High grain prices of years past have kept pasture land in short supply and raised rent prices for some beef producers. However, it may be time to negotiate, says a Michigan State University Extension specialist – commodity trends show easing prices into the New Year.
Pasture values generally tend to follow cattle and corn prices over time, and even though pressure may still be on grazing lands in the short term as livestock producers look to expand or find new grazing opportunities, it appears cattle and corn prices are headed back to a "new normal."
Following those prices and local land rent for cropping systems will help determine pasture prices in your region, says Kevin Gould of MSU Extension.
The main focus when leasing pasture is for both parties to receive a fair value for the land resource and grazing opportunity. Gould recommends six steps to determining the market value of pasture land:
1. Determine pasture quality and project grazing value with flexibility build into the lease
2. Select a pricing and payment system that both parties agree on
3. Identify who is responsible for checking livestock inventory on a regular basis
4. Identify who is responsible for “problems” with livestock, fences, water systems, etc.
5. Put the entire lease agreement in writing under a contract format with signatures
6. Work toward multiple-year leases that benefit both parties
In addition, Gould says producers may consider benchmarked prices from the Flint Hills area or Kansas State University's 2012 rental survey as a starting point.
Gould offers another link for producers wanting more information: the publication "Pasture Rental Arrangements for Your Farm," offered by the North Central Regional Extension.