Ag Alert November 29, 2023

NATIONWIDE NEWS

Risk management is key for farm landlords, tenants

The following information is provided by Nationwide ® , the No. 1 farm and ranch insurer in the U.S.* The farmland market is red hot. Though such a bullish marketplace is a boon for landowners, it also changes the game for tenants who depend on rented land for a large share of their crop revenue. High prices make it even more important to make sure everyone involved has the right insurance coverage in place. Complicating the equation for lessees is the recent rise in absentee farmland own- ership. According to a U.S. Department of Agriculture report**, around 40% of the land farmed in the U.S. is rented. Of that share, around 31% is owned by an absen- tee or nonoperator, a number that con- tinues to rise, especially as active farmers retire and sell land. The combination of these trends creates year-over-year operational and manageri- al challenges for leasing farmers and their landowners. One of those is ensuring that both parties are adequately managing the risk of a land lease for which the two parties may be thousands of miles apart. In most cases when a farmer rents land from an absentee landowner, risk manage- ment responsibilities are split between the two parties. Each lease should spell out who

is responsible for different operational and management responsibilities. And what is fair is not always equal. For example, if adding improvements like tile drainage can boost the long-term productivity of a field, installation costs should be shared based on the equity it creates. If a lessee anticipates renting the land for only one year, he or she should not bear as much cost as the landowner, who will likely see greater value in the form of higher rents over time as a result of the improvement. If such improvements are part of a mul- tiyear leasing strategy in which the lessee will remain in the picture, he or she will likely pay a larger share of the cost. In gen- eral, the duration of a lease often is a ma- jor contributor to how land improvement costs are spread between the landowner and renter. Think about how land is used. There are several factors that influence how farmland is insured. First, it’s important to consider the basics of the property and its intended purpose. Some land is obviously for cropping, but grassland or pastureland may have multiple uses. A piece of land’s intended uses should be accounted for in both the written lease and the chosen in- surance coverage.

Coverage options also vary widely based on lease land’s use. A basic homeowners policy rarely covers all of the operational risk of leased farmland. Sometimes en- dorsements cover those specific risks, but in other cases, altogether different policies specifically designed for farmland are the best solutions. Especially with absentee leases, it’s always a good idea to have regular meetings during which the lessee can update the landowner on all activities on the leased land and how they impact things such as lease price and optimal insurance coverage options. Talk with your insurance agent. No matter how you’re involved with farming—whether you’re currently farming or new to owning or renting farmland—it’s important to talk

with your local Nationwide Farm Certified agent. Nationwide is the only farm insur- ance company that trains and certifies its agents. When you see that an agent is Nationwide On Your Side Farm Certified, you can be confident you’ve found a trusted, knowledgeable advisor. Visit aginsightcenter.com/ farmlandownership to download our free Farmland Ownership Protection Guide and to learn what we know about farmland. *A.M. Best Market Share Report 2021. **www.ers.usda.gov/publications/pub- details/?pubid=74675. Nationwide, the Nationwide N and Eagle, and Nationwide is on your side are service marks of Nationwide Mutual Insurance Company. © 2022 Nationwide

CASH BACK $6,000 or CASH BACK $6,000 or

UP TO 0 UP TO 0

% FINANCING FOR 60 MONTHS on PowerStar ™ Series tractors % FINANCING FOR 60 MONTHS on PowerStar ™ Series tractors

Harvest the best deals of the year! PowerStar™ Series tractors deliver all the power you need to tackle your everyday tasks. The 5-model, 65-100 PTO hp lineup can’t be beat for utility and comfort — or savings when you take advantage of Value Bonanza year-end deals. Hurry, offer ends December 31, 2023. Stop in today for complete details or visit nhoffers.com.

FAIRFIELD GARTON TRACTOR INC. 707-425-9545 www.gartontractor.com FRESNO GARTON TRACTOR INC. 559-485-9090 www.gartontractor.com MADERA GARTON TRACTOR INC. 559-674-2496 www.gartontractor.com MERCED N&S TRACTOR 209-383-5888 www.nstractor.com

MODESTO GARTON TRACTOR INC. 209-538-0911 www.gartontractor.com NEWMAN GARTON TRACTOR INC. 209-862-3760 www.gartontractor.com SANTA ROSA GARTON TRACTOR INC. 707-586-1790 www.gartontractor.com STOCKTON GARTON TRACTOR INC. 209-948-5401 www.gartontractor.com STRATFORD N&S TRACTOR 559-947-3301 www.nstractor.com

TULARE GARTON TRACTOR INC. 559-686-0054 www.gartontractor.com TURLOCK GARTON TRACTOR INC. 209-632-3931 www.gartontractor.com UKIAH GARTON TRACTOR INC. 707-468-5880 www.gartontractor.com WOODLAND GARTON TRACTOR INC. 530-615-2828 www.gartontractor.com

H elle Farm Equipment, Inc. 1 4155 Route 136, Dyersville, IA 52040 h ttps://www.hellefarmequipment.com 5 55-555-5555

1 For commercial use only. See your participating New Holland dealer for details and eligibility requirements. Cash back applied at time of sale. Offer is nontransferable. Offer ends December 31, 2023. Offer subject to change or cancellation without notice. 2 For commercial use only. Customer participation subject to credit qualification and approval by CNH Industrial Capital America LLC. See your participating New Holland dealer for details and eligibility requirements. Eligible equipment limited to dealer inventory in stock. Previous retail sales are not eligible. Down payment may be required. Offer good through December 31, 2023. Not all customers or applicants may qual- ify for this rate or term. CNH Industrial Capital America LLC standard terms and conditions will apply. This transaction will be unconditionally interest free. Taxes, freight, setup, delivery, additional options or attachments not included in suggested retail price. Offer subject to change or cancellation without notice. ©2023 CNH Industrial America LLC. All rights reserved. CNH Industrial Capital and New Holland are trademarks registered in the United States and many other countries, owned by or licensed to CNH Industrial N.V., its subsidiaries or affiliates.

November 29, 2023 Ag Alert 9