# Leasing Land with Coastal Bermuda



## davang (Apr 7, 2010)

I have contacted a guy who has 20 acres of essentially bermuda hay on it. This is in Texas, gulf coast area. He is from the Houston and bought this land for "FUN" and would let me use it for several years and has agreed in principal to lease it to me. I do only square bales. I was thinking of basically paying him $1.50 per bale. I would pay all the costs of fertilizer etc. and of course the labor. Is that too high? Or, should I go with a flat fee and pay him monthly?

Jeff


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## deadmoose (Oct 30, 2011)

What will/could it yield? Sounds awfully high to me. 4 tpa of 50# bales is $240 an acre.


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## hay wilson in TX (Jan 28, 2009)

Sounds reasonable to for the owner.

If it is any good at all that will be 125 bales/A of 60# bales probably 4 cuttings a year.

Devide the land into 4 blocks and cut one 5 acre block at a time.

Depends on the native fertility of the ground. Do not have more than 2 blocks on the ground at one time.

Have the rent cut in half that amount for rained on hay. Maybe by two thirds for rained on hay.

Agree to revisit the cash agreement after each season.


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## CBarM (Mar 1, 2015)

If it was me I'd offer a flat per acre lease. I like doing it the best if he will. Depending on how much he knows many will let you have it for free long as you keep it in AG for them for tax purposes. Other than that I try to get mine for 8\10$ an acre and sign a contract if you can.


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## Tim/South (Dec 12, 2011)

I am not sure a lease agreement paying by the bale is a good deal. I turned down a Bermuda deal with me paying all the fertilizer and paying so much a bale. The more I would spend on fertilizer, the more money I would be paying the land owner.

How much does a square bale of Bermuda sell for in your area on an average year? I think 100 bales per acre per cutting is what a lot of people figure on Bermuda on 4 cuttings. Some will depend on how heavily fertilized it is and what kind of Bermuda.

Around here the going custom rate to cut, rake and bale is around $2 per bale. You need to pay yourself that much. Add the cost of fertilizer and the $1.50 per bale paid to the owner and there is not much actual profit. You may sell some in the field or have to deal with hauling and storing the hay.

I would hate to cut 20 acres, get 2,000 bales and have to pay out $3,000 before I made a dime toward my expenses. Do that 4 times a year and the owner is getting $12,000 per year rent.

I would start by offering the owner twice what his taxes on the property are (if he is paying Ag tax rates). He bought the property to play with and may not need the income. Adding lime and fertilizer, building the soil and keeping it clean and in production is worth something.


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## davang (Apr 7, 2010)

Thanks guys I appreciate your advice. $1.50 does seem high now. I had a guy that leased some land that I bought and I let him finish out the season. He was doing a 70-30 split with the previous owner. He was rolling it and I guess after he sold the hay he gave the guy 30% after expenses. How I arrived at the 1.50 was estimating 50 bale/A x $5/bale selling that's $2500 then taking the 30%. But that doesn't consider my EXPENSES. So I definitely need to rethink this. He sounds like he would rather get regular cash payments then have to wait on the baling process. Pastures to lease around here are scarce, there's several "full-timers" that have everything sewn up. But this guy doesn't know that I don't think. They didn't even get anybody to shred it last fall, just let it grow out.


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## somedevildawg (Jun 20, 2011)

Way high......40-60pa depending on a few other things.....


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## Tim/South (Dec 12, 2011)

somedevildawg said:


> Way high......40-60pa depending on a few other things.....


That would be a good deal for both parties around here. The owner gets $800 - $1,200 per year and frees up some coins to buy fertilizer and fuel.

Some one with the equipment, expertise, means and ability to manage property is a valuable asset. A land owner may look at a yield and think the person leasing is making a killing in profit. If that was the case then everyone would be doing it.

We all know people who have made it look good on paper, tried it and did not last a second season.


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## Mike120 (May 4, 2009)

Way high. You are helping him keep the land in Ag. If you want to give him something, offer to pay half his tax bill on the land.


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## dubltrubl (Jul 19, 2010)

I agree, way high. I much prefer a straight rent or lease provided there is a guaranteed time. 3-5 yrs. is a good starting point. Keep in mind you'll probably have to build things up the first couple of years. I don't like a split unless I can have control. I do some on a 20/80 split just like a lot of bean and rice farmers around here. I do all of the amendments and work and they get 1/5th. This way I can control the quality and amounts of inputs. If you're taking all of the expenses including inputs and you're raising for quality and yield, you're going to be well over $2/sq. bale before you even hit the field on cutting day. Given Bermuda in the LA/TX area is anywhere from $5-$8 a bale you're not going to have much left over if you give him $1.50/bale. If you have something go wrong, (broken equipment, rain, drought, etc.) you'll be in the hole pretty quick.


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