  What will grain prices do?

Stay turned as the race that is harvest will soon be here.

Explore the world of farmers' preparations leading up to the fall harvest in the Cornbelt. From combine maintenance to logistical challenges, discover the evolving landscape of modern farming.

Harvesting Then vs. Now: The Coming Harvest | CommonGround Blog

Harvesting Then vs. Now: The Coming Harvest

As you continue to evaluate and improve your farming operation, it’s important to keep your crop insurance policy top-of-mind. 

Even when you make the best planting decisions and streamline your irrigation, crop protection, and fertilizer applications, Mother Nature can be, well…a mother. A crop insurance policy that meets your needs and provides necessary coverage can make the difference between a quality operation and one that’s on the ropes.

Here are some key factors you should consider when choosing your next crop insurance policy. 

The Great Divide: understanding the two major crop insurance programs

(For experienced farmers, this section may be a bit of a review. So feel free to scroll down to the next section and skip this part.)

Crop insurance is divided into two major categories:

Federally subsidized multiple-peril crop insurance (avg. $14 million in premiums annually)

State-regulated crop insurance (avg. $1.2 million in premiums annually)

By far the most popular program, federally subsidized multiple-peril crop insurance (MPCI) provides affordable insurance to cover the potential for widespread catastrophic losses associated with agricultural production. It serves three functions:

Protect farmers’ income against crop failure or price collapse

Protect consumers against shortage of food supplies and extreme prices

Assist businesses and employment by providing an even flow of farm supplies and establishing stable farm buying power

MPCI covers a broad range of perils, including:

Note that MPCI only applies to crops, not damages to on-farm structures, like grain bins and livestock barns. 

To qualify, farmers must purchase this program before planting begins. They will sign with a company that has their own contract with the Federal Crop Insurance Commission (FCIC), which then establishes the terms and conditions of the agreement. 

By contrast, the private market offers crop/hail insurance that’s regulated by state insurance departments. It covers a narrower range of perils, which does expose the farmer to more risk. However, there is generally a greater availability of crop/hail programs, it can be purchased at any time during the growing season, and isn’t subject to the same rigorous reporting as MPCI. 

There are two broad ways to structure crop insurance: yield-based and revenue. Let’s take a look at the two in more detail.  

Yield-based crop insurance policies provide coverage only if the actual yield obtained during production becomes less than the expected yield. Under this broad umbrella there are some different options:

MPCI, as discussed above, works where farmers choose the volume of yield to be insured—anywhere from 50-85%—based on the historical data of the individual farmer

Group risk plans use the county yield index to determine the reference yield, rather than the individual farmer’s history

The other broad category of crop insurance is revenue insurance, which provides protection against a decrease in generated revenue resulting from loss of production, market price of crops, or both. 

Some of the more common revenue insurance policies include:

Crop revenue coverage (CRC), which makes use of two varied prices—the price projected at the season’s onset, and the price calculated just before harvesting

Revenue assurance (RA) includes the grower choosing a monetary sum to be covered that lies 65-75% of anticipated revenue

Group revenue insurance policy provides protection if and when the average county revenue under insurance drops below that selected by the grower

READ MORE: What key crop insurance deadlines should farmers know?

5 factors to consider when choosing a crop insurance policy

When the time comes to actually select a crop insurance policy, here are some of the major factors you should consider. 

The first, and most obvious, factor to consider is your need for risk protection. Obviously, this will vary greatly depending on your geographical location, as weather conditions, diseases, and likelihood of drought or freeze vary by state.

Another factor influencing risk protection need is the crop(s) you’re growing. Certain crops are more subject to price fluctuations than others, and specialty crops that require special equipment may also be more expensive to replace if the equipment is damaged. 

Then there’s the overall financial position of your operation. Are you in a place where you can absorb moderate risk, or would a single incident set the operation back too far? The answer to that question will also depend greatly on your own risk tolerance. 

