Considering Hiring a Farm Manager?

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Though many landowners choose to directly manage the business affairs of their own farms, some hire experienced intermediaries as farm managers. This is more often the case if the owner lives far from the land and finds it difficult to make periodic site visits.

Depending on the needs of the landowner, farm managers can oversee all aspects of managing the property, or specific tasks, such as negotiating a crop lease. Typical farm management services include: selecting a farm operator, evaluating lease alternatives (from fixed cash lease or flexible cash lease to higher risk/reward custom operator arrangements), negotiating lease terms, making farm visits to ensure lease provisions are being followed and that your land is being properly farmed; overseeing building or land improvements; supervising input purchases and crop marketing; reviewing and paying expenses; securing insurance and signing-up to participate in government farm programs; preparing an annual budget, crop progress reports, and financial reports.

Farm management fees typically range from 5% to 10% of annual gross rent revenue or net proceeds from crop sales, depending on the local competition among managers, lease type and range of services. As cash rents have moved up in recent years on rising crop prices, farm management fees have also risen. To learn more about this dynamic, read our analysis: Farm Management Fees Spike; Time to Press the Reset Button?

Public institutions often solicit bids for farm managers. Though price shouldn’t be your primary criteria in choosing a farm manager, inviting multiple managers to bid for your business can boost your bottom line. For more on the value of soliciting competitive bids from farm managers, read It Pays to Bid the Assignment.

Many farm managers derive substantial income by also working as real estate brokers or have financial agreements to steer clients to specific brokers. For more insights into the importance of ensuring your property is publicly advertised and exposed to local and regional brokers, read our article on Insights into the Shadow Market.

Some farm managers work independently, while others are affiliated with local, regional or national management companies. Many bank trust departments also offer farm management services.

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Though many landowners choose to directly manage the business affairs of their own farms, some hire experienced intermediaries as farm managers. This is more often the case if the owner lives far from the land and finds it difficult to make periodic site visits.

Depending on the needs of the landowner, farm managers can oversee all aspects of managing the property, or specific tasks, such as negotiating a crop lease. Typical farm management services include: selecting a farm operator, evaluating lease alternatives (from fixed cash lease or flexible cash lease to higher risk/reward custom operator arrangements), negotiating lease terms, making farm visits to ensure lease provisions are being followed and that your land is being properly farmed; overseeing building or land improvements; supervising input purchases and crop marketing; reviewing and paying expenses; securing insurance and signing-up to participate in government farm programs; preparing an annual budget, crop progress reports, and financial reports.

Farm management fees typically range from 5% to 10% of annual gross rent revenue or net proceeds from crop sales, depending on the local competition among managers, lease type and range of services. As cash rents have moved up in recent years on rising crop prices, farm management fees have also risen. To learn more about this dynamic, read our analysis: Farm Management Fees Spike; Time to Press the Reset Button?

Public institutions often solicit bids for farm managers. Though price shouldn’t be your primary criteria in choosing a farm manager, inviting multiple managers to bid for your business can boost your bottom line. For more on the value of soliciting competitive bids from farm managers, read It Pays to Bid the Assignment.

Many farm managers derive substantial income by also working as real estate brokers or have financial agreements to steer clients to specific brokers. For more insights into the importance of ensuring your property is publicly advertised and exposed to local and regional brokers, read our article on Insights into the Shadow Market.

Some farm managers work independently, while others are affiliated with local, regional or national management companies. Many bank trust departments also offer farm management services.

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