A36-Uancaster Farming, Saturday, December 6, 2003 Penn State Cooperative Extension Capitol Region Dairy Team ESTABLISHING RENTAL RATES Roland P. Freund Regional Farm Management Agent Carlisle There is no easy “rule" to tell us what rate we should charge (or expect to pay) for the rental of a particular item. Ultimately it is the amount of money that one person is prepared to give for its use that sets the rate. That amount usually depends on the suppl) and demand in a particu lar location. But it is helpful to use a systematic approach when evaluating a “deal” so that we can compare different situations and different “offers.” • “What should I charge to rent my dairy farm?” This seems like a simple question, but before we can begin to answer we need to divide the “dairy farm” into its component parts. There are the dairy buildings, the feed stor ages, the utility buildings, the cropland, the pasture, and the residence. The use value of each of these contributes to the utility value of “the farm” and hence the rent value. • Dairy facilities. In a dairy situation, we often consider the first three items as a packaged deal. The items that have the big gest impact are the cow housing and milking system, because they impact the potential milk pro ductivity and the labor require ment per cow. Where we have comfortable stalls, great ventila tion, and an efficient milking sys tem, a dairy producer could af ford to pay up to $250 per cow housed per year. For this the pro ducer should expect good dry cow and heifer housing, plus easi l> accessible feed storage to be in cluded. Unfortunately, rental fa cilities that meet all these qualifications are few and far be tween. Renters should avoid any fa cility that fails the cow comfort and ventilation tests. But if they are willing to compromise on any or all of the other traits, the rent al rate should be lowered accord ingly. Very “basic” facilities are probably only worth $l2O per stall per year. So a good 80 ties tall facility might be worth $l5O per stall or $12,000 a year. • Land. Cropland values de pend upon soil type and location. Shale or “slate” land is droughty and often rents for $l5 to $5O per acre per year. Deep loams or “limestone” soils run from $5O to $lOO an acre. In some specific lo cations, severe competition has raised the amount people are willing to pay to more than dou ble the above rates. Pastureland normally rents for about 50 per cent of the comparable cropland. So 100 acres of cropland at $BO would be $B,OOO and 10 acres of pasture at $4O another $4OO. • Residence. Housing values depend upon the local demand. As part of a “farm package,” ex pect the house to bring about 60 percent of the local going rate. If the market rate is $5OO a month, the “farm” value might be $3OO a month or $3,600 per year. • Farm rental value. Combin ing the example values used Roland P. Freund above we have: Dairy facilities: $12,000. Cropland: $B,OOO. Pasture: $4OO. Residence; $ 3,600. Total per year: $24,000, or $2,000 per month. These figures are used only to illustrate the process. Landlords and dairy renters should together discuss each component of a package and agree upon a rental rate. • Other situations. Sometimes a landowner has unused facilities that another farmer would like to use. If the farmer built his own, similar facility, his annual owner ship costs for depreciation, inter est, taxes, and insurance might run 15 percent of the construc tion cost. So it would be reasona ble to negotiate a rental rate be tween 5 percent and 10 percent of replacement cost for the facili ty. Repair costs and electric charges would be additional to the rental. • Silo storages. Another ap proach might be to look at the convenient alternative. For exam ple, if it would cost $4 per ton to store feed in an ag plastics tube, then that would be a starting point to arrive at a rental price per ton on the storage capacity of an upright silo. • Repair charges. Routine maintenance costs are always the responsibility of the renter, and major repairs such as re-roofing the bam come from the land lord’s pocket. It is the in-between items such as electric motors or refrigeration compressors that cause arguments. A compromise that seems to be reasonable and fair is to have in the rental agreement a clause which states something like this: “Repairs The first $lOO of any repair event shall be paid by the tenant. The next $4OO shall be shared equally by the landlord and tenant. Any amount greater than $5OO shall be the responsi bility of the landlord.” With this kind of arrangement, tenants don't end up taking a milk cooler compressor with them when they leave the farm. • Agreements. Before making any agreement, always negotiate the details. Prepare a draft agree ment. Have an attorney draft the legal document, which should then be reviewed by legal counsel for the other party and signed be fore witnesses. Schuylkill County Youth Take Center Stage at 4-H Achievement Night SCHUYKILL HAVEN (Schuykill Co.) On November 21, more than 100 4-H members, leaders, and supporters gathered here at The Parish Center of St. Ambrose Roman Catholic Church, to celebrate the close of the 4-H year and to honor the 4-H members. Among those recognized were the winners of the following events: The Schuylkill County 4-H Public Speaking Contest was Aug. 1. Corporate sponsor Em pire Beauty School contributed $5OO to the event, providing sav ings bonds, plaques, and trophies to participants. Participants are listed below. Junior division first place, Re beccah Leiby, 12, Schuylkill Haven; second place, Darla Rom berger, 12, KJingerstown; and third place, Robert Leiby, 13, Schuylkill Haven. Senior division first place, Scarlett Hester, 15, Pine Grove; and second place, Jessica Stemmier, 15, New Ringgold. The public speaking contest grand