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Figuring Pasture Rental Rates: Conditions that Affect Value

By   /  March 12, 2018  /  Comments Off on Figuring Pasture Rental Rates: Conditions that Affect Value

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This is the fourth in a series on figuring pasture rental rates, updated with input from On Pasture readers. If you’ve missed the first three, here they are:

How Much to Pay for Leased Pasture – 2018

Doing the Math on Pasture Rental Rates Part 1

Figuring Pasture Rental Rates Part 2: AUMs and Profit Sharing

All pastures are not created equal. Some have better forage and some have more fertile soils.  Fences add to the value of a pasture as does other infrastructure. So, as you’re doing the math to help you figure out what a good pasture lease rate is, don’t forget to make a list of the pros and cons that may add to or subtract from the pasture’s value.  Here are some examples to consider:

Forage Species and Condition

A perfect pasture may be in the eye of the beholder, or in the education of the livestock grazing it. These educated cows are happily putting on weight in a very weedy pasture because Kathy taught them how to eat weeds. You can learn about teaching your livestock to eat weeds by clicking here.

A perfect pasture may be in the eye of the beholder, or in the education of the livestock grazing it. These educated cows are happily putting on weight in a very weedy pasture because Kathy taught them how to eat weeds. You can learn about teaching your livestock to eat weeds by clicking here.

Pluses

• Legumes in the pasture are better than just grass.
• Tame grasses are often better than native grasses.
• Weeds – if your cattle are educated and they eat weeds, a weedy pasture can be a bonus. Weeds are high in protein, are more digestible than grass, and often hold their nutritional value longer through the grazing season.

Minuses

• Plant diseases reduce forage quality and quantity.
• Some insects can reduce the quality and yield of pasture, cause hay harvest problems or  be a nuisance for your livestock.
• Weeds – if your cattle are uneducated, and they don’t eat weeds, there is less forage in you pasture.  (If weeds are impacting a pasture, you might consider leasing it at a lower rate, then spending the 8 hours over 7 days training your livestock to eat them. You’ll have more forage, at a good rate, and the landowner will appreciate the improvements your livestock make in the pasture over time.)

Soil Conditions

Pluses

• Fertile soils grow more, better forage and reduce outlays for fertilizer. (Here’s how to find out what kind of soil is under a pasture.)

Minuses

• Check the pH on the pasture’s soil. If the soils are acidic, plant growth will suffer and you might even have to spread lime to solve the problem.

Fences, Water, Hills and Rocks

Where's the water?

Where’s the water?

Pluses

• Good quality fences with conveniently located gates and roads make pastures more valuable.
• Water, especially if it’s present in a way that makes your rotations through the pasture easier are also a bonus.

Minuses

• No fences, or fences in poor condition, will add to the labor and money you’ll need to invest to make the pasture useful to you.
• No water, intermittent water, or too much water in the form of flooding all lower the value of a pasture.
• Are their hills, rocks, or other natural parts of the pasture that will make management of your livestock more difficult? Figure that into what the pasture lease rate should be.

Location, Location, Location

Gene Schriefer is an Agriculture Educator for University of Wisconsin Extension in Iowa County. He’s shared a lot of good advice in On Pasture comments over the years. Thanks, Gene!

On Pasture reader Gene Schriefer reminded us that “there is a transportation cost to calculate in moving cattle to and from a leased pasture, and then who manages the herd. If the cattle owner is doing this function it’s primarily labor and mileage to check/move livestock. The larger the number of cattle moves the more these costs are spread over more units or the further afield from home you can look. A simple spreadsheet can look at your cost per head for transportation which needs to be factored in in evaluating the lease.”

There might be ways to reduce transportation costs. Gene says, “Maybe hiring the land owner to watch cattle is cheaper than doing this yourself.” That has actually worked for me. Having homeowners look after my fire-fighting goat herd on a daily basis, and calling me to move them when their forage matched a picture I gave them, was the only way I made it possible to help a neighborhood build firebreaks in an area 2 hours from home.

But keep in mind, as Gene suggests, that “Maybe, paying a higher rate to the property close to home that you can walk livestock to is a better option. In many instances the most valuable is land you livestock walk to avoid transportation costs.”

Last But Not Least

Consider how neighbors and their livestock and dogs might impact how you manage your livestock. The same goes for hunters, recreational users, and railroad. And as Meg Grzeskiewicz noted in her pasture leasing series the further the pasture is from you, the longer your travel, the less well that pasture may work for you.

So, do the math, adjust it with these things in mind, and you’ll have a great idea of where to start with a pasture lease rate.

 

Thanks to the National Grazing Lands Coalition for making this article possible.

The 7th National Grazing Lands Conference is coming up in December and it’s one of On Pasture’s favorites. One of the things that makes it so great is that folks just like you are the speakers, sharing their great experiences. Learn more about how to be a speaker here. And learn more about the event here.

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About the author

Publisher, Editor and Author

Kathy worked with the Bureau of Land Management for 12 years before founding Livestock for Landscapes in 2004. Her twelve years at the agency allowed her to pursue her goal of helping communities find ways to live profitably AND sustainably in their environment. She has been researching and working with livestock as a land management tool for over a decade. When she's not helping farmers, ranchers and land managers on-site, she writes articles, and books, and edits videos to help others turn their livestock into landscape managers.

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