Pasture Rental Arrangements for Your Farm Larry N. Langemeier

North Central Regional Extension
Publication No. 149
Pasture Rental
Arrangements
for Your Farm
Larry N. Langemeier
Pasture Rental Arrangements
for Your Farm
Larry N. Langemeier *
Contents
Part I: Animal Units and Stocking Rates ........................................................................................... 3
Part II: Establishing Rates: Per Acre or Per Head ............................................................................ 3
Landlord’s Cost Basis ............................................................................................................................. 3
Livestock Owner’s Returns Basis ........................................................................................................... 4
Actual Lease Rate. .................................................................................................................................. 5
Part III: Establishing Rates ................................................................................................................. 5
Share of Gain .......................................................................................................................................... 5
Variable Rates ......................................................................................................................................... 6
Alternative Feed ..................................................................................................................................... 7
Part IV: Leasing Tame-grass Pasture ................................................................................................. 7
Rate Based on Cash-rented Cropland ..................................................................................................... 7
Other Methods for Establishing Tame-grass Lease Rates ...................................................................... 8
Part V: Establishing Rates: Other Factors ......................................................................................... 8
Market Rates ........................................................................................................................................... 8
Valuing Location, Water, and Landlord’s Services ................................................................................. 8
Part VI: Drafting the Lease ................................................................................................................. 9
Using the Lease ...................................................................................................................................... 9
Worksheets .......................................................................................................................................... 10
Pasture Lease ...................................................................................................................................... 18
* Professor, Department of Agricultural Economics, Kansas State University. The author would like to thank Roger A. McEowen,
agricultural economist, agricultural law, Kansas State University, and Richard T. Clark, agricultural economist, University of
Nebraska, for making review comments on an earlier version of this manuscript. Revised February 1997.
The original NCR Extension Publication 149 was written in 1981 by Don D. Pretzer, former assistant director, Extension Agriculture and Natural Resources, Kansas State University, with assistance from a former ad hoc committee comprised of members
Myron Bennett, University of Missouri, and Ken H. Thomas, University of Minnesota. Revised in 1989 by Larry N. Langemeier,
professor and Extension agricultural economist, farm management studies, Kansas State University.
1
The purpose of this publication is to help tenants and landlords make sound decisions and
develop fair pasture rental arrangements. Part I provides background information on animal units and
stocking rates. Parts II and III discuss establishing
lease rates on a per-head or per-acre basis, and Part
IV addresses leasing tame-grass pasture. Part V
discusses other factors influencing lease rates. Part
VI discusses the importance of developing a written agreement. A sample lease form is included at
the end of this publication.
Although beef cattle examples are used in this
publication, the principles and worksheets outlined
apply equally to grazing dairy cattle, sheep, goats,
horses, and other roughage-consuming livestock.
The values used in the various worksheets represent illustrations of the principles. Tailoring the
discussion of the principles developed in this bulletin to a specific situation is advised.
ing. Thus, it is in the interest of both parties to
develop a lease agreement that achieves maximum
economic returns to resources while maintaining
the grass stand and quality.
Part II
Establishing Rates:
Per Acre or Per Head
The landlord’s cost and livestock owner’s return
are two commonly used methods to determine a fair
pasture rent on either a per-head or per-acre basis.
Landlord’s Cost Basis
For this method, the major task is to establish
fair values for the resources and annual-use charges
to determine the landlord’s cost. The valuation
process is outlined in the following discussion.
Land: Land is valued at its current fair-market
value for agricultural purposes. The influence of
location near cities and other nonagricultural influences on value is ignored.
Interest on land: A percentage of the land value
indicates the landlord’s return to the current value
and also reflects the pasture productivity. A practical
“bargaining” rate of interest tends to be approximately
5 to 7 percent for three primary reasons:
1. The current value of real estate is used rather
than the purchase price for the basis of returns.
2. Upon sale of the pasture, the net dollars available
to the seller would be lower than the fair-market
value due to income taxes and sale expenses.
3. Historic returns to land have been in the 4 to 6
percent range as an annual return above all
charges, except land.
