In recent years, landowners and livestock producers have become interested in creative pasture leasing arrangements. From the producer standpoint concerns are long term investments such as: fencing, fertility adjustments, water accessibility/development, and facilities. From a landowner perspective the concerns are: return on land investment, retention of overall farm quality, and soil quality. I see many landowners who desire more income from their farmland and likewise livestock producers who are frustrated with rental adjustments. So what is a fair pasture rental arrangement?

While it is impossible in this article to establish recommendations appropriate for all farms, we will attempt to describe some universally important aspects of a pasture rental arrangement. So what is a pasture worth? A pasture, like a house, crop, field, or anything else being rented, is worth what someone is willing to pay. The price we can charge for land rental is directly related to demand. If we do not have competition for land, then we will be unable to get top dollar. Some parcels do not have a great deal of livestock producers living nearby. If a farmer has to travel great distances to care for livestock, the property is obviously worth less to him. On the other hand, if we have many neighbors who would benefit from the extra ground, the land becomes more valuable. To coin a real estate term, "location, location, location."

Another factor influencing pasture rental rate is topography. Is the pasture flat and machinery accessible? Pastures which are covered with scrub brush, steep, rocky and partially inaccessible to farm machinery are not as desirable. In other words, pastures and land are not all created equal in terms of suitability for livestock production.

To read the entire article, link here.