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Creating a Flexible Swine Building Rental Agreement

William Edwards and, Larry McMullen (June, 2015)

Summary

With volatile hog prices and the growing turnover of producers, there is renewed interest in leasing swine production facilities. One method of renting swine facilities is to develop a flexible rent schedule. The advantage of this innovative rental arrangement is that the rental fee rises and falls with changes in the local monthly hog price. Allowing building rents to fluctuate with the price of hogs reduces risks for producers who need to keep their production costs low to remain competitive. Also, the flexible rent schedule provides an income for former swine producers who still have value left in their facilities.