Returns to owning pasture may include capital
gains as well as the annual income from renting
the pasture.
Real estate taxes: The actual taxes due annually should be used.
Land development: The average dollars spent
annually for land improvements, including conservation practices, should be used.
Building or facility investment: A fair-market value
should be placed on the fences, buildings, ponds,
wells, and handling facilities. Ownership costs on
this investment include depreciation, interest, repairs,
taxes, and insurance (the “DIRTI five”).
1. Depreciation: Depreciation life for buildings
and facilities usually ranges from 15 to 30 years.
Fences are seven-year property. Ponds may not
be depreciable, and therefore they add value to
the basis of land.
2. Interest: Current interest cost on the average investment value (usually one-half the total value)
should be used. Utilization of one-half the total
investment value assumes a zero salvage value.
Part I
Animal Units and Stocking Rates
Other than the lease rate, perhaps the most important aspect of any pasture lease is the stocking
rate. Clearly, specifying the stocking rate in the
lease agreement helps avoid disagreements between both parties and maintains the quality of the
grass stand. Stocking rates can be stated in number of head for a given type and weight of livestock
or as “animal units.” Unquestionably, the stocking rate agreed upon by both parties will have a
significant effect on the lease.
Animal unit (au): An animal unit (au), in general, is defined as a 1,000-pound beef cow with a
calf less than four months postpartum. This common unit of measurement estimates both the
amount of forage demanded by livestock and the
amount of forage available in the pasture.
An animal-unit month (aum) is the amount of
forage required by an animal unit for one month.
An aum generally is based on a 1,000-pound beef
cow consuming 25 pounds of forage for 30 days
or 750 pounds (air dry or 12 percent moisture). In
addition, an aum has a built-in degree of use at 50
percent and a loss of 25 percent of the forage due
to insects, trampling, and other losses. For example, a pasture site that produces 2,500 pounds
per acre of forage would equal 0.83 aum/acre
[(2,500 x .25)/750].
Stocking rate: The stocking rate of the pasture
being considered is extremely important. Setting
pasture rent on a per-acre basis gives an incentive
to the livestock owner to stock heavily. The landlord, in turn, may desire light stocking rates so as
to preserve the pasture. Likewise, pasture leased
under a share of gain basis could lead to overgraz3
3. Repairs, taxes, and insurance: Facility repairs
usually vary from 1 to 3 percent of the investment value, with the charge for both taxes and
insurance about 0.25 to 1 percent.
Other costs: The average spent annually for fertilizer, especially if some minimum level is
required for maintaining the grass, as well as any
other costs should be used.
Management: Management is an important contribution to a successful leasing agreement. The
function of management may or may not be shared.
If the landlord contributes management, then credit
needs to be given. If the tenant bears all management responsibility, a value should be placed on
this management function.
The value of management is subject to negotiation between the landlord and tenant. Two
alternatives are possible.
1. A possible guide is 1 to 2.5 percent of the average
capital managed. The average capital managed is
equal to the market value of items such as land,
buildings and facilities, and livestock.
2. Professional farm managers commonly charge
5 to 10 percent of adjusted gross receipts. (In
the case of pasture, gross receipts may be equal
to the total or per-acre livestock income.)
Worksheet 1 illustrates ownership costs for 160
acres of pasture. As outlined by the example, the
per-acre ownership cost of $21.54 establishes an
asking lease price for one acre of pasture land. Rent
per head is determined by the carrying capacity of
the pasture for the type and size of animal being
considered times $21.54. For example, a 550pound beef animal may require 4 acres, which
would result in $86.16 per head per season (4 acres
x $21.54 per acre).
Livestock Owner’s Returns Basis
A budget format that can be used to determine
the livestock owner’s returns is outlined in
Worksheet 2. Farm management budgets can be
obtained from local and state Extension Service
offices if livestock costs and returns are unknown.
