How can dairy farmers in the north country afford to expand their farmland when cash flow is dwindling?
Leasing land instead of buying it, experts say, has become increasingly popular among farmers in the north country. Most farmers are doing so because they need more forage to expand their cattle herds. Others are leasing land because growing crops is cheaper than buying feed at todays prices.
Because farmland in Jefferson County is in such high demand, some farmers are willing to travel many miles to harvest additional crops on leased property. Last year, dairy farmer Lyle J. Wood, co-owner of a farm in Cape Vincent with Scott F. Bourcy, leased an additional 700 acres of land for corn and 300 acres for hay about eight miles away from the farm. The leased parcels belong to five property owners. The decision was made because Mr. Wood is increasing his herd size from 700 to 900 cows in the next year and will need forage to do so.
This summer, the owners built 200 free stalls for cattle, and they plan to construct a milking parlor this year.
Leasing the land worked out well because you dont have to outlay the cash out front, said Mr. Wood, who signed five-year leases with the landowners. If you were to buy the land it would be about $800 to $1,000 an acre, but $50 an acre is now the going (lease) rate.
Mr. Wood said todays high commodity prices have made growing more crops the best option for many farmers. And because more farmers are hungry to lease farmland, some of them, like Mr. Wood, are leasing it before they expand while its still up for grabs.
Mr. Wood said, We saw people eating up some ground and we thought we better lease it now instead of waiting to expand their herd. That additional land will produce enough forage when we add cattle.
For most farmers, land near their farms isnt for sale, said Michael E. Hunter, field crops educator for Cornell Cooperative Extension of Jefferson County.
Were now seeing that theyre moving farther away from the home location of the farm as land gets locked up in a local area, he said. Were seeing farms branch outside of their comfort range to buy land in areas with less competition. Ten years ago a farmer may have traveled 10 miles for land, but were now seeing farmers travel 20 miles from their farms.
Inexpensive farmland with lower crop yields can be leased for $10 to $20 an acre, while higher quality land with better soil can range anywhere from $50 to $100. Leasing cheaper land thats farther away isnt always the best option, Mr. Hunter said, because the extra labor, travel expenses and lower crop yields could mean reduced profits.
Consider a cornfield thats 20 miles away, rents for $20 per acre and yields eight tons of silage per acre. If a neighbor is leasing land at $50 that yields 20 tons per acre, the value of the extra forage would make leasing that property a better deal.
Mr. Hunter said farmers who cant lease any land nearby, however, sometimes temporarily lease land farther away to wait for better land to become available.
Leasing property before buying it has become an increasing trend, said Arthur F. Baderman, agricultural outreach coordinator in the Jefferson County Cornell Cooperative Extension office.
There is a little less land being bought right now because of tighter cash flow, he said, so theyre buying time with leases. There may be more land leased this year because of a shortage of forages the last couple of years. Farmers that need more acres have been buying some more marginal land that may be not as high yielding as theyre used to.
Most farmers seeking to lease land will do so in the fall, Mr. Baderman said, when they are determining how much inventory theyll need to feed their cattle.
Farmers are saying, Lets plan this fall and not fly by the seat of our pants and wait until the spring to find out we need much more forage, he said.