As a landowner, it’s crucial to not only grasp the current economics of farming but also have a thorough understanding of your farm’s potential. Decision-making with a strong foundation of knowledge and understanding is a powerful starting point in both good times and bad. Currently we are in an environment of increasing input costs with decreasing commodity prices (more than 25%). Uncertainty about tariffs and the timeline of a new farm bill also add pressures to the situation.

The famous quote "It all begins with land" is attributed to Scarlett O'Hara, the protagonist of Margaret Mitchell's novel Gone with the Wind. In both the book and the classic film adaptation, Scarlett emphasizes the importance of land during challenging times, highlighting its enduring value and connection to survival and identity.

How can we best assess our farm properties to meet current (and future) goals and objectives? Let’s take a deeper dive into four key areas for landowners to master.

Mapping Tools to Better Understand the Landscape
We like to start with farm maps to better understand how the property sits on the larger landscape. Reviewing aerial, soil, topography, watershed and proximity maps help to better understand opportunities and challenges of the farm.

There are a couple of easy ways for landowners to collect basic maps of their farm:

• Landowners can request an updated aerial map from your local United States Department of Agriculture (USDA) Farm Service Agency.

• Google Earth is a useful, no-cost tool. In utilizing the Google Earth timeline feature you can see how the farm has changed over the year or perhaps highlight production areas that may continue to cause yield loss.

Peoples Company has developed a proprietary mapping system that lets us readily assess a property through a set of base maps. The software goes farther to identify key farmland insights to relate farm productivity and value to on the county and state level. Alternative energy opportunities, such as solar or wind, are overlayed to show access to potential projects.

FarmWorth allows Peoples Company Land Managers to efficiently access production potential, current land status, and the future capabilities of each farm asset. This information is highlighted in our free Farmland Assessment reports. Landowners interested in receiving a Peoples Company Farmland Assessment are encouraged to request a free report here.

Understanding how water runs across the farm, both above and below ground, is also a critical piece to understand. The key maps we pull for further study include irrigation maps with irrigation equipment inventory, irrigation infrastructure maps, drainage maps, (internal and external) and wetlands maps.

• Internal drainage: This could be internal ditches within the farm and field boundaries and outlets for the farm. This also can refer to drainage tile maps which are much more common across the corn belt than in the Mid-South.

• External Drainage: As a landowner you can do everything in the world to drain your property, but if those drainage ways beyond your farm boundary are not clear and open, they could serve as a bottle neck to properly drain your farm. Maintaining a working relationship with adjoining landowners and local drainage districts is key to making sure drainage issues are minimized.

Leveraging Federal Policies and Programs
The United States Department of Agriculture (USDA) plays a crucial role in overseeing agricultural policies and programs to support farmers, ensure food safety, promote rural development, and protect natural resources. The programs that directly impact today’s producers and landowners are directly implanted through the Farm Service Agency (FSA) and the Natural Resource Conservation Service (NRCS). Most counties across the country have local offices that can help landowners understand the various programs and opportunities that exist.

The FSA office is charged with implementing the current farm bill and any special programs the administration authorizes. There are key records available through the agencies that clarify your farm and are especially useful when leading your farm property.

• FSA Form-156EZ. This form outlines the total acres, the cropland acres, and acres possibly enrolled in other programs such as the Conservation Reserve Program. Understanding how the base acres and yield indexes impact your farm are vital to understand in leasing your farm property.

• Higher commodity prices over the past few years have kept payments relatively insignificant in recent years, but we do expect a resurgence of the various price support systems, as prices have reverted. While the current farm bill has simply been extended the existing farm bill for an additional year, it is our expectation that congress will take this up in 2025 and pass a new farm bill. If reauthorized and reference prices are increased, we could see a significant increase in USDA subsidies once again. These would not only help support rental rates across the country but add some support to land values.

The NRCS office has several important responsibilities:

• Conservation Planning and Technical Assistance: NRCS works with farmers, ranchers, and landowners to develop conservation plans that address soil erosion, water quality, and other natural resource concerns. They provide technical expertise to implement these plans effectively.

• Administering Conservation Programs: The agency manages programs like the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP), which provide financial and technical assistance to promote sustainable land use and conservation practices.

• Soil and Water Resource Management: NRCS conducts soil surveys and monitors water resources to ensure sustainable use and protection of these critical natural resources. They also support wetland restoration and wildlife habitat improvement.

Negotiating Farm Leases
Taking time to reflect on past leases or gathering lease data on a newly acquired farm could also provide key insight into the opportunity a farm might offer. The lease could also reveal some untapped opportunity.

This is also a good time to assess possible lease changes for future years. Leases can be structured in a variety of ways based on an objective as well as to the rick tolerance of a landowner. The lease structure with the lowest risk would be a traditional cash rent, preferably paid up front or secured by a letter to the lease structure with the highest risk factor being direct operation. Other lease types could be a traditional crop share lease where the owners receive a portion of the crop or an emerging favorite of mine being a minimum cash rent or share (whichever is greater). This provides landowner security while providing an upside if prices, yields or both improve.

When negotiating a new lease or a lease change it is always an ideal time to lay out clear expectations between the owner, or perhaps their agent, and the operator that should be maintained throughout the lease. Having a good relationship with producers can help you understand their needs and challenges, which is also a two-way street. You can clearly convey to them your expectations and challenges you foresee.

Trusted Information Sources on the Agriculture Economy
Considering the impact of the current farm economy is also important when reviewing and renegotiating leases. Negotiating a lease during falling commodity prices, uncertainty around trade tariffs, and low commodity prices is a much different scenario than where we were a few years ago.

With an abundance of information available at our fingertips, where do we go for trusted resources? I would suggest the following a few main sources that highlight agriculture production in your area and perhaps the land grant university associated with your state. Many universities have fee tools and calculators you can use to model out how prices and yields are impacting producers’ bottom lines. They are also great resources for up-to-date information on growing conditions, congressional actions like the farm bill that directly impacts agriculture. Another valuable resource can be the commodity groups are directly associated with crops in your production cycle. These groups provide periodic updates and lobby Congress to protect their interest. These insights can be valuable in understating the future of farm policy and how it directly impacts the farm.

Having a clear and concise picture can help you best position your farm for success in 2025 and beyond. Peoples Company has the resources and expertise to help unlock each farm’s full potential. Please contact us today for free farmland assessment.

I would also welcome the opportunity to discuss any of the items outlined and more as to how it pertains to your farm property. Feel free to contact me at 901.483.0373 or gbaird@landmarkag.net.