As outlined in the example for a 550-pound beef
Worksheet 1. Landlord Pasture Ownership Costs — Total Per Acre and Per Head
A. Land investment:
160
No. of acres
_________
315
Price per acre
$ _________
Land value (No. of acres x Price per acre)
Interest
Land taxes
Land maintenance
$
$
$
$
50,400
________
50,400
________
50,400
________
________
x
x
x
0.5
______
%
0.5
______
%
______ %
2,520
$ ________
252
$ ________
$ ________
B. Other investments:
Fences
___________
Corrals
___________
Other
___________
Total
Depreciation
Interest *
Repairs
Taxes
Insurance
$
$
$
$
$
6,000
________
6,000
________
6,000
________
________
________
÷
x
x
x
x
25 yrs
______
5
______
%
2
______
%
______ %
______ %
$
$
$
$
$
5,280
$ _________
480
$ _________
240
$ _________
6,000
$ _________
C. Other costs:
Fertilizer
Other
240
________
300
________
120
________
________
15
________
$ ________
________
D. Labor and management:
Labor
Management
E. TOTAL PASTURE OWNERSHIP COSTS
$ ________
________
3,447
$ ________
160
F. Number of pasture acres:
________
G. Pasture ownership costs per acre [total ownership costs (line E) ÷ no. of acres (line F)]:
21.54
$ ________
4
H. Stocking rate: ________
acres per head
I. Ownership costs per acre [costs per acre (line G) x no. of acres per head (line H)]:
86.16
$ ________
* A percentage rate of 5 percent on $6,000 is equal to 10 percent of the average investment of $3,000.
4
Part III
animal, the livestock owner can afford to pay
$78.74 per head or a per-acre rent of $19.69 if
4 acres are needed per head.
Establishing Rates:
Share of Gain or Variable Rates
Actual Lease Rate
Share of Gain
A final lease rate value acceptable to both the
tenant and landlord can be derived from more than
one of the methods outlined in this publication.
The landlord and tenant should identify areas of
agreement and differences based on the values each
party has independently developed.
Negotiation provides a means of arriving at a rate
that is acceptable to both, and it is an opportunity
for both parties to understand the other’s point of
view. However, negotiations should be undertaken
only after the contributions of each party are known.
Given the examples outlined, the landlord
would like to receive $21.54 per acre based on the
cost basis method. In turn, the tenant would like
to only pay $19.69 per acre utilizing the owner’s
return basis. In general, the equitable pasture lease
rate is usually somewhere between the landlord’s
and livestock owner’s figures. Thus, the actual
lease rate will be a negotiated value.
The landlord and livestock owner are sometimes
interested in developing a share arrangement where
risk is equitably divided between them. Under this
type of arrangement, each party’s contributions are
used as the basis for dividing income.
As outlined in Worksheet 1, contributions of the
landlord include interest, maintenance costs, and
taxes on the land, as well as taxes, depreciation,
interest, repairs, and insurance on the investment
in fences, buildings, ponds, and handling facilities. Other contributions may include fertilizer and
other inputs. Contributions of the livestock owner
include interest on the livestock investment, operating expenses, and management as outlined in
Worksheet 2.
The income to be divided is the value of the livestock gain the pasture produced. The value of the
gain does require a determination of the price and
weight of animals being pastured at both the start
and end of the pasture season. Worksheet 3 illustrates
one approach to computing each party’s share of the
Worksheet 2. Livestock Owner Net Returns — Per Head and Per Acre *
A. Animal investment:
Animal purchase cost
550
___________
lbs
90.00
$ ___________
per cwt
x
B. Livestock costs (as percentage of animal investment):
10 % x
495
Interest
$ ______
x ______
4
495
Taxes, vet, ins., misc.
