Master of Science / Department of Agricultural Economics / Mykel R. Taylor / Land value research has been conducted over many decades with efforts being focused on a broad spectrum of topics encompassing many different issues. The research in this thesis will focus on understanding the relationship between net farm income, cash rent, and land value. This research could provide insight and direction in determining future land value behavior. Understanding land prices is important to many different segments of the agricultural industry. Those involved in the industry want to know where land values are going and what the future looks like. Although certain segments may not be directly affected by land value movements, if value decreases the environment of the agriculture industry is changed. Farmers and ranchers are interested in future land values as they make purchase and sale decisions or as they consider future growth of their operation. Agribusinesses understand the affect a decrease in land value would do to farmer’s decisions regarding capital purchases. Additionally, agriculture finance institutions are interested in the future movement of land value as they are concerned about the affects adverse movements in land value would have on their customer’s balance sheet and ultimately their collateral position. In this paper the relationship between land value and cash rent; where land value is a function of historical cash rent and cash rent is a function of net returns to the land will be tested for its’ existence in Kansas. Data were collected for the nine crop reporting districts in Kansas from 1973 through 2012.

<p dir="ltr">This study explores the net return and risk associated with different farmland leases, focusing on the tenant’s perspectives. The types of leases investigated include cash rent, crop-share, and eight flex leases. Utilizing data from a case farm in west-central Indiana and employing the @Risk simulation software, the study assesses the financial performance and risk exposure of each lease type. The study's objectives include evaluating net return and risk through simulation models. Hypotheses suggest crop-share leases exhibit lower tenant risk, cash rent leases present higher tenant risk, and flex leases more effectively distribute risk between tenants and landlords. Results indicate that, for risk-averse operators, crop-share leases prove advantageous, while cash rent leases offer higher net returns at the expense of increased risk. Flex leases provide a balanced alternative, mitigating risk while achieving higher net returns than a crop share lease. Stochastic dominance analysis supports the suitability of crop-share and specific flex leases for various risk preferences. Downside risk analysis emphasizes the importance of considering the lower tails of net return distributions. The crop-share lease consistently demonstrates more favorable downside risk characteristics, making it an appealing choice for risk-averse tenants.</p><p dir="ltr">In conclusion, the study contributes valuable insights into the complexities of farmland leasing, offering a nuanced understanding of the trade-offs between net return and risk for different lease types. The results provide practical guidance for tenants seeking leases aligned with their risk preferences and financial goals.</p>

Master of Agribusiness / Department of Agricultural Economics / Bob Burton / The purpose of this thesis is to compare the net income and risk associated with custom farming, cash rent, and crop-share. This analysis will help provide insight on the best option for my 40 acres of farm land, which I recently was given from my mother. The 40 acres is located in Codington County, SD and has been previously in a corn, soybean, and wheat rotation. Another goal of the thesis is to create a business plan for Hauger Farm, which will lay out the activities involved for custom farming. The 40 acres will continue to be in a corn, soybean, and wheat rotation. A 12-year analysis was developed to determine the net income and risk associated with custom farming, cash rent, and crop-share. The analysis consisted of historical data from the past nine years while predicting the next three years. After creating the net income statement, the option providing the most income over the long-run was to have the land custom farmed. Custom farming also brought the most income variability or risk; while cash rent showed to have the lowest risk with the least variable income.