Land can be more than just an investment. For those who inherit land, it can be part of your family history. You can ensure the legacy continues even when your family no longer lives in the area. In these cases, a professional farm manager can be a smart investment.
“Anyone can own or inherit farmland,” said Elizabeth Strom, Vice President at Murray Wise Associates (MWA). “We have clients who see their land as the sole source of their income, and others who are high net worth individuals who view it as an investment.”
What to do with inherited farmland?
After inheriting farmland, your choices are not limited to selling the asset or running a farm. A farm management service can help increase the productivity and profitability of the ground.
“We have clients with varying levels of understanding about farming,” Strom said. “You may have recently inherited farmland and not know anything about agriculture yourself. For example, some clients may have had a participating lease. We can be there to help them transition from one generation to the next.”
MWA operates a full-service real estate and farm management program to provide a customized approach. Each farm is different and requires different management practices. Clients should expect to receive projected budgets, cropping plans and cash flow projections for the farm.
Farm management services should always include tracking all receipts and sales to help maintain accounting records. Then, clients can choose monthly, quarterly or annual financial statements with detailed explanations. This can help put landowners with minimal agricultural experience at ease when dealing with the industry’s variable markets.
How do I benchmark market conditions?
Farm management companies also can help clients benchmark values, rents and other market conditions for the specific area.
For example, a recent USDA National Agricultural Statistics Service Land Values Summary report showed cash rent values for cropland were up 3.2% to a record $160 per acre. However, that may not be the case for all states or regions.
In fact, the University of Illinois predicted cash rents in the state would be pushed lower in 2025 as commodity prices decline.
“We run enough lease comparisons to understand when a landowner is receiving an equitable income,” Strom said. “The ag space is changing, and income can be variable depending on the year.”
How can I simplify farm management?
Inheriting land can be both exciting and overwhelming. Understanding your options is essential to making informed decisions that align with your personal and financial goals. Farm management services can make managing a farm look simple. These services can handle everything from regular, in-person farm visits to leveraging buying power to get the best price on farm inputs.
“Farming is not easy, and it’s common for people who’ve inherited land to look at the income and receipts and ask ‘what’s going on here?” Strom said. “A comprehensive farm management company can sit down and explain everything, how your expenses and incomes benchmark to the entire industry, and what the options are for improving your return on investment.”
Learn more about MWA’s comprehensive farm management services here or contact us at info@mwallc.com.