$ ______
x ______
%
1
495
Marketing, hauling
$ ______
x ______
%
2
495
Death loss
$ ______
x ______
%
Total
C. Breeding livestock costs:
Depreciation
Bull charge
Total
D. Labor and management:
Labor
Management
Total
$ ______
÷
50
______
% of yr
______ yrs
59.40
$ ________
$ ________
0.7 hrs
_____
x
9.00 per hr
______
6.30
$ ________
6.45
________
12.75
$ ________
567.15
$ ________
815
___________
lbs
79.25
$ ___________
per cwt
x
G. Livestock owner net returns to pasture per head (line F - line E):
H. Stocking rate:
24.75
$ ________
19.80
________
4.95
________
9.90
________
$ ________
________
E. TOTAL ANIMAL COSTS PER HEAD:
F. Income:
Animal sold value
495.00
$ ________
645.89
$ ________
78.74
$ ________
4
___________
acres per head
I. Livestock owner net returns per acre (line G ÷ line H):
19.69
$ ________
* For more information, see Farm Management Livestock Cost-Return Budgets available at local and state Extension Service offices.
5
gain or loss. The net return on animal needs to be
compared with the total costs for each party. The actual lease rate will need to be negotiated. The lease
rate determined by the methods shown in worksheets
1 and 2 may be more satisfactory to each party.
ity of additional profit (or loss), to the landlord. The
risk due to weather could be effectively shifted by
charging a fixed amount per pound of gain.
To illustrate this type of lease arrangement, the
pasture rent for a yearling steer could be set at
$10.60 per month. The total lease charge would
be $63.60 ($10.60/month x 6 months) for a 6month grazing season. During the days on pasture,
a 265-pound gain per animal would be a reason-
Variables Rates
A lease arrangement also can be developed that
would shift some of the risk, and thus the probabil-
Worksheet 3. Landlord and Livestock Owner Share of Gain Per Animal
Landlord
A. Landlord — investment per head:
Land price
Stocking rate
Investment per head 1
Fence investment per acre
Corral investment per acre
Other investment per acre
Total investment per acre
Facility investment per head 2
315 per acre
$ ________
4 acres per head
________
1,260
$ ________
33.00
________
3.00
________
1.50
________
37.50
$ ________
150.00
$ ________
Landlord — costs per head (as percentage of investment per head):
1,260
5
Land interest
$ ________
✕ ______
1,260
0.5
Land taxes
$ ________
✕ ______
150
11.25
Facility expenses
$ ________
✕ ______
Other costs
$ ________ ✕ ______
B. Livestock owner — investment per head:
Animal purchase weight per head
Animal purchase cost per cwt
Investment per head 3
Livestock
owner
%
%
%
%
63.00
$ ________
6.30
________
16.88
________
________
550 lbs
________
90.00
$ ________
495.00
$ ________
Livestock owner — costs per head (as percentage of investment per head):
495.00
5
Interest
$ ________
✕ ______
%
495.00
4
Taxes, vet, misc.
$ ________
✕ ______
%
495.00
1
Marketing, hauling
$ ________
✕ ______
%
495.00
1
Death loss
$ ________
✕ ______
%
Labor ( 0.7 hours per head ✕ $ 9.00 per hour)
Management charge
24.75
$ ________
19.80
________
4.95
________
4.95
________
6.30
$ ________
6.45
________
Breeding livestock costs
Depreciation
Breeding charge
$ ________
________
86.18
67.20
$ ________
$ ________
153.38
$ ________
56.2 %
______
43.8 %
______
C. TOTAL COSTS PER HEAD
% landlord
% livestock owner
D. Value of weight gain:
Animal sold value ( 815 lbs ✕ $
Less animal purchase cost
Net returns on animals
56.2 % to landlord
_____
43.8 % to livestock owner
_____
79.25
per cwt)
645.89
$ ________
495.00
$ ________
150.89
$ ________
84.80
$ ________
66.09
$ ________
D = depreciation = 5.00 %; I = interest = 5.00 %; R = repairs =
T = taxes =
0 %; I = insurance = 0.25 %
TOTAL =
11.25 %
Land price per acre ✕ acres per head
2
Investment per acre ✕ acres per head
3
Pounds per head ✕ hundredweight
1
6
1.00 %;
Pasture rent = Average weight in hundredweight during
pasture season
x Average price per ton of good grass
hay during pasture season
x Pasture quality factor
x Pasture season in months
able expectation. The cost of gain is $.24 per pound
($63.60 ÷ 265 lbs) under these circumstances.
