Acres & Assets | Crop Yields: A Key to Knowing Your Farm

It is an exciting time on farms in the grain belt with harvesting of the crops that have been planned for over many months and nurtured during the growing season.  The production or yield from the crop is the basis of the income generated from that crop and that field for each season.  The yield from the crop also is a key to understanding how well the farm and farmer are doing.  Knowing the yield each year is not only important to the producer, but also the non-operating landowner who leases the land to the tenant.

A farmer needs to know the yield from a farm for financial reasons in order to calculate what their net income will be over and above input costs and rents paid.  For them, it is also a gauge, a report card if you will, of how well they and their agronomists put together the multitude of decisions made about fertility, seed selection, timing of operations, and preventive applications during the season.  Good farming practices can boost crop yields on lower quality farmland above expected averages while poor practices can lower yields on high quality farms. 

The landowner who cash rents their farm to a tenant also needs to know the yield of each crop produced on their farm even if the rent is not dependent on actual crop production.  Yield is an indicator of how productive their farm is and also if the tenant is farming the fields using best practices.  Good yields have to be maintained with proper fertilization and ph levels.  If yields drop relative to what they should be and weather is not the main cause, then there may be a potential of under fertilization and poor agronomic practices.  Getting yield data and fertilizer application records from the tenant are important for the landowner so that they can insure their farm is being operated correctly and is being well maintained.

With the advent of flexible cash rent leases, it brings another reason for a landowner to know the yields from their farm.  The yield of a crop times a given grain price and percentage as set in the lease will determine the total rent due for the year.  If yields and prices are good, the tenant will pay additional rent to the landowner above the base amount paid earlier in the year.  Therefore, it is important for the tenant to keep good records of production and for the landowner to know the yields produced on their farm.       

For all the years I farmed, it was critical that I had detailed records on yields and production when dealing with my landowners as all my leases were crop share in which the owner received a portion of the crop as their farm rent.  My job was to keep track of all the scale tickets with the weight and moisture of the grain delivered to the grain elevator.  After adjusting for moisture differences of each load of grain, I would divide the overall production down to the pound when I reported to the grain elevator how to split the total amount of grain from each farm and make payments.  Under a crop share arrangement, both the tenant and the landowner know the yield produced by that farm because there is a settlement sheet detailing each load of grain delivered and who gets how many bushels.

With cash leases, it can be take more effort by a landowner to know the actual yields produced on their farm.  As a beginning point to understanding what a farm should yield, each field has a collection of soil types that have an assigned productivity index or soil rating indicating how these soils compare to other soils in the state.  The index also relates to an expected crop yield that should be produced given normal or average conditions and management practices.  Some land grant universities have a specific yield expectation per crop assigned to each soil type.  The better the soil type, the higher the expected yield that should be produced.  Conversely, a farmer and landowner cannot expect top yields from farms that have soil types with lower ratings.

Obtaining yield information for a farm that is cash rented is not difficult, however it does require good communication by the tenant with the landowner.  The first step is for the landowner to have it written in the lease that they will receive yield data and fertilizer application records each year.  The tenant can supply the yield data in several ways.  One would be to provide a copy of the yield maps from the farm that not only indicate total bushels harvested, but also show the variability of yield across the field which can lead to adjustments in agronomic practices taken to fix problems or improve performance. Another good means of getting yield data for a farm is for the tenant to provide a copy of the crop insurance APH (Actual Production History) history of the farm each year as it will show the most recent 10 year history of yields and the average over the time.  

It is a given that a farmer needs to know the yield produced by each field for financial and agronomic reasons.  It is critical to their success as a farmer.  A non-operating landowner also needs to know the yield produced on their farm no matter the type of lease in place.  The information for the landowner is vital in knowing the productivity of their farm, if it is being operated effectively by their tenant, and if it is being well maintained for the long-term value of the farm.