As we described earlier, there’s significant variability in the product offerings and coverage levels. Understanding your own risk protection need can help you choose the right policy option. 

Unit structures will impact the size of the premium that you’re responsible for paying. Different unit structures are more or less advantageous depending on your operation.

For most crop insurance unit structures, different parcels (or units) of land are insured separately from others. This means that an individual farm may be divided into several units based on:

There are four types of unit structures available under various types of crop insurance coverage:

Basic units insure a farmer’s operation by share

Optional units enable you to claim a loss in one unit, even if the others are unaffected

Enterprise units cover all insurable acres of a given crop within the county

Whole farm units enable farmers to combine their units and insure the operation

There are pros and cons to each of these approaches, and the one you choose depends heavily on your risk tolerance, operational structure, and the availability of these unit structures from your policyholder. 

Some farmers opt for group insurance policies like Area Risk Protection Insurance (ARPI). These can provide a lower-cost alternative to traditional crop insurance policy.

ARPI policies pay indemnities based on county production averages, rather than individual farmers’ yield histories. This can be a helpful option for newer farmers, as well as farmland with low yield histories. 

4. Integration with overall crop marketing strategies

It’s also important to consider how your crop insurance product may complement or substitute your crop marketing strategies, especially when it comes to price protection. Revenue insurance products, for example, provide some level of price protection. Yield-based insurance, however, does not. 

Every farm is unique, which means you may need to consider special features for your operation. These can include provisions related to:

Many specialized farming practices aren’t covered under traditional crop insurance policies, which means you have to ensure they’re added in. Otherwise, you’ll expose yourself to undue risk. 

Final thoughts on crop insurance policy questions 

Choosing a crop insurance policy is a juggling act between high protection and high premiums. The right balance is going to vary by operation. That’s why it’s important to understand the ins and outs of the various policies available—as well as the ins and outs of your land.

Interested to learn more about CommonGround Insurance Group’s dedication to bringing your operation the most comprehensive insurance products? Contact Crop Specialist, Trevor Froehling, 815-883-1033 or trevor@commonground.io.

Join our CommonGround Community and be part of the movement to reshape the future of land management.

If you’re considering updating your crop insurance policy for the next season, here are 5 crop insurance policy factors you should definitely keep top of mind. 

5 Factors You Should Consider in Your Next Crop Insurance Policy

Regardless of which crops you grow, your productivity greatly depends on the quality of your soil. Seed quality, crop protection, irrigation—the benefits of these methods are minimal if you have bad soil.

To farm effectively, then, you need to understand your soil quality. When you consult with your agronomist, here are some factors to consider and questions to ask. 

The importance of an agronomist in your farm operation

Farming is an ever-changing process, often centering around technology that didn’t exist even a few years ago. As a farmer, it can be challenging to keep up with all the shifts and changes—which is why having an agronomist on your side can be invaluable. 

Whether you’re an experienced or brand new farmer, you don’t know what you don’t know. Given the narrow margins you’ll likely face this year, basing important farming decisions on an incomplete knowledge base is incredibly risky. 

Agronomists, especially those familiar with your particular climate, soil, and region, can help you with key farming decisions, including:

When you work with an agronomist partner, you’re eliminating guesswork and hunches and, instead, making decisions based on objective, verifiable data.

This level of insight and decision-making can significantly improve your yields & productivity. In some cases, you could return three to four times what you spent on agronomy services. Nearly every farmer in America would agree that’s money well spent. 

If you’re leasing farmland, you may be able to make the case for splitting agronomy costs with the owner. When you invest in taking better care of farmland, the end result is a more valuable asset for the landowner. And if you have a crop share agreement, you can increase the overall profits split among all parties—it’s a win-win. 

Soil testing: why should you do it and how often?

