DEKALB, Ill. — Tillable assists landowners with price discovery.
“What we found is that $32 billion changes hands every year for renting farmland,” said Jamieson Potter, vice president of sales for Tillable. “So, even though it’s a large marketplace, there’s very little good data out there.”
Tillable is an online service that connects landowners with farmers.
“We believe the best person equipped to tell you how much your farmland is worth is actually a farmer,” Potter said. “But that doesn’t mean you should just ask one farmer. We think it should be in a competitive situation, where you get multiple offers.”
Farmland has some interesting characteristics different from other investments, including the improvement in productivity.
“Productivity has improved three times since the 1960s, so the same acre is producing three times as much as it did in 1960,” Potter said.
Farmland performance has been much better than gold, he said.
“Over a long period of time, farmland has been a pretty stable, strong investment, and a lot of people retire on their farmland,” he said. “But it is not stock, and nobody is making decisions for you.”
Farmland doesn’t run itself, Potter said.
“You need the right people farming it to maximize performance,” he said.
Your Money’s Worth
Since farmers deal with ups and downs in markets each year and a variety of weather conditions, calculating cash rent can be a huge challenge.
“You don’t know if it is going to be a good or bad year,” Potter said. “I wish I could tell you there’s a silver bullet or magic formula to come up with rent.”
About 40 percent of people in Illinois don’t have a lease for their farmland, he said.
“You should have a lease because it protects you, and it protects the grower,” he said.
Landowners likely will use either a cash rent lease or a flex lease.
“I think the flex lease is a really good option for a lot of people,” Potter said.
A variety of formulas can be used to calculate a flex lease.
“Data for the formulas is really key to making it all work,” Potter said. “The best-case scenario is real data from your farm.”
It is important for landowners to receive soil management information from the farmers renting their land.
“It’s your asset, so you want to make sure nutrients are being put back into it,” Potter said. “You should sit down with your farmer and have a conversation to understand what he’s doing.”
Landowners who utilize Tillable will receive multiple offers from farmers who are interested in renting their land.
“This is not an auction. You get to choose who farms your land,” Potter said. “You will get information like the experience of the farmers, the techniques they use and their offer.”
By receiving multiple offers, he said, landowners don’t have to negotiate or calculate rent.
“I really can’t tell you what your farm is worth, but someone who has been farming for 40 years can look at maps, the productivity index and a bunch of information to get a fairly good idea of what the yields will be and then make you an offer,” he said.
“We did 7,000 acres in our Beta period and most people kept the same grower, but used the information to negotiate better,” he said. “The farms ranged in size from 850 to 40 acres.”
Landowners who utilize the services of Tillable will have a page for their farm.
“You will get yield information and comparisons to other farms that are similar in soil and other characteristics in the county,” Potter said.
“We feel a lot of land is under-rented, but we’re not here to drive the price up,” he said. “We’re here to help people get the fair-market value and connect with someone who will get the most out of your land.”
Tillable offers automated payments.
“We set up a direct transfer for the payments,” Potter said. “It’s convenient for people, and then we have real data on what the person is paying for the field because we don’t want to rely on self-reported data.”
“Farmers grow commodities, but good farmers are not commodities,” he said. “What you get out of your land really depends on how good the farmer is, so you need to find the right person.”
For more information about Tillable, call 833-845-5225 or go to www.tillable.com.