Cash renting becomes option in Missouri farm economy
ST. JOSEPH, MO (AP) - Like all other farmers, Joe Lau knows the importance of being a walking and talking economist to survive in today's expanding world of agriculture.
Lau is a 25-year-old first generation farmer who raises crops in six counties in the St. Joseph area, around Weston and near Wathena. He currently farms about 1,200 acres of corn and soybeans. And he's seeking to expand.
The News-Press Now reports that he's chosen to pursue the route of cash rent farming, which allows him to raise the crops by paying landlords. Names on that list include the St. Joseph Business Park Corporation (Eastowne Business Park), the Agri-Business Expo Center and the city of St. Joseph.
"I consider myself a very transparent operation," Lau said.
Cash renting as a basis for farming is simple, he said.
"It's a lot easier for a landlord to add a tenant," he said. "You just pay your money and you farm as you please ... I'm always trying to add on. I don't know that I'll ever have enough."
According to Lau, another benefit is derived from negotiating the terms in a lease of the land — with the focus placed on fertility and soil health.
A preference in cash renting constitutes a major change in mentality for agriculture, he added. Yet the high input costs that stem from machinery still turn up as a negative.
Cash rents could become more popular and may even be following a generational path that accents youth in farming, said Lau. Another part of the phenomenon finds a number of absentee landlords owning farmland in the St. Joseph area, contrasted by a more aggressive type of farm ownership in Northeast Kansas.
He envisions 2018 to bring more of the same results for farmers who experienced a successful harvest this year.
"It's not that bad," Lau said. "One of those days, we may run out of luck."
Indeed, poor weather could potentially arrive in the region for next growing season and easily destroy the good times. On another front, South America has become home to many major competitive players in the commodities markets, such as soybeans.
A recent report from the Federal Reserve Bank of Kansas City shows the farm economy in its jurisdiction stabilizing, even as financial stress continues to build and incomes remained on a decline.