A report on the latest USDA survey on private grazing rates published in the March issue of BEEF magazine -- www.beef-mag.com -- indicates pastureland lease rates are still climbing. South Dakota State University Extension has produced a free downloadable fact sheet detailing considerations in developing pasture lease agreements.
Michael Fritz, Mercator Research LLC, Monona, WI, and editor and publisher of Farmland Investor Letter, says the firmest pasture markets are in South Dakota, California and Nebraska, where rates are up an average 10.3%, 7.1% and 6.7%, respectively, over last year. See the full report at: beef-mag.com/cowcalfweekly/pastureland-survey-lease-rates/.
SDSU Extension economist Burton Pflueger has penned "Pasture Lease Agreements" (ExEx5071), a seven-page paper that provides background and insight into developing such arrangements. The paper doesn't address questions regarding IRS treatment of such leases, nor the legalities of such documents, but it does provide an overview of the process.
Included are sections on the pasture rental market, variations in rates, different methods of quoting rent, computation of rent, alternative land use value, alternative feed cost for livestock, share of gain and variable rents. It also includes other sources for information, tips for determining rental rates, and the importance of written documents in forging a rental arrangement.
Go to agbiopubs.sdstate.edu/articles/ExEx5071.pdf to download the document.
-- Joe Roybal