Instructions: The landlowner enters values in the olive green cells, unless otherwise noted. See notes for explanation and more information.
Landowner Cost Estimate         Notes  
Land and facility investments (long-term) Agricultural Value
Useful life (years)
These costs are used to estimate the opportunity cost of land value, land taxes, depreciation, and interest.
Land value   n/a  
Irrigation equipment and infrastructure  
Liming  
Long-term land prep/development  
Grain bins  
Other buildings
Machinery provided to tenant  
Other long-term investments  
         
Item Valuation Rate Annual Charge        
Land charges        
Land interest   This is either the interest rate currently paid on the land loan OR an estimated alternative rate of return the land were sold and the value were invested instead. This rate generally drives the implied rental rate because land values are typically greater than other assets. This rate of return may be 0 if the landowner owns the land outright and is intent on keeping it; it may be more if they are weighing the option to sell. Potential rates include the estimated rate of return on a savings account, or if invested in the stock market, for example. In any case, this value is often subject of discussion and negotiation.)
Land taxes      
   
Depreciation        This is estimated based on your entries above.  
Interest on (non-land) long-term investment items   This is estimated based on your entries above and interest the rate you enter.  
Hauling charges      
Annual land development costs          
Costs of running irrigation equipment annually      
Repairs       
Liability insurance       
Road/access maintenance and repairs      
Fertilizer      
Weed control      
Value of labor and management      
Other contributions
Total land ownership charges
Landowner's contribution ($/bu) 
This is the sum of the calculated total land ownership charges, above, divided by the number of bushels produced. The estimated yield and acreage are entered on the tenant tab.
Landowner's contribution ($/cropped acre)        This is the total land ownership charges (above), divided by the acres of the lease entered on the tenant's tab.   
Instructions: The tenant enters values in the olive green cells, unless otherwise noted. See notes for explanation and more information.
Notes:
Tenant Cost Estimate  
Revenue calculations Yield (bu/acre) Value ($/bu) Acres Gross value ($)
Estimate these if you are calculating payment in the future. Use actual values if you are calculating the rate at the end of the growing season.
Value of Production  
Crop insurance payments        
Additional value of farm program payments (ARC and PLC)        
Total revenue        
Tenant's Contribution: Long-term investments    Value/cost Useful life (years) Annual cost   Many conservation practices and land development charges imply a large up-front charge that provides benefits over several years. Here we assume the tenant holds a lease that is at least as long as the lifespan of their longest long-term investment and so can realize those benefits over time.                     
Liming        
Perennial crop/tree establishment costs        
Other long-term investments on leased land    
Tenant's Contribution: Annual investments            You can find estimates of many of these costs from regional enterprise budgets, if you do not know your own. While Montana does not publish enterprise budgets regularly, Idaho and North Dakota offer good nearby resources. See https://www.uidaho.edu/cals/idaho-agbiz/crop-budgets and https://www.ndsu.edu/agriculture/ag-hub/ag-topics/farm-management/crop-economics/projected-crop-budgets
Depreciation (annualized costs of long-term investments)    
Seed        
Herbicide        
Fungicide        
Insecticide        
Fertilizer        
Crop insurance premiums        
Fuel & lube            
Repairs        
Drying        
Hauling        
Custom hires        
Labor         Include hired labor and if desired, the value of your own time. Many tenants will consider the net return over the lease payment to be the return to their labor and management. In that case, to avoid counting twice, do not include the value of your time.  
Irrigation costs        
Road/access maintenance and repairs      
Other direct expenses        
Operating interest        
Other expenses         To evaluate long term profitability, also add indirect costs such as office expenses and overhead. By leaving these items out, you are just evaluating the return to this lease during the growing seasons specifically.  
 
Tenant's Contribution (operating costs in $)        
Contribution per bushel
Net Returns ($) over direct expenses (not counting lease expense)
Net return over direct costs per acre (not counting lease expense)
Rental Rate Calculations   Notes:  
Landowner Tenant Total
Value of production from leased land         This is the total value of production calculated from the tenant's estimated yield, value, and acreage.  
Estimated contribution   
These are the total contributions tallied from the landowner and tenant sheets, respectively. 		 
Percent contribution (shares)   
These percent contributions are calculated as each party's contribution, divided by the sum of the contributions from both the landowner and tenant. 		 
Net return allocation (total lease payment)        
This is the landowner's contribution share multiplied by the total value of production. 		 
         
Implied Cash Rental Rate ($/acre)        This is the net return allocation above, divided by the number of cropped acres entered by the tenant. Note that the lease rate here is based on the number of cropped acres entered by the tenant.
Tenant net return to labor ($/acre)  over direct costs and lease payment. Info button: This is the net returns over direct costs per acre from the tenant's sheet, minus the implied cash rental rate above.)
Landowner net return ($/acre) from lease over direct costs.
 This is the implied cash rental rate above, minus the landowner's contribution per acre on the landowner sheet.