Anyone else own a farm?

[street]

Excellent summary. Thank you and I’m glad you are being compensated for natural gas extraction. If the coal rights owner wanted to claim their coal, would the farmer above whose predecessors sold the mineral rights have any say about where the strip mine goes?

I maybe speaking out of turn, but I can add to your question from experience. I my experience you don't have a say to where they strip mine or drill when natural resources are extracted from below when you don't have the royalties/rights.

I will say that most companies will work with the surface owner to accommodate them to their best ability. I will say also that isn't always the case and they drill or mine where they want too, and they have that right.

 

[Winemaker]

I have to agree with Street, with some exceptions.

That is dependent on Fed and state law. A coal owner is allowed to exercise his right to the coal, however, most mining law requires that the surface owner be compensated for the trouble and that the surface must be returned to its pre mined condition, unless waived /altered by the surface owner. Most coal miners would not adversely exercise their right, as it would end up tied in the courts. But the surface owner will have some say, as surface owner must be able to exercise their right to enjoy the surface. Here in PA, there are over 130 coal seams under my property at various depths, formed over the past billion years.

Only my coal rights were separated from my property, most likely because the early gas boom in this area in the late 1800's was accessed by a few shallow wells and the "my" gas would have migrated there. The land owner back then would never have known, and the well owner would never have offered to buy them. These Marcellus and Utica gas reserves are 3 to 12k below my surface.

Interesting enough, a 1973 court case ruled that the coalbed methane gas (the methane that caused so many fires and explosions over the centuries) was actually part of the coal and not part of the oil/gas portion of the property. Hence, this allowed coal companies to drill into their coal seams and de-gas ahead of mining.

 

[socca]

... It is true that cash rent is not a great return but it is basically risk free. ...You can make a much better return if you crop share or farm it yourself. But then you have the risk.

Cash rent might be "risk free" but it's not hassle-free, especially for an absentee landlord. Finding a good tenant if your farmland is in another state can be tricky, especially if you've gradually lost connections to the local rural community over the years.

The type of crop share we do involves a fair amount of admin work, because we deal directly with grain buyers and vendors for our share (50%) of the income and expenses.

We've never had a farmer/tenant beg us to convert to cash rent from crop share, so I suspect that crop share is preferred from the operator's perspective.

Modern American industrial agriculture is an interesting biz. It's much easier to get involved if you have a mentor. "Green Acres" scenarios are likely to end badly.

 

[racy]

Two siblings and I will inherit a farm of 280 irrigated acres. We've already decided we'll sell it; elderly Mother, who still lives there, knows. The 'emotional' question is whether to sell it to the guy currently farming the land (who helps Mom with "Fix Its") or put it up for auction.

 

[street]

I have to agree with Street, with some exceptions.

That is dependent on Fed and state law. A coal owner is allowed to exercise his right to the coal, however, most mining law requires that the surface owner be compensated for the trouble and that the surface must be returned to its pre mined condition, unless waived /altered by the surface owner. Most coal miners would not adversely exercise their right, as it would end up tied in the courts. But the surface owner will have some say, as surface owner must be able to exercise their right to enjoy the surface. Here in PA, there are over 130 coal seams under my property at various depths, formed over the past billion years.

Only my coal rights were separated from my property, most likely because the early gas boom in this area in the late 1800's was accessed by a few shallow wells and the "my" gas would have mpreciuos igrated there. The land owner back then would never have known, and the well owner would never have offered to buy them. These Marcellus and Utica gas reserves are 3 to 12k below my surface.

Interesting enough, a 1973 court case ruled that the coalbed methane gas (the methane that caused so many fires and explosions over the centuries) was actually part of the coal and not part of the oil/gas portion of the property. Hence, this allowed coal companies to drill into their coal seams and de-gas ahead of mining.

I agree with you on all accounts. The surface owner does get compensated for damages etc.. What I don't know with not having to deal with coal is that oil/gas/gravel if landowner doesn't own the royalties/minerals they don't have the say of where (location) they are going to drill or dig. The company has to follow fed/state guideline and laws but after that they can drill/dig any place without landowner's input. These companies have gotten better and will consider landowners requests but don't have too.

 

[Winemaker]

A former employer, when planning to mine coal underground of a property owner, generally would offer to purchase the property, mine underneath, make any necessary repairs, then sell the property back to the original owner for $1. It was good for all involved.

 

[street]

I have oil/gas/coal on my place but don't own royalties. I don't have any wells or mining on my but did have to do some hard nose negotiations to stop them from drilling. I do have coal beds that are visible to the eye in a few places. The old timers had small open private mining pits to extract coal for heating.

 

[Markola]

Thanks for sharing your experience, Winemaker and Street. To me it puts a different spin on “My family has worked this land for generations and it is ours” if a megacorp has the legal right to do mostly what they want to with it anytime their economic conditions dictate.

I talked with a landowner in WV who was having coffee one morning and gazing out across their pasture, when a helicopter with a long probe appeared unannounced and drilled several holes while hovering, like a butterfly’s proboscis over a flower. Then it just flew away.

 

[B-Guy]

As a farm owner, this thread has been enjoyable to see all the different points of view. For some it’s an investment only and is approach as such. On the other end of the spectrum the farm owners like me who wouldn’t sell as we couldn’t see ourselves living anywhere else but on the farm.

It’s a lifestyle choice. When I see land sell nearby, I’m always curious to know what it sold for. Not to see if I would sell but to see how if our estate planning needs modified. Not having children makes it a lot simpler for us as 100% of our estate will be going to various nonprofits.

We can live fairly comfortably off the farm income and other investments. With that said we do live fairly modestly, taking a trip or two each year. We really love living on the farm and that is where I'll always hang my hat.

 

[Sanbenito1]

Yes, we own a small farm about an hour south of Silicon Valley, in CA. We are the fourth generation farming yet, and yes the ownership dynamics have been challenging but relatively peaceful because all of us siblings get along. The farm has become halfway encircled by subdivisions and now, naturally, they are crying about dust from disking the soil, flies from horses (which they feed their food scraps to, though we have asked them not to). It’s disheartening. Speaking of flies, the rich techie circle us constantly, making offers for the land. My sister was in the hospital and she got a call from a d*** developer because “you weren’t replying to my letters”. How he found he is beyond me, but he’s a local and it’s not a big town.

 

[latexman]

My 3 siblings and I inherited a 41 acre farm when Dad passed in 2017. It took us a couple years to realize that 2 wanted to keep it, and 2 wanted nothing to do with it. So, we are currently under contract, since Jan. 2021, with the developer of the next door subdivision to buy it. We hope to close about end-2022. It's been a long journey, and my 3 siblings and I are still good friends, which was our #1 prime objective. #2 was to make enough $ so everyone comes out ahead once the dust settles, which we did.

My 3 siblings and I just got notified of the developer’s neighborhood meeting on 8/17 to make neighbors within 500’ of the farm boundaries aware of the proposed project! Then the plan is, the town board votes on re-zoning in Sept., then a 60 day public comment period, then, hopefully, we close in December! If this plays out, it’ll be 23 months from signing the contract. About time!