Rent Review

[Hindsight]

Current wheat £200 tonne, futures for 2021 harvest £160, 2022 harvest £150. Forward sales for OSR possible at £350 plus for harvest 21 and possibly negotiate a sale for 22. Commodity prices forward for two years look firm. Landlords agent enters that in spreadsheet. Considers a prudent AHA tenant will take advangate of some of those forward prices to sell a proportion of future crops. And you have a reason for a rent increase 15%. Being devils advocate. And landlords agents do have a job to do - what would you think if on of these represented you with a claim against a utility company - and just rolled over and took what was offered, or worse told the utility they were paying too much??

 

[Hindsight]

That sounds plenty for some heavy land. Quoting £200/t is useless as you can’t get that on the futures for the next 3 years at the moment.

Make sure you have a proper tenants agent. When is the rent review date?

But you can sell forward for £150 tonne, I think ? Still looks reasonable in a budget spreadsheet. Just playing devils advocate. Some drainage infrastructure in many fields would be a good idea.

 

[David.]

With openly marketed land, it is the tenants that set the bar. What I often hear is that when land is let the agent will only take the tenders of the pet clients to the landlord!!

Not for no reason do the chosen ones usually run a nice pheasant shoot.

 

[Wombat]

Current wheat £200 tonne, futures for 2021 harvest £160, 2022 harvest £150. Forward sales for OSR possible at £350 plus for harvest 21 and possibly negotiate a sale for 22. Commodity prices forward for two years look firm. Landlords agent enters that in spreadsheet. Considers a prudent AHA tenant will take advangate of some of those forward prices to sell a proportion of future crops. And you have a reason for a rent increase 15%. Being devils advocate. And landlords agents do have a job to do - what would you think if on of these represented you with a claim against a utility company - and just rolled over and took what was offered, or worse told the utility they were paying too much??

Thats the problem with spreadsheets, don;t take into account the guy combining his beans a month ago

 

[Hindsight]

Thats the problem with spreadsheets, don;t take into account the guy combining his beans a month ago

Quite agree Wombat. I have never had a spreadsheet crop fail!

 

[teslacoils]

Plenty of fbt heavy land in lincs at or over £150/AC that are growing good crops and farmed well.

 

[Flat 10]

Plenty of fbt heavy land in lincs at or over £150/AC that are growing good crops and farmed well.

That’s quite impressive IMO. Particularly if it’s just bare land .

 

[ADbeefboy]

Current wheat £200 tonne, futures for 2021 harvest £160, 2022 harvest £150. Forward sales for OSR possible at £350 plus for harvest 21 and possibly negotiate a sale for 22. Commodity prices forward for two years look firm. Landlords agent enters that in spreadsheet. Considers a prudent AHA tenant will take advangate of some of those forward prices to sell a proportion of future crops. And you have a reason for a rent increase 15%. Being devils advocate. And landlords agents do have a job to do - what would you think if on of these represented you with a claim against a utility company - and just rolled over and took what was offered, or worse told the utility they were paying too much??

Unless the landlord provides grain store and drying plant grain should be valued moist off the combine. Barley last year was worth around £120 off the combine, less drying charges and weight loss.

 

[startinghandle]

If a tenant sheep farmer complains about rent increase all the landlord has to say , fat lamb prices are good so what's the problem

 

[teslacoils]

That’s quite impressive IMO. Particularly if it’s just bare land .

You'd get a shed for that most of the time. Big, big operators squeezing kit hard, and taking a chance.

 

[Frank-the-Wool]

What's the starting point? FBT rents for permanent pasture are £140 an acre

www.tfa.org.uk will always be your best source of information.

£140.00 an acre on marginal PP is ridiculous even with sheep at the prices they are today.
The other end of Sussex, plenty of FBT's are half that and some even less. On heavy clay land the grazing season can be very short and especially the weather we have had over the last couple of years.
One sheep to the acre in the winter from October to March can be too many and 3 ewes plus lambs for the summer when it dries out! Poor unimproved grass with little Clover is not even worth the BPS money.