Once you’ve made the decision to work with an agronomy partner, one of the key areas they’ll look at is soil quality. Regular soil testing is important for a number of reasons, all of which your agronomist will be intimately familiar with:

Protect the environment from contamination, typically caused by runoff and excess fertilization

Improved diagnosis of plant culture problems

Saving money by conserving energy and applying only the amount of fertilizer needed

Generally, soil testing should be part of your lease agreement and conducted once every 1-3 years. When your agronomist conducts a soil test, they’ll generally look for potential nutrient deficiencies, pH imbalances, or excess soluble salts. 

When your agronomist tests your soil quality, the results can indicate a number of different issues. Often you’ll have to rely on their expertise to parse out what’s causing the issue and what the impact can and will be. Here are some of the most common factors that impact soil quality.

The parent materials of the soil set the groundwork (no pun intended) for how well plants grow in the soil and which are most likely to thrive. Parent materials can run the gamut, including till, loess, lacustrine, outwash, and more. 

Exposure to the elements will have a major impact on soil quality. Temperature and precipitation, for instance, influence how fast parent materials weather, which impacts mineral composition and organic matter content. 

Another factor at play is moisture index, or the level of moisture in the soil. The higher the moisture index, the higher the rate of chemical weathering which moves minerals deeper into the soil profile. This can significantly impact management practices, including drainage and inputs of mobile nutrients. 

Nearly all soils are rife with organisms, ranging from bacteria to gophers and surface vegetation (i.e. weeds). Depending on which organisms are more present in the soil, they can speed up or slow down soil formation. Microorganisms, for example, can facilitate chemical reactions and excrete organic substances that improve water filtration in the soil. 

For farmers, one of the major factors that impacts soil quality is use of the land and your farming practices—crop types, rotation patterns, fertilizers used, crop protection, etc. Understanding your soil quality will help you understand which practices are beneficial, which ones are hurting the land. 

The development of soil isn’t directly related to chronological age. As we mentioned earlier, other factors can significantly speed up or slow down the formation of the soil. So you’ll need to test the soil to make sure its chronological age matches its formation age. 

If you rely on old information or hunches, you run the risk of misaligning your perception of the soil quality with reality. This can lead to serious consequences for your operation. 

Questions to ask your agronomist about soil quality

Asking your agronomist highly technical questions about soil quality may be an interesting intellectual exercise, but likely will have little impact on your farming decisions. 

The agronomist is an expert in the soil, but you’re the one who actually farms the land. As such, it’s important that you work with your agronomist to determine which actions are needed based on what they uncover from the results of your soil tests. 

Some of the key questions you can ask include

What steps can we take to further support our crops and increase productivity?

Are we engaging in practices that are harming the soil, and how do we stop those?

What is our short- and long-term plan to enhance soil quality? 

Final thoughts on working with an agronomist on soil quality

When you partner with an agronomist on your farming operation, you base your decisions on reality, not guesses or hunches. Nowhere is this more important than in your soil quality. If your perception is off-base, it can seriously hamper your crop productivity.

Most of the time, your landowner will have soil testing requirements already in your land lease agreement. Rather than engage in a strictly transactional relationship with an agronomist, lean on them for their expertise. Both you and the landowner will be thankful for it.

If you’re looking to pick up new ground for your growing operation, check local listings on the CommonGround marketplace right here. 

If you want to maximize your soil quality, here’s how to work with an agronomist partner and improve yield, productivity, & profitability. 

How to Partner with an Agronomist to Maximize Soil Quality

As the 2023 crop season moves into the home stretch towards harvest, it is actually the appropriate time to think about 2024.  For landowners and tenants, thinking about next year’s farm lease is one of the key considerations to give some thought to well in advance of spring planting.  And if either party is thinking about making changes to the leasing arrangement or terms for the coming year, by law and by practice, there are reasons and specific timeframes to initiate those discussions.

