How Farmland Agreements Can Affect Nutrient Management | eKonomics | The ROI of Fertilizer and Crop Nutrition

Soil Management

How Farmland Agreements Can Affect Nutrient Management

eKonomics News Team

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Dramatic changes in farm income and land value in Iowa have altered many common trends in farmland ownership. Whether a farmer rents or owns the land can play a major role in short-term and long-term nutrient management decisions.

Trends in land agreements

With 40% of cropland rented in the U.S. (Figure 1), is there any rationale for managing soil nutrients differently whether you rent or own? Does the farmland tenure affect year-to-year fertilizer decisions? These are interesting questions. If you get out what you put in – and soil doesn’t “know” it’s rented – your best bet is to tailor a soil nutrient plan for what the soil needs to produce the best crop.

Figure 1. Ownership of U.S. Farmland: owner-operated or rented/leased, 1964-2012
(adapted from Iowa Farmland Ownership and Tenure Survey, 1982-2017).

“Farm it like you own it,” says Kelvin Leibold, farm management specialist at Iowa State University. “Fertilizer programs should not be different between owned and rented land. There is an optimum level for fertility that will give maximum economic yields and reduce the potential for losing nutrients in the water.”

In Iowa, 59% of farmland is under some type of lease agreement compared to 41% of owner controlled (Table 1). The biggest shift here since 1982 has been the increase in acres under cash rent lease as opposed to crop share lease. This is in part due to payment in grain becoming a burden to land owners, as those land owner numbers continue to rise for non-agriculture personnel, also due to low to negative profit margins in recent years.

Table 1. Distribution of Iowa Farmland by Tenure
(adapted from Iowa Farmland Ownership and Tenure Survey, 1982-2017).

Craig Dobbins agrees with Leibold. “I don’t see much of a reason to manage soil fertility any differently on rented land versus owned,” says Dobbins, professor in the Department of Agricultural Economics at Purdue University. “Rented land doesn’t change hands all that frequently as it’s usually done to expand the farm’s overall land base,” he says. Another reason to treat the land as your own.

Figure 2. Years of leasing relationship, not lease length
(adapted from the Iowa Farmland Ownership and Tenure Survey, 1982-2017).

Of Iowa farmers interviewed in 2017, 68% have held leasing relationships with land owners for more than six years and 93% for at least two years (Figure 2). Even though these data are not the actual length of the lease, relationships lasting longer than two years should lead farmers to fertilize land as if they own it.

Other states probably differ in length of lease relationships and that can affect what a farmer can afford to fertilize. If farmers have access to the same land for multiple years, investing in a good nutrient management program could reduce yield limiting factors. The most important thing is to check your lease. “Lease agreements are legally binding so be sure you are complying with any specifics in the lease about replacement levels of fertilizer,” says Leibold.

Benchmark fertility levels

If you are new to the land, and do not have any nutrient history, it is a good idea to soil sample as a benchmark. Ask the landlord who will pay for the sampling, and how expenses are covered in the event that soil nutrients need to be built back up.

The greatest return on investment from soil sampling a field you do not have any data on are pH, phosphorus, and potassium.

“In my experience, another area that might pose some challenges on rented land and nutrient management is maintaining the proper pH,” says Dobbins. “Soils often become more acidic over time and may need a lime application to neutralize the soil.”

Recall a recent story on how soil pH affects potassium and phosphorus fertilizer availability and management. Even if there are adequate levels of phosphorus, potassium, and other nutrients, improper soil pH can be negatively affecting their crop availability. Check out this story on how to take the best soil sample.

Whether you, as a farmer, own the land or are renting, there are optimum nutrient levels that are needed for crop production (Liebig’s Law of the Minimum). However, if you cannot afford to soil sample this year and have access to past years’ yield data, use the Nutrient Removal Calculator for planning applications. As always, make sure to keep track of applications made and collect yield data when possible.

Stover ownership on rented land

Why is ownership of the corn stover/stalks so important? There are two main reasons: 1) additional income can be acquired from the harvest and selling of corn stover; 2) nutrient removal in corn stalks at harvest.

Stover value can vary year to year. Specifically, in Iowa, the development of the cellulosic ethanol industry led to the passing of legislation of stover ownership.

“562.5A Farm tenancy – right to take part of a harvested crop’s aboveground plant. Unless otherwise agreed to in writing by a lessor and farm tenant, a farm tenant may take any part of the aboveground part of a plant associated with a crop, at the time of harvest or after the harvest, until the farm tenancy terminates as provided in this chapter” 2010 Acts, ch 1027, §1.

This Iowa code also requires that leases end on March 1 of the following crop year – so the tenant has the right to graze or remove stover up until that date – and the lease be terminated September 1 of the current crop year.

Therefore, who owns the above ground corn stover is well defined. However, for example, if using the standard Iowa State Bar Association lease form, ownership of the corn stalks falls to the landlord.

As for nutrient removal, the nutrient of most concern is potassium. Removing stover – above grain harvest – would remove an additional 0.6, 0.16, and 1.1 pounds of nitrogen, phosphorus, and potassium per bushel produced.

Without the cycling of these nutrients back into the soil, supplemental fertilizer would need to be applied to decrease the chances of yield limiting conditions. To help determine application rates, farmers can utilize the eKonomics Nutrient Removal Calculator.

Sources

  1. Iowa Code 562.5A, Farm Tenancy – right to take part of a harvested crop’s aboveground plant.
  2. Iowa Farmland Ownership and Tenure Survey, 1982-2017.
  3. Issues with stover removal on rented land.