Reclaiming land for haying

[tcurry]

I need info please!
I have 45 acres in central Arkansas that has not been hayed for about 8 years. A guy wants to reclaim it for haying rights. We are still negotiating but here are the basic terms:

He will bulldoze/bush hog and prepare land, fertilize/seed etc.
At no cost to me but he gets to hay this property for the next 5 years at no cost to him.
Then we terminate or renegotiate.
Can someone tell me deal or no deal? Or maybe tips or tricks to determine how to get a fair shake.
Thanks!

 

[rocfarm]

I'd analyze the soil type and productivity first. See how many bales per acre per year and the profitability of hay, then look how much I'd pay to clear it myself vs hire someone vs him doing it. Then I'd look at the value of whatever he was going to leave out there (improved Bermuda?) at the end of the five years as well as any bump/reduction in land value as a result of clearing the land.
Only then would I make a decision.

 

[Travlr]

I need info please!
I have 45 acres in central Arkansas that has not been hayed for about 8 years. A guy wants to reclaim it for haying rights. We are still negotiating but here are the basic terms:

He will bulldoze/bush hog and prepare land, fertilize/seed etc.
At no cost to me but he gets to hay this property for the next 5 years at no cost to him.
Then we terminate or renegotiate.
Can someone tell me deal or no deal? Or maybe tips or tricks to determine how to get a fair shake.
Thanks!

I'd put a performance clause in based on some kind of small share, or some other way to get the guy off your property if he doesn't perform.

If the guy can be interested in some kind of share arrangement after the five years, because he's already giving you a small share and is used to it, that could be beneficial too.

 

[Warren Allison]

I need info please!
I have 45 acres in central Arkansas that has not been hayed for about 8 years. A guy wants to reclaim it for haying rights. We are still negotiating but here are the basic terms:

He will bulldoze/bush hog and prepare land, fertilize/seed etc.
At no cost to me but he gets to hay this property for the next 5 years at no cost to him.
Then we terminate or renegotiate.
Can someone tell me deal or no deal? Or maybe tips or tricks to determine how to get a fair shake.
Thanks!

What kind of income have you been getting from it the last 8 years? I don't see how you can lose. If he is gonna clear 45 acres, seed or sprig 45 acres, fertilize and lime 45 acres, that is a chunk of change, could easily hit 5 figures over 5 years.

 

[Little Joe]

I need info please!
I have 45 acres in central Arkansas that has not been hayed for about 8 years. A guy wants to reclaim it for haying rights. We are still negotiating but here are the basic terms:

He will bulldoze/bush hog and prepare land, fertilize/seed etc.
At no cost to me but he gets to hay this property for the next 5 years at no cost to him.
Then we terminate or renegotiate.
Can someone tell me deal or no deal? Or maybe tips or tricks to determine how to get a fair shake.
Thanks!

I would want something in writing stating what the expectations are of continuous liming and fertilization so that he doesn't further deplete it. I doubt that would be the case with him spending that amount of effort to bring it back. Being here in central Arkansas chicken litter should be readily available, I might require to be littered occasionally to build top soil long term.

 

[Ouachita]

Assuming you don't need the land for anything else, that deal could be great for both of you. I would include a provision for him to supplement the soil at year five, before any further extension or agreement (lime and fertilize as necessary to benefit the next years growth).
It'll demonstrate whether or not he's serious about the first five years, and if he's in it for the long haul.

 

[Brute 23]

That seems like a smoking deal.

I'm trying to figure out he is going to make that pay? It must be in pretty good shape already.

I don't see how you could do the same with generated income from it. Especially after the tax man gets his cut.

 

[rocfarm]

That seems like a smoking deal.

I'm trying to figure out he is going to make that pay? It must be in pretty good shape already.

I don't see how you could do the same with generated income from it. Especially after the tax man gets his cut.

Might be surprised, especially if inflation keeps up. I thought my friend was nuts to put in solar panels at those prices prepandemic, but with the massive inflation and the huge jump in energy prices, he's made out like a bandit. And everyone knows what land prices have done in 3 short years.

If the guy's an experienced hay expert, already owns his equipment and it is close to the 45 acres and the land will give 3+ cuttings of high-quality hay each year consistently, he might be the one making a lot, especially if hay prices don't come back down as much as we would expect.

But business is risk.

 

[Brute 23]

Might be surprised, especially if inflation keeps up. I thought my friend was nuts to put in solar panels at those prices prepandemic, but with the massive inflation and the huge jump in energy prices, he's made out like a bandit. And everyone knows what land prices have done in 3 short years.

If the guy's an experienced hay expert, already owns his equipment and it is close to the 45 acres and the land will give 3+ cuttings of high-quality hay each year consistently, he might be the one making a lot, especially if hay prices don't come back down as much as we would expect.

But business is risk.

I get that but most people seem to be acting as if the op needs some kind of tight contract or to watch out for some thing. I see it as the opposite. I have done those deals and I'm the one bringing the tight contract because I have everything to lose. The op/ land owner is pretty much all upside.

If I was doing that deal, which I have on dozing out leased land, it would be 5 years toward lease and 5 year option with pre-agreed on lease terms. I'm not letting them bid me against the market in 5 years after my risk.

 

[callmefence]

If he's reputable jump on it before he changes his mind.

 

[rocfarm]

I get that but most people seem to be acting as if the op needs some kind of tight contract or to watch out for some thing. I see it as the opposite. I have done those deals and I'm the one bringing the tight contract because I have everything to lose. The op/ land owner is pretty much all upside.

If I was doing that deal, which I have on dozing out leased land, it would be 5 years toward lease and 5 year option with pre-agreed on lease terms. I'm not letting them bid me against the market in 5 years after my risk.

