Outline of Farm & Ranch Land Management Services

I. Property and Owner:

  • Determine the Owner’s annual and long-term goals for the property, including: physical operation, financial objectives, risk involvement, and other preferences.
  • Research and analyze the property’s capabilities & limitations, including: acreages, access, soils, water rights, buildings, equipment, climate, community, fencing, livestock water, winter feed & crop production, government regulations, and potential environmental concerns.
  • Determine highest and best use according to the property’s capabilities and Owner’s goals.

II. Management Services:

  • Create annual & long-term crop and livestock Operating Plans, including: cropping systems, grazing rotations, marketing programs, insurance recommendations, maintenance requirements, and inventories of buildings, equipment & commodities.
  • Based on the Operating Plan, create an Operating Budget for Owner’s final approval. Interview current Operator or research and evaluate prospective Operators to determine: agricultural skills, financial strengths, machinery and livestock capabilities, and overall strengths and weaknesses.
  • Create, negotiate, and sign the proper written lease between Owner and Operator.
  • Coordinate with Operator such things as: crop rotations & acreages, seed, chemical, fertilizer, livestock stocking rates, grazing rotation, fencing and water sites.
  • Purchase necessary inputs while obtaining best prices and qualities available.
  • Review Operator’s practices and timeliness, offer recommendations when needed.
  • Continuously monitor commodity markets in order to implement marketing plan.
  • Monitor and pay real estate and personal property taxes; monitor water rights; evaluate potential government programs; comply with regulations.
  • Verify and approve items of income and expense; maintain proper banking arrangements; collect income and pay expenses on a timely basis; computerize bookkeeping records.
  • Provide periodic reports of physical factors, including: weather, planting, cultivating, harvesting, livestock operations, marketing, Operator progress.
  • Report: quarterly and year-end profit/loss statements with comparison to budget, funds availability, 1099 reporting, and annual summaries for tax preparation by your CPA.

III. Management Contract

The management contract creates an agency relationship, whereby Agri Affiliates (Manager) becomes an agent of the Owner. The agent thus has a fiduciary responsibility to the Owner, while the Owner empowers the agent to complete certain functions with the full authority of the Owner. The management contract is a legal document outlining responsibilities and authorities of both the Manager and Owner. In addition to many other items, the contract defines:

  • Scope of Management: The authority and responsibility of Agri Affiliates to provide proper management of the property, within the Owner’s best interests.
  • Handling Owner’s Funds: The authority to handle income and expense for the property, including the type of bank checking account, and the frequency of accounting reports to Owner.
  • Period of Management: The time interval for which management is provided, typically in increments of one year, and the date for notice of termination by either Owner or Manager.
  • Owner’s Responsibilities: That Owner shall have liability insurance covering the property, and that Owner will timely fund the Operating Budget as approved by Owner and Manager.
  • Management Fees: The fee structure and timing of collection, including the definition of Owner’s gross income, and the services included within these fees.

In addition to the management contract and individual State laws, management services are also governed by the state Real Estate authorities. This typically includes an annual state audit of the trust accounts used for handling the Owner’s funds. Agri Affiliates also maintains both Business Owners Liability & Errors and Omissions insurance. Agri Affiliates is the Agent of the Owner, responsible to protect the Owner’s best interests.