Leasing land can benefit almost any farmer in any situation. It should be your first consideration in looking for land if you are young, new to agriculture, planning to expand an enterprise you already run, have limited financial resources, or for any reason are reluctant to buy land.
As a 22-year-old rancher with student loans to pay, I am starting from the ground up with little capital. Leasing pasture makes so much more sense for someone in my situation than buying a farm. You don’t need to come up with a down payment, and the lease payments can be negotiated with your landowner. You can work out an amount and payment schedule that works for you, rather than being required to meet a bank’s strict terms. True, you will most likely be making regular payments like you would on a mortgage. However, there is no interest or property taxes on a lease. You can obtain land and get started in grazing without going into six figures of debt. It leaves your money free for purchases that will bring a faster return on your investment, such as buying animals. Maximum income with little associated debt is the most important goal for a fledgling farm business.
Though short contracts (less than 5 years) are not recommended, leases are far less permanent than buying property. Buying and selling land is a lengthy process that involves much paperwork, stress and red tape. The opportunity to renew or discontinue a lease every few years gives your business flexibility to grow and change. An informal one-page contract is usually all you need. If you’re not sure you want to commit to farming or living in your current area forever, lease before you buy. As I will discuss later, you choose your lease period to align with your goals and your landowner’s.
Before you start looking for land to lease, make a mental or written list of requirements. What is the maximum distance from your house or farm that you are willing to travel? Closer is always better, especially if a fence goes down or a calf needs to be pulled. How many acres do you want to start with, and how many will you want in a few years as your operation grows? What is your timeline for growth? How much fencing, brush clearing and water system construction are you willing to undertake before placing livestock on the land?
You have many sources of information available through which to find land. Local farm newspapers and bulletin boards around town often have “for lease” ads. You can place an ad of your own, seeking pasture to rent. Don’t forget to search the internet. Ask around when you’re at the feed store, the sale barn, and at producers’ association meetings. Send e-mails and make phone calls every chance you get. You never know who might know someone, so ask everyone! My mother recently applied for a part-time job at a local racetrack. She mentioned that I’m in the beef business, and the track owner now wants to meet with me about putting cattle on his 100 acres.
Keep an eye out for potential leases as you’re driving around. If small brush is beginning to grow up in a field or the fence is in bad shape, it has probably sat idle for a few years. There are many elderly farmers, people with demanding jobs and absentee landowners who aren’t able to work their land, but don’t want to sell it. Plenty of people are looking for a leasee. When word gets around that you’re in the market, it’s very possible that someone will come to you!
Hunting land is a good bet. Often the owner only uses it for a couple weeks and would appreciate someone taking care of it the rest of the year. If you see a piece of land you’re interested in, ask the neighbors who owns it. You can find out by getting a plat map from the county courthouse as well.
It’s important to shop around and not sign on the first pasture you find. You will probably be tempted to, especially if you’re planning to have animals grazing by a certain date, or you’ve been searching for a long time. Always talk to at least two different landowners and tour their farms before deciding. Five or more years is a long time to regret making a snap decision or choosing the wrong property.
Now that you’ve found a piece of land you’re interested in, it’s time to contact the owner. My next article will explain how to make the “sales pitch” for your grazing services and connect with your landowner.