Farm Land Leasing

[Ryan M.]

Curious if anyone on this site is involved with farm leasing. Price/acre/year. Tiled/untiled. Irrigated/non irrigated?

[Bill B.]

Hi,

I just stumbled on this thread.

We own 24 acres in Southern California, planted with avocados.  We do not have the pockets to carry the downturns in the hit and miss world of farming, so we have it leased out. 

Our lease is "split profit".  

That is, the lessee pays ALL expenses (water, irrigation labor, minor maintenance and repair of irrigation systems, picking, hauling, pruning, pest control, weed control, fertilization, etc, etc) and any profit is split 50%-50%.  It is important to note that we are responsible for any capital expenditures.  (planting/replanting large numbers of trees; upgrades to the irrigation system; major repairs to road, etc)  The drought has made it very difficult for the lessee in the last four years.  But, zero dollars have come out of our pocket in that time except for mortgage payments.  

I know other farmers that lease out their land for a fixed fee.  Being SoCal, the price per acre is a bit higher than the amounts listed previously in this thread.  I know of one farmer getting $2,000 (or a bit more) per acre for flat row crop land.  (all land in SoCal must (MUST) have irrigation)  He carries zero market risk and zero out of pocket.  

But please keep in mind that farm land in Ventura County can sell for as high as $77,000 $80,000 per acre.  (the last time I heard.)  There are more deals at $40,000 - $50,000 per acre for established orchards.  

Side note, we paid just under $25,000 per acre in 2001.   There is a lot more to the whole picture (water, topology, etc) that is far less pertinent to the question, but would impact some of the numbers, but not too much. 

So, as always, all real estate is LOCAL.  

I hope this was helpful. 

Bill