Instead of charging $10.60 per head per month,
the landlord could set a lease rate of $.24 per pound
of gain. If the total gain turned out to be excellent,
say 315 pounds, the landlord would receive $75.60
for the season instead of $63.60. Yet, if the amount
of grass was short and the gain per animal was
only 175 pounds, the landlord would receive only
$42. Pasture owners may be unwilling to assume
this kind of risk unless, on the average, a higher
rent is charged.
The risk due to market price changes can be
shifted to the landlord by utilizing a flexible rent
formula. The following discussion outlines one
such method. For example, the going (base) rental
rate (per head per season) could be tied to the longterm average price for good-choice steer calves
during the months of October and November at a
terminal market. Each year, the rental rate would
increase or decrease as the price of calves varied
in relation to the long-run average price. The formula for such a method would be as follows:
Adjusted
rent
Adjusted
rent
=
Base
rate
x
Current Oct.-Nov. price
of steer calves
Long-term average
Oct.-Nov. price
of steer calves
=
$80
=
$64 x ($100 ÷ $80)
Pasture Quality Factors:
.22 = Lush, green, high protein pasture
.20 = Excellent tallgrass pasture
.15 = Fair to good native pasture
.12 = Poor shortgrass or considerable weed growth
Example 1:
Assume 1,200-pound cow, $65 hay, excellent
tallgrass pasture, 6-month season.
Pasture rent = $93.60 = 1.2 x $65 x .20 x 6
Example 2:
Assume 800-pound steer, $65 hay, excellent
tallgrass pasture, 6-month season.
Pasture rent = $62.40 = .80 x $65 x .20 x 6
Part IV
Leasing Tame Grass Pasture
Tame grass, as defined in this publication, refers
to grass planted on land that has been previously
tilled. The land quality can range from class 1 highly
productive soil to very low, not suited for crops.
Generally, management of tame grass includes the
application of annual fertilizer and possibly mowing or spraying for weed control. Some tame grasses
may be hayed rather than grazed.
Three major problems arise between the landlord and livestock owner when leasing tame grasses:
1. Fertilizer: The livestock owner usually wants
to apply relatively heavy rates of fertilizer when
leasing tame grass so as to obtain the maximum
production per acre. The landlord, in turn, will
want to apply only enough fertilizer to maintain the stand of grass.
2. Stocking rates: The stocking rate of the pasture
being considered is extremely important. Setting
pasture rent on a per-acre basis gives an incentive to the livestock owner to stock heavily. The
landlord, in turn, may desire light stocking rates
so as to preserve the pasture. Likewise, pasture
leased under a share-of-gain basis could lead to
overgrazing. Thus, it is in the interest of both
parties to develop a lease agreement that achieves
maximum economic returns to resources while
maintaining the grass stand and quality.
3. Grazing season: What months can be grazed?
Will the grass be harmed by year-round use?
This formula also can be adjusted for weather
by allowing for variations in the amount of grass
produced or in productivity. The formula would include a factor such as the current season’s estimated
county yield of wild hay, or other comparable forage crop, divided by the long-term average yield of
the same crop. The formula for considering both
price and weather risk would be as follows:
Adjusted
rent
=
Example:
Adjusted =
rent
Base
rate
Current Oct.-Nov. price
of steer calves
x
Long-term average
Oct.-Nov. price
of steer calves
Current year’s
avg. hay yield
x
Long-term avg. hay yield
$60 = $64
x
$100
$80
x
0.9 ton
1.2 ton
Alternative Feed
The lease rental rate for pasture could be based
on the alternative feed concept, such as utilizing
hay instead of pasture. The formula for the alternative feed method would be as follows:
Rate Based on Cash-rented Cropland
By definition, tame grasses are planted on tilled
soil, and therefore the land can be used for some
crop other than forages. One approach would be
to treat the land like cash-rented cropland. For a
7
Part V
complete discussion of cash renting, see Publication NCR-75, Fixed and Flexible Cash Rental
Arrangements for Your Farm. That publication indicates how to establish fair cash rental rates for
land. After the cash rent is established for tame
grass pasture, the problem areas can be handled
and entered into the agreement as follows:
1. Fertilizer: Leave the amount and payment to the
livestock owner. If some minimum level is required for maintaining the grass, this amount
should be specified in the lease.
