By Heather Gessner
Oral leases for agriculture ground in South Dakota automatically renew on September 1st. If either the landowner or tenant wishes to make changes to any of the components of the oral lease written notice must be given, in writing, by the September first deadline.
Once written notice is given the oral agreement continues until March 1, 2016 at which time a new contract can take effect. This allows the tenant to finalize any harvesting or grazing on those acres. An exception to this would occur if either landowner or tenant fails to live up to the terms and conditions of the original lease.
The automatic renewal includes all the current terms and conditions in the existing lease, including but not limited to: who the land is rented to, when payment is due, the per acre rate, stipulations for grazing, hunting or other land use restrictions, and any weed control or fencing agreements, etc.
Why September 1st?
September 1st allows time for management decisions to change based on the continuation of the agreement or any changes to the lease to be incorporated by the current renter. If the tenant knows they will be farming the land in the upcoming year plans for fall tillage, fall fertilizer applications, winter wheat or cover crop planting may be done, as well as grazing plans for corn residue can be made. If the land will be changing hands in March the decisions will likely be different.
What is the average rental rate?
The top question asked and discussed is the average rental rate in a given area. South Dakota State University (SDSU) and the United States Department of Agriculture-National Agriculture Statistics Service (USDA-NASS) provide average land value and rental rate information annually. Both of these surveys are publically available. While similar in nature the surveys target different audiences for the rental information. The SDSU survey targets agriculture industry professionals (bankers, land brokers/auctioneers, extension staff etc.) and the USDA-NASS survey targets producers (farmers and ranchers).
The surveys can be found by clicking these links:
- USDA-NASS Cash Rents and Land Value Maps
- South Dakota Agriculture Land Market Trends 1991-2015
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