We have had very good results with keeping long land leases by focusing on keeping good landlord relationships. This article is going to review our practices that have been very successful in keeping our leased land. I will also review some of the mistakes that we have made in the past that resulted in us losing some land leases. I will cover the important factors in keeping a lease first and then go over the mistakes that we made in losing leases at the end
I want a long lease.
First it is very labor intensive to develop a grazing operation on leased land that has nothing in place. So before you go forward with any land lease you must be sure that you will have the lease for a minimum of seven years, more is better. It takes several years to get the property working like you want it, things like fencing, water, brush removal, fertility, building recovery periods and a handling facility. That leaves you five years of good production to reap the rewards of implementing the grazing operation.
I make sure the landowner wants to keep me.
My thought process is that if I get a lease then it is up to me to make sure that the landowner wants me to remain on his land after the seven year lease has ended. How do you do this? Manage the property like you own it. Be willing to do everything necessary to make the property a show place. This can be done with a group of cattle. We do not own a tractor, yet our properties look like they have been mowed. Our mower is the mob of cattle. If you have weeds and brush, the mob can really put some impact on those troubled areas.
Do not ever overgraze an area. Bare dirt is not a good thing, watch your grazing closely. Our landowners do not like thorn trees in their pastures, we take care of those for them. Landowners are concerned about their ponds, limit access to the pond with a single strand of hot wire. Our landowners like seeing wildlife on the property. If you do a good job allowing a full recovery period between grazings, the wildlife will prosper. We now have resident turkey flocks on every farm from the increased legume content in our pasture sward. Legumes draw wildlife onto farms.
Invite the landlord out and give them a farm tour of what you are doing. This can include doing a paddock move with them, explaining the importance of good grass management on their farm. You want to have them visualize with you what their property will look like in several years with your grazing management. Our landowners help us sort cattle, walk them to the next farm with the cattle drive. We also invite them out to go horseback riding on their farm.
We keep them up to date with monthly emails and always attach several pictures of their farm. The pictures can include a new baby calf, wildlife, pretty pasture, sunset, thorn tree fire, etc! The more interaction that you have with your landlord, the tighter relationship that you build. Always give them several packages of grass-fed meat from their farm if you have some available. Landlords get a sense of pride from eating meat that was raised on their farm.
Remember it is your responsibility to keep an open line of communication with the landlord, not his. We started offering landlords cattle ownership opportunities several years back. Again this builds interest in their farm and your grazing operation, they are now livestock owners, “Cattle Ranchers”. This has been a great experience for our landlords. We have one landlord that has taken enough pictures of his calves to wear out a good camera. He is an absentee landowner that lives in Dallas, Texas. He absolutely loves being a cattle owner and it allows him to dream of what his calves will look like when they grow up.
We put ear tags on all of the landowner’s calves with their name on the tag. They can easily identify them while walking among the cattle mob and show them off to their friends. Now that the landlord is in the cattle business, why would they want to terminate the lease when it ends? Landlords are not typically educated in good grazing management. This is our job to show them the importance of building a good litter bank, animal impact, adding fertility with the mob, increased diversity of plants, good water cycle, stopping erosion, healing problem spots, etc.
Landlords get excited when you start explaining that you are building as sustainable grazing operation on their farms. We have leased two of our farms by simply doing a good job on the farm that was attached to their idle land. One landlord was spending $2000 a year to have his farm brush hogged off each year to make it look pretty. He approached us about making his farm look like the one we had leased, we obliged. The nice thing about getting farms that attach to your present farm is you do not have to buy another charger, just extend the hot wire to manage his land as well.
I’ve learned from my mistakes.
Now I am going to cover some of the mistakes that we have made that ended up with us losing a couple of land leases. Our first lease that we lost was on a large farm that covered 750 acres. It was located two miles from our house. The landlord was an ex-cattleman himself that sold his cows when he retired from his job in town. I want to give you some history on how the land became available. The landlord had been in business with another local grazier on his cowherd. The agreement was that they would split the calf crop if the grazier did all the work. The landlord owned all the cattle. The grazier was to have complete control of the grazing management of the farm.
As the partnership progressed, the landlord started making management decisions with the grazing operation. Everything had to be mowed every year, certain areas could not be grazed; only hay production from those areas. After three years the grazier ended the partnership. The landowner sold the entire cowherd and approached us about leasing his farm. He told me that he was done with ranching and we could manage his farm any way that we wanted.
