By: 4R Plus
November 2021

Sharon Krause
Sharon Krause says relationships are key when connecting with the right tenants.

Fifty-three percent of Iowa’s farmland is leased, meaning more than half of the state’s 30.6 million acres is not farmed by the person who owns it, according to the 2018 Iowa Farmland Ownership and Tenure Survey conducted by Iowa State University. And 34% of those non-operating landowners (NOLs) have no farming experience.

On the surface, that disconnect might signal challenges when it comes to spreading 4R Plus practices on rented land. But these investors are after long-term returns, and conservation is a top priority. This drive to leave the ground better than when they started is a common goal for landowners like Sharon Krause and Selden Spencer.

Krause’s family inherited Teamwork Ranch in Clarke, Warren, and Madison counties in south-central Iowa. The ground is cash rented to roughly 20 tenants, with help from a farm management firm. Krause, a former engineer and an advisor on many boards, also owns and operates Dalla Terra Ranch in Dallas County.

Spencer is a retiring neurologist who has always been interested in farming and “trying to do right by nature.” He owns land in Hamilton County and works with a local farm manager that farms and manages the operation.

Connections and reputation matter

Selden Spencer
Selden Spencer says it’s important to make adjustments along the way with his land manager when implementing 4R Plus practices.

Relations were key for Krause and Spencer when it came to finding people to lease their ground. Spencer’s farm manager previously managed his wife’s family farm and was willing to give things like cover crops and bioreactors a try, even if they were challenging to implement.

Spencer describes his manager as “both old school and new school,” who “deep down is interested in trying to do the right thing by the land and improve the soil long term.” His manager has “tremendous respect in the community as a very successful farmer,” according to Spencer.

Relationships were also key in connecting Krause with the right tenants. Their farm manager used to work for the family when they had a cattle operation. “He lived in the area, knows all of the operators and has personal relationships with them,” she said. “When you are in the neighborhood, you know who’s doing the right things.

“The conservation lens is really informing the farm purchases we make,” Krause continued. She looks for ground where commodity crops and conservation practices can work in harmony with one another to improve water quality and rebuild/preserve precious topsoil.

Give-and-take needed to partner on 4R Plus practices

Krause and Spencer believe the landowner/tenant relationship is a partnership built on respect, flexibility, and honest, two-sided communication.

Spencer meets with his farm manager monthly and the manager loops him in as needed on decisions like booking inputs, many of which Spencer said are best made by his manager. “I think you should be looking for a tenant or farm manager who will be willing to consider options that are beneficial to the land and be honest with you about whether they’re going to work,” he said.

He also said it’s important for the landowner to make adjustments along the way with rent or cost-sharing when trying something new.

The Krause family also has skin in the game. They pay for the seeding of cover crops across roughly half their tillable ground each season. The tenants are responsible for termination, with Krause observing they haven’t seen any decline in lease rates or resistance to participation since they have longer-term tenants who “recognize the investment we’re making in cover crops that provide long-term soil health benefits, including carbon sequestration and improved organic matter.”

Likewise, when those tenants draw their attention to a grass waterway that needs repair, for example, “they’ll help us by contributing the labor and we’ll pay for the inputs.” 

Krause also invests in regular soil testing and funded a soil loss study, the results of which were shared with tenants. She says the data confirmed their decision to prohibit tilling practices on all leased ground.  “The topsoil, nutrient and ecosystem loss in a tilling operation is catastrophic.” 

Transparency key when implementing soil health practices

The Krause family’s cash-rent contracts are for one to two years, but so long as the relationship and the soil tests are going well, “we prefer to continue working with long-term partners,” Krause said. They look for somebody “who is being a little bit more thoughtful in terms of their product selection and how they operate the farm.”

Expected conservation practices are spelled out in the lease on the Krause family farms, giving tenants a clear road map and benchmarks. Spencer’s arrangement is more flexible.

Both landowners believe long-term arrangements can encourage tenants to invest in 4R Plus practices that improve a farm’s long-term profitability, and both are driven by a need to leave the farm better than when they acquired it.