2. Stocking rate and grazing season: Leave the
stocking rate to the livestock owner unless there
are specific periods when grazing would be
harmful to the grass. Specify these time periods in the lease. If the grass species is such that
stocking rates should be maintained, specify this
in the lease.
Establishing Rates: Other Factors
Market Rates
While each of the previously discussed methods
may be used to establish pasture rental rates, the
market rate cannot be ignored. The market rate is
the going price resulting from negotiations between
landlords and livestock owners. Previous year’s
rates are published by most state crop and livestock
reporting services. Estimated livestock inventories,
price, and weather conditions for the current year
are needed to estimate and bargain the current year’s
rates from previous year’s rental rates.
Valuing Location, Water,
and Landlord Services
The value of water, location, and landlord services are subjective. However, these items have
some value to the livestock owner.
Location: The pasture location is important if
the livestock owner is caring for the livestock. The
total cost can be computed by estimating the number of trips per season then multiplying by the
number of miles, then multiplying again by the
cost per mile. The number of trips should consider
checking the cattle for count, health, minerals, and
water supply as well as hauling or driving the cattle
to and from the pasture.
Water: Good quality water in proper locations
improves gain. If the water supplies go dry in midseason, provisions must be made for hauling water
or removing the animals. The lease agreement
should establish the party responsible for these costs.
Landlord services: Landlord services vary from
mere rent collection to taking complete care of the
livestock during the pasture season. A common
charge for these types of services is a percentage of
the gross rent. In most cases, the value of such services is included in the rental rate. As a result, market
rates should be carefully considered.
Other factors: Pasture rental rates per acre
should reflect productivity. Past stocking rates,
weed growth, and moisture affect productivity
(stocking rates or carrying capacity). Poor pastures
rent for less per acre than highly productive pastures. Conflicts may arise because the livestock
owner wants to stock with the maximum number
of head per acre while the landlord desires a low
stocking rate as the rent is a fixed rate per acre.
Continuous, heavy stocking rates lower the quality of pasture by reducing the stand of grass and
allowing weed growth.
Pasture rented on a per-head basis establishes a
rate that may not adequately recognize differences
Other Methods for Establishing
Tame Grass Lease Rates
Forage substitution: Short-period grazing may
be priced on the basis of drylot feeding costs. For
example, a livestock owner wants beef feeders to
gain 1.8 pounds per day. Tame grass pasture can
be leased to provide feed for a 45-day period. The
drylot feed cost for the feeders would be $0.35
per pound or $0.63 per day (1.5 pounds ✕ $0.35
per pound). The livestock owner could then afford to pay $28.35 per head for the tame pasture
for 45 days ($0.63 per day ✕ 45 days). Lease rates
for breeding livestock and other livestock species
can be similarly computed.
Value of gain: For example, a livestock owner
can lease tame grass for beef feeders for 3 months.
The beef feeders weigh 550 pounds and can be
sold for $90 per hundredweight, or $495 per head.
The beef feeders should gain 200 pounds for the
90 days on grass. Consequently, it is critical to
determine how much the livestock owner can afford to pay for the pasture.
If, for example, the livestock owner estimates
the 750-pound feeders can be sold at the end of
the grazing period for $82.50 per hundredweight,
or $618.75 per head. The increased value for each
feeder is $123.75. From the increased feeder value,
the livestock owner must deduct interest on investment, death loss, and expenses such as marketing,
labor, repairs, and management. If these costs are
estimated to be $59.25, the livestock owner could
pay $64.50 for the pasture for the 3-month period
($123.75 - $59.25 = $64.50).
