D4—Lancaster Farming, Saturday, May 3,1980 4Q <&' Business By ' Newton Bair FAIR RENTAL VALUES (FOR LAND) At one tune or another, most farmers fmd themselves in the position of being either a landlord or a renter. So, the problem of establishing a fair rental value for land is worth considering. Land Only Rental If you check with your neighbors, you’ll find a wide range of values. Anything from $lO an acre land rental to $lOO or more can be found in Southeastern Penn sylvania. - The factors that determine these values are the use to be made of the land, the urgency for renting Lebanon Continued from Page D 3 Jesse L Weaver B 3 54 4 82 2 Phares Z Musser 3 53 7 79 6 Ivan M Weiler B 3 63 2 81 6 - J Zimmerman B 3 88 1 83 5 - R Zimmerman B 3 84 4 92 5 < Clyde E Deck G 3 68 5 76 6 - Melvin M Nolt B 3 51 0 91 5 < J N Smith & Son 2 80 9 85 6 ; Lentzdale Farms B 3 74 3 80 6 ; Raymond K Martin B 3 41 8 78 4 c H E Bomgandner B 3 46 7 84 9 A Ray R Sattazahn B 3 104 6 86 5 A Richard Batz 3 28 1 72 8 A Enos Zimmerman B 3 65 6 93 1 ■ Jeffrey D Rymoff B 3 30 0 85 4 ; Hollow Pride Farm B 3 38 0 81 3 ; Galen Bollinger B 3 133 1 95 1 A Harold Myer B 3 221 4 92 9 A A R McCrone B 3 36 9 97 1 3 SMt Echo Fm B 3 100 9 90 4 3 Melvin M Nolt B 3 51 0 88 6 3 Gluck Auf Farm B 8 27 5 94 4 3 Warren Hetrick B 3 35 0 94 2 3 M M Bennetch 3 125 4 88 3 3 T E Hostetter B 8 35 0 83 8 3 DAD Bucher G 3 63 6 87 2 3 J E Gelsmger B 3 52 0 73 0 3 R Sollenberger G 4 35 3 93 8 2 Dennis L Showers B 3 40 1 89 5 3 L M Martin G 3 500 83 5 3 David B Lehman B 3 34 7 80 2 3 Donald Bomberger 4 50 0 92 0 2 John H Tschudy B 1 40 4 83 6 2 R Emnch A Son G 3 96 2 88 8 2 Isaac E Zimmerman 3 20 8 72 5 2 Kenneth E Ober G 3 34 2 76 3 3 Amos Bslsbaugh Jr 3 38 0 63 1 3' Carl J Bross B 3 66 7 89 4 2 John H Stick 1 33 1 77 7 2: Den Mr Goat Dairy B 8 16 0 68 8 New & Used Silos New & Used Extensions Tear down & Rebuild Replastering, roofs, permanent pipe & distributors Jamesway Unloaders Barn Equipment Write or Call DETWEiLER SILOS Rd 2 Box 267-D Newville, PA 17241 Phone: 717-532-3039 717-776-7533 717-776-3288 extra land, the fertility and ease of tillage, and the amount of competition for a given parcel. And all of these can be tempered by some traditions and precedents established in the com munity. In order to arrive at land rental rates strictly from agricultural values, we can use two methods. First, as a percentage of its agricultural use value, and second, by capitalizing the investment value. Whichever method we use, the rental should be tied to the productive capacity of the soil. In either case, the Co. DHIA rental figure per acre, per year is only a starting place for final negotiation between two parties. Percent of Agricultural Use Value Regardless of the prices currently being paid for farmland and on whatever basis they are justified, true agricultural value of land can be figured in only one way. That way is the net annual return from crops produced on it. On a dairy farm, the maximum return is realized from com and alfalfa. The net annual return from an acre of.good land growing com and alfalfa is currently about $l6O. This is derived using actual figures compiled over the last several years from the Pennsylvania 5 Acre Corn and 5 Acre Alfalfa Contests. Since contest fields are generally above average, we can assume this figure is pretty high. A more accurate average is probably $lOO net return from corn and alfalfa. (The range could be from $5O to $2OO calculations will have to be based on your value.) Decide for yourself what portion of the net return per acre can be paid out in rent Remember that the tenant