NDSU Extension Service - Mercer County

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Evaluate Pasture Rental Rates When Renewing Contract

pasture rental rates, renewing contracts, average pasture rental rate

Submitted by Craig Askim, Extension Agent, Agriculture and Natural Resources   

According to the calendar, spring is here. Hopefully the weather will be warming up in the next month or so and grass development will start occurring in pastures, and it will be time to turn cows out. This time of the year is usually when pasture rent is due or renewal contracts need to be updated and reviewed. I receive many calls this time of year asking the question, “What is the average pasture rental rate for Mercer County?” The answer is not is set in stone. Yes, we have a record of the average payment received for pasture rent each year, but hopefully by reading this article you will have a better understanding that a pasture rental agreement should have more language written into it than just dollar amounts.

With the status of agricultural markets, you may be wondering if you are overpaying or receiving the appropriate income for rental grazing resources.

"This can be a difficult question to answer because prices vary from region to region due to market supply and demand," says Miranda Meehan, the North Dakota State University Extension Service livestock environmental stewardship specialist. "In addition, several factors influence rental rates."

Rental rates can vary depending on many factors, here is a listing of some:

* Forage quantity and quality

* Forage species and composition - rangeland, improved pasture, annual cover crop, and residue

* Condition of fencing

* Water quality and availability

* Management practices required by landowner and renter

* Presence of a grazing system on rangeland and improved pastures

* Fertility practices on improved pastures

* Supply and demand

"Before you renew your existing rental contract, you may want to evaluate pasture rental rates," NDSU Extension rangeland management specialist Kevin Sedivec advises.

Many options are available to calculate rental rates. Here are the options that best fit this region:

* Rental rate by acre - based on the value of land

* Rental rate by animal unit month - rent per head of livestock per month

* Pasture quality factors - uses current market value for hay and pasture quality factors and is

   recommended for annual forages such as cover crops and crop residue

"When negotiating rental rates, it is important to outline the responsibilities of the tenant and the landowner," Meehan says. "Unless it is specified in the contract, the tenant is responsible for activities related to livestock management and the landowner is responsible for activities related to land production."

For detailed information on how to calculate rental rates, refer to the NDSU Extension publication "Determining Pasture Rental Rates"

(http://tinyurl.com/PastureRentalRates) and the "NDSU Range and Pasture Calculator" (https://www.ag.ndsu.edu/sheets/range-and-pasture-calculator/), or contact your local county Extension office.

Source: Miranda Meehan, 701-231-7683, miranda.meehan@ndsu.edu

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