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River Valley Extension District shares pasture lease survey results

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By Robin Slattery

River Valley District Extension Agent

This year pasture and crop surveys were sent out to two landlords/tenants in each township of the River Valley Extension District (Cloud, Clay, Republic, and Washington counties) to capture the "going rates" and trends in leasing arrangements. Of the 166 surveys that were sent out, 65 were returned and complied to form summary data. These results were presented at Lease Meetings in January, but I wanted to share some of the pasture survey outcomes for those who were not able to make the meetings.

Our offices are not endorsing these numbers as the correct rates that should be negotiated. I am merely reporting the survey numbers and my opinions on the findings. For pasture rent paid by the acre, the average across the district was $23.88, with numbers ranging anywhere from $12 to $50 per acre. While this seems like a really wide range, keep in mind that arrangements can vary significantly by the type of soil and grass in the pasture, type of cattle pastured, availability of water, who maintains the fence, who manages the brush and weeds, etc. This is why it is hard to establish any one "going rate." Each lease needs to be individually negotiated between the landlord and tenant, but knowing the average can be helpful to see if you are in the ball park. Looking at individual counties, average pasture rent by the acre in Washington County was $24.60; Clay County, $21.37; Republic County, $23.44; and Cloud County, $26.54. When pricing pasture by the cow-calf pair, average rent was $147.92 per pair and ranged anywhere from $100 up to $250. Most leases ran from the first of May to the beginning of October or November, so the average lease was slightly over 5 1/2 months.

One of the opinion type questions on the survey I asked was, "What do you expect will be the impact of 2012 weather conditions to pasture lease arrangements?" Although I didn't ask respondents to specify if they were a landowner or tenant, I thought the results were very interesting. Just fewer than 5 percent said they expected rates to increase, while over 55 percent said they should decrease, and 40 percent said they should stay the same. In a typical year pasture rates tend to increase 1 to 3 percent, driven by inflation and more recently strong cattle, forage, and corn prices. These results, however, indicate recognition that stocking rates need to be reduced following a drought year and possibly entering into a second drought year.

Across the district last year, the average stocking rate was 5.74 acres per cow-calf pair (standardized to a 1,300-pound cow). This ranged from 3.08 acres up to 8.62 acres. For stocker cattle, 3.5 acres was the average and ranged from 2.5 to 4.5 acres per animal. While this is a whole discussion in itself, for the long-range health of our rangelands these numbers are going to have to increase. We are starting this year off at a deficit and rainfall predictions for this year look slim. It is recommended to start off the grazing season stocking at least 10 to 15 percent less pounds (animals) than typical years and also having a drought management plan in place to pull cattle out of the pasture throughout the grazing season if timely rains and grass production have not occurred. Overgrazing of a pasture encourages weed growth, stunts grass production for the next season, and over time will change the grass composition of the pasture to less desirable species. In a drought year, overgrazing is even more damaging.

Water is another important factor to think about in a pasture lease. The survey showed that 97 percent of pastures rely on a pond or a steam as a water source. Thirty-six percent had a well, 9.8 percent had a spring, and 13 percent had to transport water. As you can see, most pastures had multiple options for water, but this year when the ponds are starting out very low and streams may be non-existent, a back-up plan should be in place. In 64 percent of the leases the tenant was in charge of maintaining the water.

Labor for fencing was the responsibility of the tenant in over 80 percent of the leases, but in over 70 percent of the leases the landowner provided the materials. Weed control was the responsibility of the tenant in almost half of the leases and another 28 percent reported it was the landowner's responsibility, and in 23 percent it was a shared responsibility. Other general comments from the survey were" "A lot of guys put way too many cattle on. They need to cut back," "Hard to find pasture to rent," and "Cost is rising too fast." Pasture leasing is certainly following the other recent trends in agriculture: higher prices, more uncertainty, and the need for better management to be profitable.

More survey results and information can be found from our Lease Meeting PowerPoint slides on our website at www.rivervalley.ksu.edu under "What's Hot" and soon handouts will be available at our local offices. The survey and lease meetings will be conducted annually throughout the district to provide accurate local information to producers.

Date: 2/25/2013



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