assumes all risks of yield and price. Land Rental Based on Capital Value From the viewpoint of the landlord, this methods seems reasonable, but good judgement must be used in setting a value on the land. The following calculations are based on annuity tables and reveal the actual annual return needed to justify an investment in land. Example §1 If you borrow $lOOO at 12 percent interest to purchase one acre of land for farming pur poses, the land must NET $133.38 annually in order to amortize the loan in 20 years. Even 30 year amortization requires $124.14 a year net. $1,500 an acre land will require a NET return of $200.82 to pay a 12 percent mortgage. Caution: nobody can afford that kind of rent at present prices for com and alfalfa! CUMBERLAND VALLEY DUTCH AUCTION SALE SAT. MAY 10-9:00 A.M. QUILT SALE 2 PM CHICKEN BAR-B-Q & SALADBAR JAMES C. STRICKLER AMSOIL Gilbert Rd TRENTON, NJ - Newly enacted legislation has in creased the price of a New Jersey general hunting license from $lO to $13.50 per year. In addition to the general license fee increase, the new law increases the fee for bow and arrow hunting from $lO to $l5 per year Special deer permits which formerly cost $5 will now cost $lO a year. Those who formerly purchased a rifle permit for $3 will now pay a fee of $5 per year. The price of the New Jersey pheasant and quail stamp, which formerly was $5, has now risen to $l5. And the trapping license, which used to cost $lO, will now be priced at $2O per year. For those who are 14 and 15 years of age and those who are 65 to 70 years of age, reduced license fees are available. The general license fee for those persons will be $7; the bow and arrow hunting license will be Example #2 Land bought 20 years ago for $4OO an acre on a 5 percent mortgage can be paid for at $32.10 an acre. This is often the type of land that is of fered for rent. Example #3 150 bushel com land with corn $2.50 a bushel is worth ap proximately $l5OO. 100 bushel corn land is worth about $lOOO.BO bushel land is worth $650. Using 5 percent as an accepted rental per centage rate, 150 bushel Land would be worth $75 per acre, 100 bushel land, $5O an acre and 80 bushel land should rent for $32.50. This example is only a guideline. Change yields and prices and its a whole new game. Throw in the factors for competition and how badly you need land and consider the local precedents already set, and you’re ready to negotiate a deal. MARION PA. US ROUTE 11 & SOCIAL ISLAND SPONSORED BY SHALOM CHRISTIAN ACADEMY FOR INFORMATION CALL 717 375 2458 St. Thomas, Pa 369-4425 NJ. passes legislation to hike hunting fees 3 rd ANNUAL Vs MILE NORTH OF This ad sponsored by, available for $B, and a trapping license can be purchased for $lO. In 1973, Pennsylvania license fees were raised to their present levels. A hunting and trapping license POURED CONCRETE WALLS MANURE BUILDING CONSTRUCTION OF ANY KIND \ \ This gives us flexibility to form a manure storage system to fit your layout PRICES QUOTED ON SLOTTED FLOOR MANURE STORAGE SYSTEMS Your Layout May Work with a Gravity Flow System which would save dollars. Let us Check it Out. Cali Ken Groff. STRASBURG POURED WALLS Strasburg, PA 17579 Phone (717) 687-6668 DETWEILER SILOS Jamesway Equipment R 2 Box 267 D Newville, Pa 776-7533 for persons 12 through 16 years of age and for persons 65 years of age and older costs $5.25; for a person 17 through 64 years of age the license is available fo $8 25 Square or Round ' Walls Built Below or Above Ground Aluminum Forming System using Redi-Mix Concrete and Reinforcing Steel RD 2 Box 8
Significant historical Pennsylvania newspapers