 

[Jon]

I suppose it all depends what you're paying now.
I think Clive is trying to get the input industry to behave by having an online buying group for the cheapest deals and have everyone state what they pay to get some transparency in the industry.
Perhaps everyone should put their rent deals on here to compare and try and put these land agents out of business.
Get landowners dealing direct with their tenants.

Members of the Tfa have the opportunity to put their rents in a chart that is available for other members to compare.

 

[chipchap]

The trouble is if rents are too high, the property slowly deteriorates. There is now lots of land let at silly money and it is easy to see the hedges falling into a poor state, the ditches and drains getting filled up, black grass proliferating, wild oats waving in the wind, P & K indices falling, lime status dropping, gates falling off their hinges.

Land let on a FBT needs more agent input and a good relationship between owner and tenant.

 

[Jo28]

Current wheat £200 tonne, futures for 2021 harvest £160, 2022 harvest £150. Forward sales for OSR possible at £350 plus for harvest 21 and possibly negotiate a sale for 22. Commodity prices forward for two years look firm. Landlords agent enters that in spreadsheet. Considers a prudent AHA tenant will take advangate of some of those forward prices to sell a proportion of future crops. And you have a reason for a rent increase 15%. Being devils advocate. And landlords agents do have a job to do - what would you think if on of these represented you with a claim against a utility company - and just rolled over and took what was offered, or worse told the utility they were paying too much??

You need to be very brave selling osr forward these days, doesn't take much to lose the whole crop! And after last year I would be seriously cautious about selling too much wheat forward on heavy land until its drilled and up.

 

[Hindsight]

You need to be very brave selling osr forward these days, doesn't take much to lose the whole crop! And after last year I would be seriously cautious about selling too much wheat forward on heavy land until its drilled and up.

Quite agree - and that is the counter argument to the agent with a copy of the current Futures market price and a grain merchants forward sale. Is it prudent to sell forward. Fascinating discussion to be had. I will not get into the murky world of options that the landlords agent might counter with - in the game of rent chess!

 

[Farmer_Joe]

If a tenant sheep farmer complains about rent increase all the landlord has to say , fat lamb prices are good so what's the problem

Ha ha tell them to index link it then when they go sh!t again you can pay duck all rent

 

[Brisel]

We are paying more than £65. This type of land locally on a Fbt is the Bps as the rent
All the agent talked about was wheat at £200 ton Also the Landlord was looking for a return on their investment
I replied that as the landlord was left this land 200 years ago then £20 acre would be a handsome return
I can’t make my mind up if the agent is trying to justify his fee or if they are hoping I’ll tell them to shove it then sell it There was some sold over the hedge last year for £6k

Ask the agent what % of the national crop was sold at over £200/t, and what other crop prices were, such as barley. Remind them what establishment conditions were in the autumn of 2019 and 2020. I couldn't drill 1/3 of my winter wheat last autumn & 2/3 in 2019.

Prepare a rent escalator that reduces the rent as BPS tails off & remind them that Stewardship costs at least 50p in the £ where BPS costs a fraction of that. Reduce the rent £ for £ on BPS and expect to haggle back to half that.

 

[Wombat]

You need to be very brave selling osr forward these days, doesn't take much to lose the whole crop! And after last year I would be seriously cautious about selling too much wheat forward on heavy land until its drilled and up.

You had any rain this spring?

 

[Gedd]

Has some land rented in fact still rent the same land now rent was half a ton of feed wheat priced on 1st September worked for a couple of years but agent won't hear of it now I thought it was,a fair way of doing it

 

[Brisel]

Has some land rented in fact still rent the same land now rent was half a ton of feed wheat priced on 1st September worked for a couple of years but agent won't hear of it now I thought it was,a fair way of doing it

They wanted the full tonne?