Question about sharecropping Hay

Good Morning,

I have a question for you guys as I don't know the answer. I have rented hay ground and baled some hay on shares in the past but I haven't planted
new fields in a shares situation and I'm trying to come up with a fair deal for everybody involved.

I have a new neighbor that has moved in and wants me to establish a new hay field on a 8 acre parcel that was in soybeans last year. It will be
100% my equipment to work and plant the land and my equipment to harvest the hay. In this type of situation who would pay for the seed and
fertilizer. I was thinking he would pay for the seed and fertilizer and I was get a share of the hay when I used my equipment to bale the hay.
Like I said I'm new to this type of thing and I don't want to screw myself or the new neighbor.

He also wants me to establish a new hayfield on a piece of ground that has not been worked in 10 years. He said he would pay for the fertlizer and
Lime to get the land back up to appropiate nutrient levels. This again will be me plowing, working, and planting.

Any info would be great

Joe

Around here it was typical for the landowner to pay for alfalfa seed if he wanted it seeded down, the renter paid for everything else. Otherwise the renter needed at least a 3 year contract to recover the cost of seeding.

Don't know, the only time I ever did hay on shares it was on previously established fields. As others have stated you need to have a longer contract to recover the costs OR maybe you take all of the hay for the first year? I would find out what the yearly rent on hay ground is and estimate your costs and yields see what makes you whole again after the outlay to establish the field is paid OR have the landowner pay for some of the inputs.

and why would you do this ? your land , your equipment, your labor , and your going to share this with someone for the price of fertilizer and lime ?

You're combing two things together in my opinion.Planting the fields,getting grass etc should be on his dime period.Then cutting the hay using your labor and equipment is when you
two split up the hay.

Because it is not his land. At least that is the way I understand the OP here.

jt

I agree. It almost sounds like hiring someone to do some custom farming if you are doing most all of the work.

Yea I guess things are different in different places but I get all the hay land to cut I want for free so the landowners can get a real estate tax break.The most any landowner will get with top quality hay is about 1/3 of the hay.

I've share cropped hay fields but not established someone else' land. I agree with others that the establishment is strictly his responsibility. How he pays you for the equipment and labor is negotiable. I would calculate a per acre charge for your work and determine how long your lease needs to be to recover the cost.

I have the same situation- I bought ground that had not been taken care of for many years- neighbor did everything including tillage, fertilizer and seed, he got all the hay for the first two years, then I get a third after that. He (and I) are hoping he can buy the place.

I'd put a pencil to the costs and expected yield. You could purchase all the seed and fertilizer and take 100% for a couple years, then a share after that. Lots of variables. You just have to figure out what is fair to you. If the land owner agrees that's fair to him you have a deal. If I had a more than one year agreement I sure want it on paper.

I guess this depends on where you're at and what hay is worth.... Around here... if there was to be any shares the landowner would be expected to shoulder whatever percentage of the operating costs they want as their share. When you take out your costs for the gear that doesn't leave a whole lot...
I would think at minimum if he wants a 'share' he'd better pony up for seed, lime and fertilizer (annually) if he wants much of anything. 'Rent' on hayland around here is a non-existent concept. We cut the fields to keep the woods at bay and maintain the tax free status on ag land for them.

Rod

Can 't add much on the financial end but I would want some longer term agreement like 5 years.

I can remember when haying on the shares was a 50/50 deal - but IMHO, times have changed.

I don't think 50/50 is necessarily a square deal - if it's one sided - you pay all expenses and split evenly the yield.

I think you look at the cost of doing business, wear and tear on the machinery, lime/fertilizer, etc., diesel, twine and whatever taxes you have to pay - like income tax, etc. if you are selling the hay and labor. Once you get that overhead out of the way of the way, then maybe whatever's left over might be split 50/50.

In my mickey mouse hay operation where we sell everything. Half of the $$$ are donated to a good cause - my Dad to help him with the taxes on the place and the other half set aside to help with my kid's education expenses (and some pocket money for them too). The one thing I don't want to do (as much as I love and respect my Dad) is have him winding-up with more $$$'s for the split than the guy making the hay, providing the equipment and labor - so we factor in the above expenses and then make the split. It's fair and everyone's happy.

BTW - I get nothing financially out of the deal - nor do I want it - except I am the one in the tractor's seat while the field hands (my boys) are loading the wagon... ;-) Life's good when you are driving a tractor - right?????

Bill