Determining Price. We may change our prices at any time without notice. Prices we quote you are valid for 30 days, unless we state otherwise in writing. If no price has been specified or quoted to you, the price will be our standard prices in effect at the time we accept your order.
Determining Price. The price used to calculate the final rent payment should represent the potential income that could be received from selling the crop. This can be the cash price at a local elevator or processor on a specified date, or an average of nearby prices on several dates. Prices on dates near or before the time the final rent is paid should be used even though the crop may actually be sold later. Only if the landowner is providing storage facilities should prices after harvest be used. Forward contract prices available before harvest can be included, too. Many farm producers begin pricing their crop in the spring or summer months. In that case, Flexible Farm Lease Agreements Page 3 using the price offered for harvest delivery on one day per month from March through December, for example, may best reflect the overall value of the crop. Another alternative to using a local price is to use a futures contract price minus a normal basis value for the location of the farm. Other options include using the posted county prices calculated by USDA Farm Service Agency (FSA) each day or the monthly average cash prices reported by the USDA National Agricultural Statistics Service (NASS), Iowa office.
Determining Price. The price used to calculate the final rent pay- ment can be the cash price at a local elevator on a specified date, or an average of prices on several dates. Prices on dates near the time the final rent is paid should be used even though the crop may actually be sold at a different time. An alternative to using a local price is to use a futures contract price, minus a normal basis value. payment may be for a fixed amount while the final payment is variable. Government Payments Because the purpose of a flexible lease is to adjust the amount of rent to reflect the income received from crops each year, payments received from participation in government programs should also be considered. If rent is to be calculated as a percentage of gross income, as in the first example, then gross income can include both crop sales and govern- ment program payments received or expected. For leases that include selling price in the rent calculation, income received from a Loan Defi- ciency Payment or through an F.S.A. marketing loan can simply be included by using the loan rate as the actual market price. The flexible lease formula should be tested by using several different price and yield possibili- ties, to estimate the range of potential cash rents. Regardless of what type of agreement is adopted, it should be described in writing (with an example) and made a part of the written lease contract. Prepared by Xxxxxxx Xxxxxxx, extension economist File: Economics 1-5 Minimum and Maximum Rents Some tenants and landlords may want to avoid the possibility of a very high or very low rent in some years by setting a maximum and/or minimum rent. This keeps the actual rent paid each year within a desirable range. Many leases ask for a portion of the rent to be paid in advance. Under a flexible lease, the advance
Determining Price. A.Predetermined Price subject to periodic review. This is usually the best method since the owners are best able to value the company. However, healthy owners could refuse to agree to update the purchase price if one owner becomes ill, or owners may merely neglect to update it, so a back-up clause is necessary.
