Frequently
Asked Questions
Building
Farmland Wealth
Finding
Your Farm Management Professional
What
Others Are Saying
Links
At Farmers National Company, we
always advise that you seek out the best legal counsel
and tax expert that you can find to help structure ownership of your farm asset. Good
advice pays big dividends.
Farm Planning for The
Next Generation
Owning
farmland is a unique experience whether you inherited the farm property or
purchased it as an investment. The asset combines cash and appreciation returns
along with desirable physical attributes. Investments in farmland compare
favorably with returns from other investments, while at the same time many farm
properties carry a family legacy passed on through the generations who have
owned the land.
If you
have questions concerning anything about your farm, please read further in this
section of the Farmers National Company's Landowner Home Page to learn more
about the following:
·
Whether
your rental arrangements are fair to you and your tenant.
·
How
you can ensure that your heirs will receive full benefit from the farmland they
will inherit someday.
·
How
you can help the next generation farmland owner learn more about the farm and
agriculture.
·
How
children can assist elderly parents in taking care of their farm property.
·
Who
to turn to for advise after inheriting a farm.
·
How
to know what is happening on your farm.
Share
this information with your parents, children or friends who own farmland.
Frequently Asked
Questions
How do I
determine a fair rent or lease for my farm?
In taking
care of your farm, there are times that you need additional expertise in specific
areas. You might need analysis of your current leasing arrangement to see if it
is fair and profitable for you as the landowner and fair for your farm
operator. You may need to obtain a better idea of the value of your farm as you
work with estate planning. Special projects on your farm such as conservation
work or Conservation Reserve Program compliance may need additional
oversight.
Whatever
your need, you can always turn to one of Farmers National Company's
Professional Farm Managers to provide expert analysis and consultations. To
find the local manager nearest your farm, please click
here.
I have
questions about legal and tax issues concerning farm ownership.
At Farmers National Company, we
always advise that you seek out the best legal counsel
and tax expert that
you can find to help structure ownership of your farm asset. Good advice pays
big dividends.
My
parents need assistance taking care of their farm. How can I help?
It is a
common situation for aging parents to look to their children for help in
managing their financial affairs. If a farm is included in their assets, the
increasing complexity of leasing, grain marketing, and government farm programs
can often overwhelm people so that they turn to professional advice.
In
today's agriculture, it takes experience and knowledge to profitably manage
farms. Many landowners call on experts in farm management to make the farm
profitable and enjoyable to own. To find a Professional Farm Manager near your
farm, please click
here.
I just
inherited a farm. Now what?
The death of a parent or relative
is an emotional time for everyone. On top of that you add the stress of legal
and financial matters that need to be attended to. Then if you inherit a farm,
you may be adding additional responsibility without current knowledge of farm
ownership issues. Questions may arise concerning appropriate leasing terms,
farm profitability, grain pricing and farm value. It becomes a load of
unfamiliar things to take care of, especially if the family members live many
miles away.
If the
parent or relative had arranged for professional farm management before their
death, the transition of farm ownership is carefully taken care of. If this was
not done previously, please contact Randy Dickhut, Vice President of
Client Relations, at 1-800-346-2650 to discuss ownership transition and
management needs.
My
tenant doesn't tell me anything. How can I know what is going on with my farm?
Good
communication is the key to understanding what is happening on the farm and to
ensure that it is well taken care of. Unfortunately, this doesn't always happen
between the farm operator and absentee landowner.
Farmers
National Company personnel work to understand the goals and expectations of our
clients and to communicate information throughout the year with written reports
and personal conversations. Read more about the Farmers National farm
management system at Farm
Management System.
Is
farmland a good investment?
Many
people include farmland as a portion of their real estate holdings and overall
investment portfolio. They like the normally steady annual cash returns of
farmland coupled with the long-term appreciation in value. For example, one
farm under management by Farmers National Company had an average annual Return
on Investment (ROI) of 11.28% during 1991-2005. The ROI represents both cash
and appreciation returns. Please see the Building Farmland Wealth
section under this area of the Landowners Home Page.
I want
to sell my farm. How do I get top dollar for it?
Today's
market for agricultural land is strong. Determining the appropriate selling
price takes a farm real estate professional working on your behalf who knows
the marketplace for land, can aggressively market the property, and can get the
best possible price from the sale. To learn more please see Real
Estate Services.
I want
to keep the family farm, but my siblings want to sell. Is there a way I can
keep it together?
Family
members have different investment strategies that don't always work with the
goals of other relatives in the joint ownership of a family farm. Some may want
to keep the farm as a sound investment and others may want to sell and collect
the cash.
Bringing
in a professional from Farmers National Company to work with the differing
goals of the various owners may bring about a resolution that works for
everyone. To discuss your situation, please contact Randy Dickhut, VP of
Client Relations at 1-800-346-2650 or email rdickhut@farmersnational.com.
How can
I find out what my farm is worth?
There are
times that you may need an expert opinion of what your farm is worth in today's
market. This might be for estate valuation purposes, division of the asset, or
gifting. Whatever your need, Farmers National Company has Certified Appraisers
who can provide top quality appraisals.
