Here is the conclusion to the Transitioning on rented land story:
In 2016 the Kerkaerts are farming 385 acres of organically managed land under long-term cash rent contracts. They no longer farm any land conventionally nor do they accept short-term leases. The Kerkaerts have worked hard to build relationships with three different land owners allowing them to negotiate unique, long-term rental contracts – some fixed and some flexible on price and yield.
One parcel of land, totaling 72 acres, has been farmed by the Kerkaerts since 2008 when it came out of CRP. In 2012 the land was sold. “We started farming it conventionally [in 2013] assuming that when a new owner came in we would no longer be able to farm it,” explains Theresa. “We thought we were going to lose the lease. The next crop in our [organic] rotation needed to be oats, which is a low income crop, so we switched it to conventional corn, trying to capitalize on [what we thought would be] our last year of farming it.”
However, the Kerkaerts didn’t lose the lease and are transitioning the land back to organic after explaining the benefits of organic soil building principles to the new owner. The landowner offered the Kerkaerts a long-term flexible lease, agreeing to a reduced rent during transition. The rent will increase once the land becomes certified in 2017.
The second parcel of land, totaling 146 acres, had also been in CRP before the Kerkaerts began farming it organically. “We have a three-year fixed rent agreement with the landowner,” says Bryan, “so we know that land will be organic for a while.”
The Kerkaerts’ remaining 170 acres is the first piece of land they farmed and is under a long-term fixed cash rent contract. “We feel very secure with this contract,” says Bryan. “It is managed by a group of family members and they all have to agree before making changes to our contract.”
Most promising, however, is an opportunity in the Kerkaert’s home town of Marshall. Neighbors who have been contract farming 440 acres conventionally are now looking to rent out the land. Bryan and Theresa have proposed a flexible cash rent contract that is flexible on both price and yield (allowing the landowner to cash in organic premiums and improved yields once the land is certified). “We like to think of it as a ‘bonus’ rent value,” explains Bryan. “So that when the land shines [i.e., is organic] the landowners can make up for the reduced rent we will pay during transition. We all win.”
Acknowledgments
This project was supported by the U.S. Department of Agriculture, National Institute of Food and Agriculture, Organic Transitions Program under award number 2013-51106-21005.
This project was also supported by the U.S. Department of Agriculture, Agricultural Marketing Service, National Organic Program under the Transition to Organic Partnership Program (TOPP) in the Midwest region.
Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and should not be construed to represent any official USDA or U.S. Government determination or policy.