Flexible Farm Lease Agreements: What They Are and Why Minnesota Landowners Love Them
Flexible Lease Agreements in Minnesota
If you’re a landowner in Southeast Minnesota thinking about leasing out your farmland, you’ve probably heard about flexible lease agreements. But what exactly makes them different from traditional leases? And are they right for your land?
At Bunne Farms, we’ve worked with dozens of landowners across Fillmore, Mower, Dodge, and Olmsted Counties to create lease structures that meet both financial and operational goals. Flexible leases have become increasingly popular because they offer better alignment with market realities, more balanced risk-sharing, and the ability to fine-tune agreements each season.
In this blog, we break down what flexible lease agreements are, how they compare to other models like cash rent and crop share, and why more landowners are choosing them in today’s farming economy.
What Is a Flexible Farm Lease?
A flexible lease is a type of farm rental agreement where the final rent amount is adjusted based on certain variables—most commonly crop yields, commodity prices, or a combination of both. Instead of agreeing to a fixed amount per acre upfront, the landowner and tenant share in the risk and reward of the farming season.
Common structures include:
- Yield-Based Flex Leases: Rent increases or decreases depending on actual crop yield per acre.
- Price-Based Flex Leases: Rent fluctuates based on commodity market prices at harvest.
- Revenue-Based Flex Leases: Rent is calculated as a percentage of gross revenue from the crop.
- Hybrid Models: A base rent with bonuses or adjustments tied to yield or price thresholds.
Flexible leases often use a base rent to provide stability, with performance-based adjustments built in to reflect actual outcomes.
Benefits of Flexible Lease Agreements for Landowners
Flexible leases are especially valuable in times of commodity market uncertainty and variable weather patterns. Here’s why landowners in Southeast Minnesota are embracing this approach:
1. Potential for Higher Returns
Instead of locking into a flat cash rent, flexible leases give you the opportunity to earn more when:
- Yields exceed expectations
- Crop prices surge during harvest
- Farm performance improves through better management
2. Shared Risk and Incentives
By aligning landowner and tenant interests, flexible leases encourage:
- Better stewardship of the land
- Optimal timing of inputs and harvest
- Honest communication and transparency
3. Market-Responsive Income
If commodity prices rise, your income rises too. You’re not stuck with outdated lease terms that underperform when the market is booming.
4. Customizable for Every Property
At Bunne Farms, we design flexible leases around your goals. Whether you prioritize soil health, long-term value, or near-term income, we’ll tailor an agreement to match.
How Flexible Leases Compare to Cash Rent and Crop Share
| Factor | Cash Rent | Crop Share | Flexible Lease |
|---|---|---|---|
| Income Predictability | High | Low | Medium (base + variable) |
| Upside Potential | None | High | Medium to High |
| Risk for Landowner | Low | Medium | Shared |
| Involvement Required | Low | High | Medium |
| Customization Level | Low | Medium | High |
| Best For | Passive income seekers | Involved owners | Balanced approach seekers |
Flexible leases offer a middle ground between the low-involvement nature of cash rent and the high engagement of crop share.
How We Structure Flexible Leases at Bunne Farms
Bunne Farms offers flexible lease structures that work for both parties. We ensure transparency by:
- Establishing a clear base rent
- Defining yield and price benchmarks in writing
- Using trusted third-party data (USDA, local elevators) for price validation
- Providing regular crop and input updates
- Offering end-of-season financial summaries
Our team handles everything from documentation to operation—so you enjoy the benefits without the hassle.
Why Landowners in Southeast Minnesota Prefer Flexibility
Local Weather Variability
Minnesota’s weather can make or break a season. Flex leases account for nature’s unpredictability.
Market Volatility
Corn and soybean prices can swing $1–2 per bushel in a season. Flexible terms let you capture that upside.
Transition Planning
Many landowners use flexible leases during estate transitions, land inheritance, or while preparing for sale. It offers short-term control without long-term commitment.
Soil Stewardship
When tenants know landowners have a stake in the outcome, they’re more likely to invest in long-term sustainability practices like:
- Proper rotation
- Reduced compaction
- Precision nutrient management
Bunne Farms is deeply committed to these practices and works collaboratively with every landowner we lease from or farm for.
Real Example – Flexible Lease in Fillmore County
In 2023, a 160-acre parcel in Fillmore County was under a yield-based flexible lease with Bunne Farms. The lease included:
- $200/acre base rent
- Bonus of $20/acre for yields exceeding 200 bu/acre
- Additional $10/acre if corn price exceeded $6.00/bu
The season produced a 210 bu/acre average with a $6.35 corn price. Total payout: $230/acre. The landowner gained $4,800 more than a standard cash rent agreement, with no additional involvement or risk.
FAQs About Flexible Lease Agreements
Do flexible leases require legal paperwork?
Yes. All terms should be outlined in a written lease. We provide professionally prepared documents with every agreement.
Can I switch to a flexible lease mid-year?
It’s best to start with a new lease year. We typically finalize agreements before planting begins in spring.
What if yields or prices are below average?
That’s where base rent comes in. You’ll still receive a guaranteed amount, even in a down year.
Can I combine flexible leases with custom farming?
Yes. Some clients structure agreements where we manage the land (custom farming), and compensation is performance-based. It offers even more control.
Let’s Build a Flexible Lease That Works for You
Whether you want to earn more from your farmland, reduce risk, or improve communication with your farm operator, a flexible lease agreement may be the solution. Bunne Farms has helped dozens of landowners across Southeast Minnesota lease smarter—without sacrificing income or peace of mind.
Call Joe at
(507) 251-3629 for a free consultation about flexible lease options for your land.