Must admit you have more experience.

Just saying things have been crazy. That same friend bought 50 acres four years ago using a loan. Thought he was crazy to do that, too. But then interest rates went to 2.8 percent, he refinanced his house and paid off the land and those solar panels, and everything went up. He's basically just got to save cash for retirement now as his future retirement recreation and house are pretty much taken care of, and he's 44!

But in general, I agree with you. If the man renting the 45 acres is going to clear the land, that in-and-of itself might be a steal, especially if that increases the land value.

But this is the kind of thing I'd say break out the spreadsheet for.

 

[simme]

A little more information might be helpful. Sounds like this was a hayfield 8 years ago. What shape is it in today? It would not seem that there would be much need for a dozer in just 8 years. Maybe just a little time with a skid steer or small excavator to get a few trees. What grass is there now? It may be that there is already grass there that just needs shredding, some herbicide and fertilizer. Maybe lime, but if the field was productive 8 years ago and no fertilizer used since, I would expect lime may not be needed. Even a trace amount of existing bermuda would be adequate with some fertilizer. Description mentions preparing land and seeding. Is that required? Maybe it is grown up in briars and privet with no grass left in which case there is a good amount of work to be done and money to be spent.

Regardless, the land is not being used and will continue to grow up. Sounds like most all the risk is on the guy that wants to use it. The landowner just can't use it or sell it for 5 years. Otherwise, he benefits from free land improvements.

I think it would be beneficial to both parties to have a general agreement about the work to be done and the use of the property, hay only, grazing allowed, etc. Just to prevent any misunderstanding or miscommunication. Other issues should be understood - hunting, recreation, who gets any government program money and such. Owner spends no money and ends up with a productive hay field in 5 years - not much downside for an owner not currently using the property.

 

[greybeard]

If the man renting the 45 acres is going to clear the land, that in-and-of itself might be a steal, especially if that increases the land value.

Rent implies a landowner gets a monthly or annual payment.
I didn't see anything that states the hay guy is renting the land from the landowner.
As I read it, the landowner gets currently unused and grown over land turned into or back into, a productive hay field and, gets nothing else. (for a 5 year period)
(Not saying getting the property improved is nothing)

 

[BFE]

Pictures would help. As Simme said, 8 years shouldn't be too wild yet.

Put it in writing, we all know what assuming makes us.

 

[tcurry]

Thanks everyone! i couldn't really see a downside either. Thought I was missing something. If all goes well he can hay it for as long as he wants afterward. Maybe a win, win.

---

 

[Travlr]

" i couldn't really see a downside either. Thought I was missing something. If all goes well he can hay it for as long as he wants afterward. Maybe a win, win."

It seems like you are missing something.

Unless you have some kind of deal with the Devil you are still paying property taxes... at the very least. Your land is worth something. And the guy raising crops is not improving your soil as much as depleting it. This is the nature of plant agriculture.

You can make a mutually beneficial deal... but that means YOU get something of value too, not just him.

And again, some kind of performance clause is advisable. You don't want some guy that changes his oil by dumping it in your fields, destroys fences, uses your property as a dump, or cheats you from any kind of payment without a way to remove him.

 

[coachg]

I'm with Warren , i think you are coming out to the good on the deal . I would want it in writing. I've done something similar this past year . We had bad tornadoes back in 2011 . An older neighbor had a lot of trees down on his farm that joins our pasture. He got sick and died a few years back without getting it all cleaned up . His 2 sons inherited the place , about 18 acres in pasture . We have pushed up all the down trees and stumps and rebuilt one side of the fence . I have all but 1 of the piles burned . We haven't formally agreed on how long we get it rent free but the sons have no interest on running cattle on the place and are overjoyed over getting the place cleaned up . I've asked for 3 years but they are talking even more .

 

[rocfarm]

" i couldn't really see a downside either. Thought I was missing something. If all goes well he can hay it for as long as he wants afterward. Maybe a win, win."

It seems like you are missing something.

Unless you have some kind of deal with the Devil you are still paying property taxes... at the very least. Your land is worth something. And the guy raising crops is not improving your soil as much as depleting it. This is the nature of plant agriculture.

You can make a mutually beneficial deal... but that means YOU get something of value too, not just him.

And again, some kind of performance clause is advisable. You don't want some guy that changes his oil by dumping it in your fields, destroys fences, uses your property as a dump, or cheats you from any kind of payment without a way to remove him.

And some herbicides stick around for a long time! And if there's slope, your soil could wash away if precautions aren't taken. So be thoughtful. Lots of good posts here.

 

[greybeard]

Pictures would help. As Simme said, 8 years shouldn't be too wild yet.

Maybe. Depends what is down in the seed bank and what is surrounding the old hayfield. I had a place logged and cleared in late 2008, got the leftover crap piled by late 2009 and then Got busy with my house build and getting the yard fenced off from the pasture and got a bit behind keeping the far portion mowed or sprayed. By late 2010, the very back part of that newly cleared land looked like this:

Some of that I could barely get the tractor over and the bush hog took a beating.


(The growth to the left of the tractor is an unburned brush pile)
You can take land from nature but nature ALWAYS wants it back..

 

[Davemk]

I need info please!
I have 45 acres in central Arkansas that has not been hayed for about 8 years. A guy wants to reclaim it for haying rights. We are still negotiating but here are the basic terms:

He will bulldoze/bush hog and prepare land, fertilize/seed etc.
At no cost to me but he gets to hay this property for the next 5 years at no cost to him.
Then we terminate or renegotiate.
Can someone tell me deal or no deal? Or maybe tips or tricks to determine how to get a fair shake.
Thanks!

You should have said deal before he got back in the truck.