Professional farm management is in essence agricultural asset management. Instead of managing paper assets such as stocks and bonds, a farm manager manages hard assets such as land, commodities, timber, irrigation wells, grain bins, and other assets used to create profitable operations for their client. The goal of a professional farm manager is to provide services that maximize their client’s return and asset monetary worth.
In order to achieve this goal, a professional farm manager develops a plan to achieve the client’s goals and objectives. This is done by extensive knowledge of crop production systems, crop marketing, irrigation designs, soil fertility, financial analysis, lease analysis, accounting, new agricultural technologies, environmental concerns, governmental regulations, and taxes. All of these variables can change the approach to management which includes lease negations and operator selection.
Lease negations are critical for maximizing profits. Too often both tenant and landowner look at lease negotiations as a zero-sum game in which one party wins and the other loses. Those attitudes must be extinguished in order for both parties to be profitable. A professional farm manager uses tools and information to negotiate and design a lease that achieves the client’s goals while providing incentives (opportunity for profits) to the tenant. The lease negation is a balance between resources available and provided by each party. Not all landowners and tenants provide the same resources and not all land is equal. Professional farm managers can identify the issues and create solutions so both landowner and tenant profit together.
By Ted L. Glaub, Accredited Farm Manager, Accredited Land Consultant, Real Estate Broker, and Auctioneer at Glaub Farm Management. Serving Landowners in Arkansas, Mississippi, Missouri, and Tennessee.