He further went on to say that he did not want to sign a lease longer than one year at a time because he did not want me to get in over my head. (Red Flag Warning) I should have walked away at that point but wanted the farm so bad that I agreed. Heck he was looking out for me right? No, he wanted his farm fenced and he knew I built good fence. His farm did not have perimeter fence on it good enough to hold cattle. The first thing that I tackled was securing the perimeter fence.
The one thing that I did do right was in the one year lease I stipulated that all electric fence posts and wire was ours at the end of the lease. We had the farm for three years and made dramatic improvements to the forage and fertility of the farm. At the end of the 3rd year he came to me and told me that he had been offered double the amount of the lease payment that we were paying. The whole farm was stockpiled in succulent forage from our planned grazing operation.
He terminated the lease; we had 30 days to get our cattle off. The custom grazed cattle were removed and in two weekends we pulled every post and rolled up every foot of wire. The landlord had already taken off to Arizona to spend the winter. The new leasee called him and asked how in the heck did he expect him to graze his cattle with no fence! The landlord called me up and was hotter than a firecracker. I told him to read his lease, the posts and wire was our property. The landlord had to pay a fencing contractor to come in and fence his entire farm before the cattle could be placed on his farm. The new leasee started mowing hay on every pasture that he could get a tractor over. He has sold the hay off the farm every year since and now the farm is beginning to turn to broomsedge.
There were many warning signs that I ignored at the very start. The very first warning sign was the way he treated the previous grazier. The next warning sign was the one year lease. Another warning sign was that he wanted his whole farm mowed off every year, which is not sustainable at all. The landlord had no idea of the importance of good grazing management. No perimeter fence to speak of, was another warning sign. If you are going to put that much work into building fence, make darn sure you have a 5-7 year lease. It was a very good learning experience to go through and we made mistakes that we will never repeat!
The second lease that we lost was on an eighty acre farm that attached to our farm. It was owned by an absentee landlord in St. Louis that only came out to the farm 3-4 times a year. We approached him about grazing cattle on his land. When I first met the guy, I got a very uneasy feeling talking with him. The guy was just miserable about being alive it seemed. Basically he felt like everybody was out to get him. That was my warning sign that I did not heed. I felt like with enough time I could turn this fellow around with his pessimistic attitude about life.
We signed a five year lease and we began grazing. The place had been severely neglected, cedars had taken over all the pastures, fences were laying on the ground. We cleared the entire farm of cedars and secured the perimeter fence. The landlord’s attitude never changed during the whole five year lease. Never received one positive word on how his land had improved. You just wanted to run out the door after talking with the landlord for five minutes! I simply could not change his attitude. The guy was simply a miserable chap and no amount of land improvement would ever change that. We terminated the lease after five years. No lease is worth dealing with difficult people.
Conclusions:
When you meet a potential landlord, listen to your gut feeling very well. Is he an optimist or a pessimist? Look him in the eye when you shake hands with him. You can tell a lot about a person by a simple handshake. A limp fish handshake does not give me a warm fuzzy feeling. You do not have to break his hand, but give them a nice firm handshake.
Do not be over anxious to lease the land to the point that you ignore early warning signs. The Landlord needs to commit to a minimum of five years for the lease arrangement. Every lease must be in writing and signed by both parties.
The bottom line is that you can build a very sustainable grazing operation with leased land. I was able to resign from my town job in 2009 because we have focused on good grazing management on leased land. Today we have twelve leased farms, and four owned farms. Our operation could not have grown to the level it has if we had simply focused on buying land. You simply cannot buy land for what you can lease it for.
Thank you for the fine article, the clear examples, and your advice. In the area in which I live, most people have one-year crop-sharing deals for hayland. It is still close enough to a frontier mentality that doing any work beyond making hay and applying maintenance fertilizer is not normal–“there’s always another field to rent.” We were fortunate to have one farmer lease our land and reseed the fields, but we (resident landlords and part-time farmers) were lax/ignorant in not spelling out the terms of reseeding and making the length of the lease a specific amount of time. Sometimes things get complicated because we just don’t know better and live in an area in which various possibilities are little known or practiced. Our local agricultural has sponsored one workshop on these matters. Thank you again for your help.