Please see Farm
and Ranchland Appraisals.
I want to pass our
family farm to my children. What is the best way to do that?
You've
worked hard to build an investment portfolio that also includes farmland. Now
it is time to make plans for passing the benefit of land ownership to the next
generation. The question becomes how best to set up a seamless, low-cost
transfer that you know will maintain the value and profitability of the asset.
Many
times farmland owners turn to Professional Farm Management or one time
Consultations to help them setup appropriate transfers of their farm. Please
call Randy Dickhut at
1-800-346-2650 for more information.
I live
1,000 miles from my farm. Who can I
trust to take care of it?
It is
difficult to take care of the day-to-day responsibilities of a farm when you
live a great distance from it. Farm operators are working with more and more
acres as they grow their business and may not be able to give full attention to
the details of each farm.
Farmers
National has local Farm Managers who know agriculture and the people in their area.
Our Managers act as the landowner's agent to represent the best interests of
the client. Good communication and accounting for all funds helps make farmland
ownership nearly worry free. For the Professional Farm Manager nearest your
farm, please click
here.
How can
I find a farm professional near my farm?
Whether
you need full management services for your farm, want to sell the farm, or need
a one-time consultation, Farmers National Company has a professional near your
farm. Our Farm Managers have knowledge and experience in local agriculture that
they utilize in serving the needs of their clients. Please refer to Find
a Farm Manager to locate a Farm Management expert that can help with your
farm. To handle your farm sale or purchase needs, Farmers National Company has
a professional real estate agent near your property. Please click
here to find an agent near you.
I don't
understand all the insurances for my farm. Who can help me sort it out?
Many
farmland owners have crop, hail, property, and liability insurance for their
farms. Trying to sort out the different coverages and costs can be daunting. At
Farmers National Company, we work to provide cost-effective insurance coverage
for our clients to mitigate risk and improve profitability. To learn more,
please see Insurance
Services.
I hear
about hunters paying money to hunt on farms. Can I get that for my farm?
Leasing
farmland to hunt on is a growing business. Many people are looking for places
to hunt a variety of wildlife. Landowners are discovering that they can earn
extra money from leasing their land for hunting. But, the landowner has to be
sure that they have good liability insurance in place before leasing the
property. Also, there are challenges when setting the lease fee and monitoring
how the property is used.
If you
want to learn more about earning additional money from your farm by having a
hunting lease, or go to our website www.nationalhuntingleases.com
or contact Troy Langan at 1-800-346-2650.
Building Farmland
Wealth
Building
wealth through ownership of farmland is normally a long-term investment, the
same as owning other real estate or investing in the stock market. Total
returns for owning farmland are a combination of annual cash profits and
appreciation in value. Farmland is normally expected to have a 3%-5% cash
return on investment annually. Appreciations in value over the long term will
vary from region to region. For
example, the following table shows the average annual appreciation in value for
Illinois farmland for the period 1921-2006. (Source: University of Illinois)
|
|
Average Yearly Changes in Farmland
|
|
Values for Different Time Periods
|
|
Years Between
|
Average Percentage Increase
|
|
1921 - 1930
|
-5.4
|
|
1931 - 1940
|
-1.3
|
|
1941 - 1950
|
7.8
|
|
1951 - 1960
|
6.2
|
|
1961 - 1970
|
4.6
|
|
1971 - 1980
|
15.8
|
|
1981 - 1990
|
-3.0
|
|
1991 - 2000
|
4.8
|
|
|
|
|
1981 - 2006
|
2.6
|
|
1971 - 2006
|
6.5
|
|
1961 - 2006
|
6.3
|
|
When you combine the
cash and appreciation in value for total returns, farmland has delivered a
10.47% return during the period 1992-2005 according to the following sources
NCREIF, Bureau of Labor Statistics and the Federal Reserve System.
Finding Your Farm Management
Professional
In order
to properly manage a farm, the owner needs to know the local rental
arrangements, local farmers, weather conditions, costs and many other details.
If you live at a distance from your farm, this can be difficult to do. That is
why Farmers National Company has local Professional Farm Managers throughout 20
states. These Managers know the local
conditions near your farm and can provide the expertise to handle any
situation. To find the Farmers National Professional Farm Manager nearest your
farm, please click
here or call 1-800-346-2650.
Farm Analysis and
Consultations
In taking
care of your farm, there are times that you need additional expertise in
specific areas. You might need analysis of your current leasing arrangement to
see if it is fair and profitable for you as the landowner and fair for your
farm operator. You may need to obtain
a better idea of the value of your farm as you work with estate planning.
Special projects on your farm such as conservation work or Conservation Reserve
Program compliance may need additional oversight.
Whatever
your need, you can always turn to one of Farmers National Company's
professionals to provide expert analysis and consultations. For more
information on consulting services, contact Jim Stephens at 1-800-346-2650 or jstephens@farmersnational.com.
What Others Are Saying
Client Comments
Links
to Other Ag Sites
