Flexible Farm Lease Agreements: What Minnesota Landowners Need to Know
What Minnesota Landowners Need to Know
If you're a landowner in Southeast Minnesota looking to lease your farmland, but traditional lease structures don’t quite meet your needs, flexible lease agreements may be your best solution. These agreements provide the ability to adjust terms based on market conditions, crop yields, and landowner goals—offering both financial upside and peace of mind.
At Bunne Farms, we’ve helped landowners in Fillmore, Dodge, Mower, and Olmsted counties create flexible lease contracts that protect their land and generate steady income. In this guide, we’ll explain what flexible leases are, how they compare to other lease types, and what makes them a smart choice for many Minnesota property owners.
What Is a Flexible Lease Agreement?
A flexible lease (also called a flex lease) is a farmland rental agreement that adjusts the rent amount based on certain performance factors, such as:
- Crop yield
- Market price
- Gross revenue
Unlike a flat-rate cash rent agreement, flexible leases ensure the landowner shares in the financial success of the farm while still having a guaranteed base rent in many cases.
This type of lease is increasingly popular among landowners who want to:
- Stay engaged in their farm’s performance
- Share in the upside of strong commodity markets
- Avoid the full risk of farming themselves
Types of Flexible Lease Agreements
There are several types of flex leases used in Southeast Minnesota. Here are the most common:
1. Yield-Based Flex Lease
Rent is determined by actual harvested yield (e.g., bushels per acre), multiplied by a predetermined price.
Example: 200 bu/ac x $5.50 = $1,100/ac rent
2. Revenue-Based Flex Lease
Rent is a percentage of the total crop revenue, often with a minimum or base rent.
Example: 30% of gross revenue from corn sales, with a $200/ac floor
3. Price-Based Adjustment
Rent increases or decreases based on changes in corn or soybean market prices over time.
These variations allow landowners to benefit when prices or yields are high, while protecting tenants from overpaying during weaker years.
Benefits of Flexible Lease Agreements
Share in Upside Market Potential
If corn or soybean prices surge—or if it’s a high-yield year—you earn more.
Align Incentives with Your Farmer
When both parties benefit from success, there's more motivation to protect the land and maximize production.
Build Long-Term Relationships
Flexible leases foster trust and transparency, which leads to longer, more stable partnerships.
Balance Risk and Reward
You may receive less income during a low-yield year, but many leases include a minimum rent to protect against total loss.
Custom Fit
Each lease can be tailored to your land, crop history, tenant experience, and income goals.
Challenges to Consider
While flexible leases offer unique benefits, they also require careful setup and management:
- Recordkeeping: You’ll need reliable yield data and market price benchmarks.
- Transparency: Clear agreements and honest reporting are essential.
- More Involvement: Landowners should expect to stay a bit more involved than with a flat cash rent model.
This is where working with a trusted partner like Bunne Farms becomes essential.
Why Southeast Minnesota Landowners Are Choosing Flex Leases
In Southeast Minnesota, crop prices and yields can fluctuate based on weather, markets, and input costs. A flexible lease can offer protection and potential in a changing environment.
Bunne Farms works with landowners across:
- Fillmore County
- Dodge County
- Mower County
- Olmsted County
We help landowners design custom lease structures that:
- Ensure fairness and profitability
- Promote sustainable land use
- Create long-term, win-win relationships with local farmers
How Bunne Farms Helps Structure Your Flexible Lease
We simplify the process by offering:
- 📊 Crop and land productivity analysis
- 💬 Lease structure consultations
- ✍️ Assistance drafting clear, written agreements
- 📈 Seasonal performance and yield reporting
Whether you’re leasing land for the first time or want to switch from cash rent to a more dynamic structure, we’ll help guide the way.
FAQs About Flexible Lease Agreements in Minnesota
How do I know which lease structure is best for my land?
We recommend starting with a land evaluation. Factors like productivity index, crop history, and your income goals help determine the ideal lease model.
Can I switch from a cash rent lease to a flexible lease next season?
Yes. Most leases are written for one-year terms with the option to renegotiate annually. We help landowners make the transition smoothly.
What kind of reporting is required from the farmer?
A standard flex lease requires yield documentation (scale tickets, elevator receipts), and in some cases, sales price confirmation.
Is a lawyer required to draft a flex lease?
While not required, legal review is recommended. Bunne Farms can help you draft a detailed lease or refer you to ag-specific legal professionals.
Let’s Build a Flexible Lease That Works for You
If you’re ready to upgrade your farmland lease with a performance-driven model, Bunne Farms is here to help. Our flexible lease services give you:
- More control than traditional leases
- Higher earning potential
- Confidence that your land is being managed right
Whether you're in Ostrander, Preston, Grand Meadow, or anywhere in Southeast MN, let’s create a lease that fits your goals and protects your land.
📞 Call Joe at (507) 251-3629 to schedule your free land lease consultation.
📍 Serving Southeast Minnesota – Based in Ostrander
