K-State Research and Extension Western Kansas Cropland Lease Arrangements in 2009 Daniel OBrien Extension Agricultural Economist K-State Research and Extension

II. Farmland Prices & Cash Rental Rates By Region: Southwest, West Central & South Central KS By Land Use: Non-Irrigated & Irrigated Cropland

Kansas Crop Reporting Districts (CRDs) Kansas Agricultural Statistics (KAS) reports average cash rent values for Non-Irrigated, Irrigated, & Pasture land at the CRD level

Non-Irrigated Farmland Prices Southwest, West Central & South Central KS ( )

Non-Irrigated Farmland Cash Rent Southwest, West Central & South Central KS ( )

Non-Irrigated Farmland Rent-to-Value Southwest, West Central & South Central KS ( )

Irrigated Farmland Prices Southwest, West Central & South Central KS ( )

Irrigated Farmland Cash Rent Southwest, West Central & South Central KS ( )

Irrigated Rent + Center Pivot estimate Southwest, West Central & South Central KS ( )

U.S. Farmland Rent-to-Value Trends Kastens & Dhuyvetter (2008)

Irrigated Cropland Leases Scenarios for Southwest Kansas A.Full Irrigation Corn Fully Irrigated Corn: 125 acres Wheat-Fallow Dryland Corners: 30 acres B.Limited Irrigation Corn / Wheat / Sunflower Irrigated Corn: 65 acres Irrigated Wheat: 30 acres Irrigated Sunflowers: 30 acres Dryland Corners: 30 acres Wheat-Fallow

A1: Total Costs & Returns (LL owns CP) Costs, Breakevens & Net Returns

A2: Capital & Labor Costs, Prices Prices

A3: Operator % Contribution (LL owns CP) Landowner Owns Center Pivot Tenant owns Power Unit Equitable Shares Tenant: 67.4% LL: 32.5%

A4: Operators Costs-Returns (LL owns CP) Equitable %Share: 67.4% Landlord owns Center Pivot Positive Returns over Costs (+16%)

A5: Landlords Costs-Returns (LL owns CP) Equitable %Share: 32.6% Landlord owns Center Pivot Positive Returns Over Costs (+16%) Land Return: 5%

A6: Cash Rent Estimates (LL owns CP) 5% on Land Center Pivot Cost Landowners Equitable Share of 32.6% (LL owns Center Pivot) If 100% of Profit goes to Landowner Comparing the 3 Approaches

A7: Operator % (Tenant owns CP) Tenant owns Power Unit & Center Pivot Equitable Shares Tenant: 73.7% LL: 26.3%

A8: Cash Rent Estimates (Tenant owns CP) 5% on Land No Center Pivot Cost Landowners Equitable Share of 26.3% (Tenant owns Center Pivot) If 100% of Profit goes to Landowner Comparing the 3 Approaches

B1: Operator % Contribution (LL owns CP) Limited Irrigation Water Landowner Owns CP Tenant owns Power Unit Equitable Shares Tenant: 64% LL: 36%

B2: Cash Rent Estimates (LL owns CP) 5% on Land, Center Pivot Cost Landowner: 36% (Owns Center Pivot) If 100% of Profit to Landowner Comparing the 3 Approaches

B3: Operator % (Tenant owns CP) Limited Irrigation Water Tenant owns Power Unit Center Pivot Equitable Shares Tenant: 71.3% LL: 28.7%

B4: Cash Rent Estimates (Tenant owns CP) 5% on Land, No Center Pivot Cost Comparing the 3 Approaches Landowner: 29% (Tenant Owns Pivot) If 100% of Profit to Landowner

Non-irrigated Cropland Leases Scenarios for Southwest Kansas A.Wheat – NT Corn - Fallow Rotation Reduced Till Wheat: 53 acres NT Corn: 54 acres Fallow: 53 acres B.Wheat – Fallow Rotation Reduced Till Wheat: 80 acres Fallow: 80 acres

2009 Wheat – Corn –Fallow Budget

Wheat-Corn-Fallow Equitable Share% Equitable Shares Tenant: 73.2% LL: 26.8% Landlord equitably shares Fertilizer & Chemicals

Wheat-Corn-Fallow Cash Rent Estimates 5% on Land Landowners Equitable % Share = 26.8% If 100% of Profit to Landowner Comparing the 3 Approaches

2009 Wheat-Fallow Budget

Wheat-Fallow Equitable Share% Landlord equitably shares Fertilizer & Chemicals Equitable Shares Tenant: 63.2% LL: 36.8%

Wheat-Fallow Cash Rent Estimates 5% on Land Landowners Equitable % Share = 36.8% If 100% of Profit to Landowner Comparing the 3 Approaches

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