Selling a Crop Production Business

Most crop operations are priced off normalized cash flow (often SDE or EBITDA), then adjusted for land and water structure, earnings volatility, and how transferable the operation is. Farms with long, assignable leases, defensible water access, consistent pack-out or grade results, and a team that can run harvest usually earn stronger multiples. Start with Rejigg’s free valuation calculator, then sanity-check the output against yield swings, claim history, and the working capital your next operator will need.

Sometimes. An SBA 7(a) loan is more commonly used to finance the operating business (equipment, contracts, and goodwill) than large amounts of farmland, and lenders still want stable, documentable cash flow. Expect questions about normalized earnings, seasonality, the size of the operating line, and whether the buyer can run the farm without heavy seller involvement. Rejigg’s SBA loan calculator helps you model payments and see what price and terms are actually financeable before you pick an offer.

No. A broker can help, but the 5–10% fee is hard to justify for some crop operations, especially when land, leases, and water documentation drive diligence more than salesmanship. Rejigg is free for sellers and covers the basics owners usually pay for: pre-vetted buyers, digital NDAs, a secure data room for leases, water, and yield history, direct messaging, and an offer-tracking dashboard. You still control who sees sensitive landlord and outlet details, and when.

Many crop deals take 4–9 months, and the calendar matters. Buyers often want diligence and closing that avoid planting, peak labor ramps, and harvest. If your leases, water file, yield and pack-out recaps, equipment notes, and financials are already organized, timelines can shrink. If land control or water documentation is unclear, deals usually stall. Rejigg’s preparation guide and data room help you get buyer-ready before the first serious call.

Equipment usually sits on an asset schedule, but buyers price it based on whether it can hit your planting and harvest windows and what it will cost to keep it running. Expect diligence on hours, maintenance records, in-season downtime, and single points of failure like the one harvester or the one cooling unit you cannot lose. Many LOIs lock a baseline equipment list and then true-up at closing if items change. Rejigg makes it easy to share the schedule with photos and maintenance invoices in one place.

Working capital is the cash and near-cash needed to run the next production cycle, including inputs on hand, prepaids, receivables, and payables. In crop production, timing drives everything, so the business can be profitable and still need a large operating line to cover labor and inputs before settlements arrive. Many buyers set a working capital target so they do not close and immediately have to inject cash. Rejigg’s offer comparison view helps you spot when a higher price is paired with a tougher working-capital requirement.

It depends on your cutoff date and who is carrying the crop risk when the loss happens. Many purchase agreements state that insurance and disaster program proceeds follow the party that owns the crop at the time of the insurable event, with specific treatment for premiums and costs-to-date. This needs to be spelled out if you might close mid-season or before harvest. Rejigg’s due diligence checklist flags these seasonal ownership items early so you do not renegotiate them at the end.

Many buyers push for an asset purchase to avoid taking on unknown liabilities tied to the entity, including employment, compliance, or past contract issues. Sellers may prefer an entity sale for tax or simplicity, but in crop production, some grower numbers, permits, and certifications still have to be re-issued or re-approved, even in an entity deal. Your CPA and attorney should model both structures early because the tax impact can vary a lot. Rejigg helps by keeping entity docs, contract lists, and permit notes organized for faster review.

They show up, especially when the buyer is nervous about the next 1–2 seasons and wants protection from weather, price swings, or transition risk. The hard part is choosing a metric that is fair in a volatile business and cannot be gamed by operating decisions after closing. If you consider an earnout, define operating rules, reporting, and dispute handling in writing, and be realistic about what you can control. Rejigg’s offer comparison helps you see how an earnout changes real proceeds versus a clean-cash offer.

Confidentiality matters in crop production because landlord rumors can threaten lease renewals, and crew rumors can hurt retention right before peak weeks. Most sellers stage disclosure: qualify buyers first, then share sensitive land and outlet details only after an NDA, and time landlord and key employee conversations close to when you need consents. Rejigg helps by vetting buyers, using digital NDAs, and giving you permission controls in the data room so you decide exactly what each buyer can see and when.

Most buyers ask for financials and tax returns, land and lease schedules, water rights and allocation records, yield and pack-out history, claims and deductions support, key sales and vendor agreements, insurance policies and loss history, equipment lists with maintenance records, and inventory and crop-in-ground policies. If you are under a food safety program, expect requests for audit results and traceability records. Preparing these early reduces delays and price retrades. Rejigg provides a built-in data room with folders mapped to common crop-operation diligence requests.

Most deals use a closing inventory count with an agreed valuation method, often invoice cost or average cost, adjusted for obsolescence. Buyers focus on usability for the next season, shelf life, storage and labeling compliance, and any transfer restrictions for restricted-use products. You will move faster with a detailed inventory schedule showing quantities, purchase dates, and invoices. Rejigg helps you keep the schedule updated and share it with the right parties late in the process, when counts are current.

Many buyers want at least one full production cycle because the real handoff is your timing and judgment in the tight windows: irrigation rhythm, pest pressure calls, harvest start and stop, quality standards, and how loads get allocated when outlets are full. The overlap can be structured as consulting hours, defined seasonal milestones, or a role through harvest and final settlements. Put expectations in writing early because “help as needed” usually turns into conflict. Rejigg’s transition planning guide helps you outline a workable plan.

Tax outcomes depend on deal structure, how the price is allocated across equipment, inventory, and goodwill, and whether land is included. Depreciation recapture on equipment can be large, and land sales may trigger capital gains, with planning options that vary by owner and state. Crop operations also create extra tax complexity around prepaid inputs and ending inventory if you close mid-cycle. An agriculture-savvy CPA should model scenarios before you sign an LOI. Rejigg helps by keeping clean schedules that your CPA can use for allocation and tax planning.

Selling the operating business while keeping the land can widen the buyer pool since many operators can run the farm but cannot finance a large land purchase and seasonal working capital at the same time. The lease has to hold up in diligence: term length, renewal clarity, assignment language, and who pays for wells, tile, and other improvements. If the lease is short or vague, buyers discount the operating business because next season is uncertain. Rejigg helps you present both structures cleanly and compare offers with different land and lease assumptions.

In crop deals, price is only one line item. Closing timing, crop and inventory language, working capital targets, transition requirements, and financing certainty can change your real proceeds and your risk in the next season. Build a comparison that shows cash at close, deferred payments, contingencies, who owns crop and weather risk, and what you are committing to post-close. Rejigg provides deal tracking and side-by-side offer comparison so you can see the true economics and risk profile of each offer in one dashboard.

Late-stage problems usually trace back to control and proof: leases that do not transfer, missing water rights or allocation documentation, yield and pack-out history that cannot be tied to blocks, and unclear rules for crop-in-ground, inventory valuation, and insurance proceeds. Most buyers can live with a bad year if they can explain it. They struggle when the next season cannot be planned with confidence. Rejigg reduces these failures by organizing diligence in a secure data room, tracking buyer requests, and keeping sensitive documents behind NDAs.

Most owners start 6–12 months before their target closing window. The right timing depends on your crop and market, but it usually helps to begin before your busiest stretch so you can handle diligence without sacrificing execution in the field. Many sellers start after harvest or after final settlement clarity, when the last season’s story can be documented cleanly. Rejigg’s finding buyers guide helps you plan outreach around your production calendar and confidentiality needs.