Most states have legally defined times that an owner or tenant of a farm is required to give notice to the other party if they are terminating or changing the leasing terms.  Cropland leases typically run from March 1 to February 28th and for some states, November 1st is the legal notification date.  Written leases normally have termination or notification date language which needs to be followed by owner and tenant.  Lacking written terms, public rental laws and requirements of the state where the farm is located take precedence.  Iowa has one of the earliest official notification dates for farmland leases if changes are to be made and that is September 1.

The early notification date prior to Midwestern harvest makes good business sense in addition to the legal requirements.  When I farmed, I was already making plans in August for the following year’s crop including reviewing soil tests, planning fertilizer applications and what type if any after harvest fall tillage was to be done.  I also was planning any repairs to terraces or waterways along with any new improvements that had to wait until the crop was harvested.  Knowing if I was going to rent the farm in the fall for the next year was the first step in setting the stage for a successful and productive season.

As a landowner, the early notification time and negotiations for next year prompts consideration of the lease terms and needs of the farm.  As a professional farm manager representing the landowner, preharvest was a great time for me to not only talk with the tenant about crop prospects and harvest plans, but it was the time to discuss potential changes in the leasing arrangement.  The early discussion provided time and flexibility to work through changes and differences.  I always respected the farmers I worked with and wanted to build a good relationship with them for the benefit of the owner and they as the tenant.  The last thing I wanted to do was surprise them at the last minute with lease discussions.

Many farms are rented through verbal leases in which the terms were agreed to in the past and either carry over year to year or are talked about and changes made without anything put in writing.  If a landowner wants to make changes to or terminate a verbal leasing arrangement, the September 1 date is most appropriate even if not legally required by a state.  

Even though some states have later notification dates surrounding farm leases, I believe it makes good business sense to always opt for earlier than later.  For instance, in Illinois, the official termination notification date for a written farm lease is November 1st.  As a farmer and a farm manager, that date is too late to be fair to both parties of the lease.  Harvest is usually done by then and the farmer has started preparations on the farm for next year.  It is much better to know ahead of time than after the fact if there are changes to be made.  

There are variations to notification dates and these normally are based on the type of crop grown.  In Kansas and other winter wheat states, it is more common for leasing discussions for the next crop year’s lease to be held in May before summer harvest of the current crop.  The reasons for the earlier date are similar to those delineated above, just that the growing season of the crop is different than the more widely grown corn and soybeans.

Early discussions about next year’s leasing can include keeping the terms the same, changing the amount of cash rent, changing the type of arrangement (crop share to cash rent, fixed cash rent to flexible cash rent, etc), putting in terms to foster soil health practices, delineating how carbon credits, if any, are handled, and any cost sharing arrangements for planned farm improvements. These and more can be brought up by either the landowner or tenant.

Being mindful of notification dates in farm leasing not only meets legal requirements, but more importantly, it fosters a better relationship between farmer and landowner which helps make a more productive farm for both.  

Discover the importance of early planning for next year's farm lease. Learn about legally defined notification dates for terminating or changing leasing terms, and how early discussions can foster a productive relationship between landowners and tenants.

Preparing for Next Year's Farm Lease: Understanding Notification Dates and Considerations

When farmers talk about insurance, the conversation typically centers around crop insurance exclusively. While this is important and certainly should be part of your risk management strategy, your crop is not the only asset exposed to risk.

In this article, we’ll walk through some of the other types of insurance you’ll need to consider, and how to evaluate which private farmland insurance products will most benefit your operation. 

Why should you insure your farm operation?

Let’s start with the basics: why should you insure your farmland? At the end of the day, your farm is a business, and businesses of all kinds are exposed to risk by their very nature.

In addition to the financial risks inherent to any business, farming includes additional, unique risks:

Weather damage & impact on crop productivity

Volatile commodity markets impacted by global climate and geopolitical factors

Expensive equipment that can be difficult to repair or replace

Heavy cost burdens and debt incurred by farmers on a cyclical basis

In farming, you could devote time and financial resources into the business, and a derecho or drought hits, impacting your chance to break even.