champion title went to Re beccah Leiby. Reserve grand champion was Scarlett Hester. Schuylkill County 4-H Teen Council members who met the club’s annual attendance, com munity service, and participation requirements were recognized at Achievement Night. Active Teen Council members are Roby Dippel, 18, Schuylkill Haven; Marissa Frompovicz, 17, Auburn; Scarlett Hester, 15, Pine Grove; Kara Noecker, 14, Au burn; Jeremiah Roeder, 17, Au burn; Paul Shealer, 19, Auburn; Crystal Smith, 19, Auburn; and Sarah Zimmerman, 15, Pine Grove. The Pennsylvania 4-H Junior Dairy Show was Sept. 22 at the Farm Show Complex in Harris burg. Schuylkill County winners are listed below. Andrew Daubert, 19, Pine Grove; David Dunn, 18, New Ringgold; James Dunn, 11, New Ringgold; Joshua Dunn, 14, New Ringgold; Rosie Moyer, 18, Bern- Recognized for their achievements were Schuylkill County Outstanding 4-H Members, from left, Katharine Yunegling, Kellilyn Greco, and Allison Greco. Also honored for achievement in the 4-H Dairy Project Area were members Adam Kahler,second from right, and Evan Snyder, right. Passing on Farm Workshop Dec. 16 CHAMBERSBURG (Franklin Co.) Pennsylvania Farm Link and Penn State Extension will conduct a Passing on the Farm workshop at the Lighthouse Res taurant, 4301 Philadelphia Ave nue in Chambersburg, Dec. 16, from 9:30 a.m. to 3:30 p.m. Farmers seeking ideas for suc cessfully passing their farm to family members, or those inter ested in locating interested, unre lated farmers to take over an op- ville; Wynonna Moyer, 10, Bern ville; Shelly Rex, 12, Andreas; Erica Rhein, 13, Pine Grove; and Aissa Schaeffer, 12, Pine Grove. The Pennsylvania State 4-H Horse Show was Oct. 24-26 at Harrisburg’s Farm Show Com plex. Winners from Schuylkill County are listed below. Ashley Dippel, 19, Schuylkill Haven; Leighana Ginther, 14, Schuylkill Haven; and Allison Greco, 16, Schuylkill Haven. The Penn State 4-H Achievement Days contest was July 30 at Penn State Universi ty’s Main Campus. The Schuyl kill County 4-H Horse Bowl Team placed third in the state. Team members were Rebecca Cunningham, 15, Pine Grove; Nicki Davis. 16, Port Carbon; Katie Degler, 17, Schuylkill Haven; and Allison Greco, 16, Schuylkill Haven. Greco was also the First Place Individual in the contest. Schuylkill County’s Outstand ing 4-H’er Award Winners were recognized at Achievement Night. Winners wrote essays about their 4-H experiences and the life skills they’d learned, pro vided details on their 4-H in volvement at county, regional, state, and national levels, and discussed their community serv ice experiences. Katharine Yuengling, 11, Or wigsburg, was named 2003 Schuylkill County Junior Out standing 4-H Member. Yuengling is a member of the C. C. Riders 4-H Horse and Pony Club and the Wilderness Explorers 4-H Club. She attends sixth grade at Blue Mountain Middle School. Along with being active in two 4-H clubs, she takes karate les sons, plays the piano, and enjoys creating art. Kellilyn Greco, 12, Schuylkill Haven, was named 2003 Schuyl kill County Intermediate Out standing 4-H Member. Greco is a member of the C. C. Riders 4-H Horse and Pony Club. She is a seventh grader at St. Ambrose School, where she serves as a stu dent council representative, is a eration, should attend. Beginning farmers are also urged to partici pate to glean ideas for building their businesses. Topics covered will include: bringing the next generation into the farm business; business plan ning for a farm transfer; financ ing for new farmers; crop insur ance; estate planning and legal implications; and farmland pres ervation. The workshop will conclude member of the Pep Club, and works on the In-School Publicity Committee. Greco is serving a term as 2003 Schuylkill County fair princess. Allison Greco, 16, Schuylkill Haven, was named 2003 Schuyl kill County Senior Outstanding 4-H Member. Greco belongs to the C. C. Riders 4-H Horse and Pony Club and is a member of the Schuylkill County 4-H Teen Council. She attends Nativity of the Blessed Virgin Mary High School, where she is completing eleventh grade. Greco volunteers her time at the 4-HAJnited Cere bral Palsy Therapeutic Riding Program. She also belongs to her school’s Spanish Club, Interact Club, and Math Club; and she at tended the 2003 Hugh O’Brian Youth (HOBY) Conference. Two Outstanding 4-H Member applicants were recognized for noteworthy achievement in their specific areas of 4-H involve ment. Evan Snyder, 11, Pitman, was recognized for Outstanding Achievement in the 4-H dairy project area, junior division. Snyder is a member of Grassy Meadows 4-H Club. He attends fifth grade at Mahantongo Ele mentary School. Adam Kahler, 12, Pitman, was recognized for Outstanding Achievement in the 4-H dairy project area, intermediate divi sion. Kahler is a member of Grassy Meadows 4-H Club and is completing the seventh grade at Tri-Valley High School. Retiring 4-H leader Doreen Smith was also honored. Smith, a resident of Auburn, helped to found the Blue Mountain 4-H Livestock Club and has served for several years as secretary of the Schuylkill County 4-H Devel opment Board. She was the first recipient of the new Claude Riegel Memorial Outstanding 4-H Leader Award, an honor sponsored by Jefferson Grange # 1384 in honor of former Worthy Master of the Grange Claude Riegel. Riegel was a for mer resident of Orwigsburg and lifelong 4-H supporter. with a panel of local farmers dis cussing how they transferred their own farms. Lunch at a cost of $lO per per son will be served in the restau rant. Reservations are required by Dec. 9. Pease mail your reser vations to Pennsylvania Farm Link, 2708 N. Colebrook Road, Manheim, PA 17545. Questions about this workshop or farm transfer issues can be answered at (717)664-7077.
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