2023 specifically shows an increase in the breakeven price for corn and soybeans, driven primarily by high input and production costs. Although 2023 promises a better outlook than 2022, margins are narrower than many farmers are comfortable with.

This means that even “minor” risks could severely impact your operation’s ability to stay afloat. As such, you need to consider insurance that protects various assets at your disposal:

Crop insurance alone will not protect you from inherent farming risks. When considering which insurance products you need to purchase, look at the whole of the operation to determine exactly what you need. 

Private insurance products vs. USDA insurance

Nearly every U.S. farmer is familiar with the USDA Risk Management Agency (RMA) and the various crop insurance products they offer. Since the 1930s, this program has been instrumental in protecting farmers against losses due to adverse events including:

From 2000 to 2021, the Federal Crop Insurance Program (FCIP) covered 82% of eligible acres among producers of barely, corn, cotton, flaxseed, oat, peanut, potato, rice, rye, sorghum, soybean, sugarbeet, sugarcane, sunflower, sweet potato, tobacco, and wheat. USDA also provides coverage for certain types of livestock. 

However, while crop insurance is an invaluable risk management tool for agricultural producers, it covers, as the name suggests only crops. Additionally, although most crops are covered under FCIP, it is by no means universal. Certain specialty crops are excluded from the program, although RMA regularly conducts pilot tests among new crops.

If you want comprehensive coverage for your entire operation, namely land, buildings, and equipment, you have to go beyond public crop and livestock insurance. This is where various private insurance products come into play. 

What types of private insurance products are available to farm operations?

Private insurance for farm operations comes in all shapes and sizes. You can start with basic, bare-bones coverage, then add additional coverage depending on your needs. And these policies can become quite detailed, including several dozen categories of perils to cover. 

Under most private farm insurance plans, only personal property directly related to the operation are covered under your plan. Generally, these are broken down into the following categories (although, keep in mind the exact breakdown may vary depending on your insurer): 

Farm products such as seed, silage, animal feed, fertilizers and pesticides

Here are some of the private insurance products you should adopt to protect your farming operation from undue risk.

Homeowners insurance or dwelling coverage

Although your crops are covered by USDA, your home is not. Most farm insurance plans will include the option to insure your dwelling for both owner-occupied and employee-occupied dwellings. Generally, a good plan will cover 80% or more of the replacement cost value. 

If you can’t cover your dwelling under your plan, you’ll need to purchase homeowner insurance separately. 

Replacing or repairing damaged farm equipment can be expensive, and you don’t want to slow down the operation because you can’t cover the cost. Most private farm insurance products will cover financial loss or damage of machinery due to covered perils.

This includes the whole range of equipment, including:

In some cases, if you use a truck for farm work, you may be able to bundle a commercial auto insurance policy into your farm insurance policy for ease of payment. 

In addition to your primary dwelling, you’ll need to insure other structures on your property. These can include barns and other storage, grain bins, livestock housing, etc. Typically, fencing is not included under farm structure coverage. 

In the event that your livestock are killed or injured as a result of a covered peril, you can purchase coverage that generally covers anywhere from 2.5-5% of the value of the animal. 

You can also purchase coverage for feed, grain, seed, and similar items. However, the coverage only lasts while the products are stored—so crops and seed that’s already in the ground won’t be covered. 

Because of the inherent risks at hand in running a farm operation, every farm insurance policy will require liability insurance. Generally, this will cover:

Attorney’s fees associated with covered incidents

Additionally, if you employ anyone in your farm operation, you likely will have to purchase insurance for potential employee liability situations and workers compensation. Some states may also require you have a workers comp policy in place if you have two or more employees. 

Final thoughts on private insurance products for farm operations

Although USDA provides robust crop insurance products, they only cover part of your farming operation. A robust risk management strategy should cover more than just crops—buildings, equipment, farm products, and more. 

Crop insurance from USDA only covers so much of your farming operation. To protect yourself from risk, consider these private insurance products.