8
in stocking rates. Compared to per-acre rates, the
livestock owner desires low stocking rates (higher
gain per head) and the landlord desires higher
stocking rates to increase income. Size of animals
is not always enumerated in the lease and may lead
to disagreements. The stocking rate and cattle
weight may be the most important points for both
parties to agree upon and enumerate in the lease.
Whole-tract rentals are often part of a farm containing cropland. The rental rate for whole tracts
is established by (1) the rate per head times the
number of head allowed per tract or (2) the peracre rate times the number of acres in pasture.
Using the Lease
Names: Include names of spouses as the land, as
well as the livestock, may be titled in joint tenancy.
Property description: Include both legal and
common descriptions.
General terms: The years may be changed to
months or days for short-term leases. The other
terms are fairly standard but may be deleted by
crossing out if not applicable. (Be sure both parties initial any lease changes.)
Stocking rate: This section is perhaps the most
important section of the lease form if disagreements are to be avoided between the parties and
the grass stand and quality is to be maintained.
Operation and maintenance: The lease form
specifies which party performs the most common
operation and maintenance practices. Additional
provisions should specify what happens in the
event of water or grass failure. Will the landlord
provide feed and water? Will the livestock owner
remove the cattle? What adjustments in rent are
needed if these events should occur? Each situation is different; however, one of the purposes of a
written lease is to consider these possible situations and include them in the lease.
Payment schedule: The lease form provides
space for three different methods of payment.
Complete the section for the method to be used.
Three ways to quote pasture rent predominate
and follow methods I or II of the lease form.
1. Per-acre
2. Per-head per month or season
3. Whole tract
Less often used methods:
1. Share of gain
2. Variable rates
The details of these calculations can be shown
in Method III of the lease form.
Part VI
Drafting Your Lease
A copy of the pasture lease form (NCR-109) is
included in this publication. Some of the advantages of a written lease agreement are:
1. Encourages a detailed statement of the agreement, which assures a better understanding by
both parties.
2. Serves as a reminder of the terms originally
agreed upon.
3. Provides a valuable guide for the heirs if either
the tenant or landlord dies.
The agreement should be carefully reviewed
annually to ensure the terms are still applicable
and desirable. The sample lease provides for most
concerns of both the tenant and landlord. The parties can cross out or omit unwanted provisions.
(Both parties must initial these lease changes.)
Before provisions are eliminated, the landlord and
tenant should remember that one of the functions
of a written lease is to anticipate possible developments and to state how to handle such problems
if they actually do develop.
9
Worksheet 1. Landlord Pasture Ownership Costs — Total Per Acre and Per Head
A. Land investment:
No. of acres
_________
Price per acre
$ _________
Land value (No. of acres x Price per acre)
Interest
Land taxes
Land maintenance
$
$
$
$
________
________
________
________
x
x
x
______ %
______ %
______ %
$ ________
$ ________
$ ________
B. Other investments:
___________
___________
___________
Total
Depreciation
Interest *
Repairs
Taxes
Insurance
$
$
$
$
$
________
________
________
________
________
÷
x
x
x
x
______ yrs
______ %
______ %
______ %
______ %
$
$
$
$
$
$ _________
$ _________
$ _________
$ _________
________
________
________
________
________
C. Other costs:
Fertilizer
Other
$ ________
________
D. Labor and management:
Labor
Management
$ ________
________
E. TOTAL PASTURE OWNERSHIP COSTS
$ ________
F. Number of pasture acres:
________
G. Pasture ownership costs per acre [total ownership costs (line E) ÷ no. of acres (line F)]:
$ ________
H. Stocking rate: ________ acres per head
I. Ownership costs per acre [costs per acre (line G) x no. of acres per head (line H)]:
$ ________
* Interest charge should be computed on average investment in facilities.
10
Worksheet 2. Livestock Owner Net Returns — Per Head and Per Acre *
A. Animal investment:
Animal purchase cost
___________ lbs
x
$ ___________ per cwt
B. Livestock costs (as percentage of animal investment):
Interest
$ ______ x ______ % x
Taxes, vet, ins., misc.
$ ______ x ______ %
Marketing, hauling
$ ______ x ______ %
Death loss
$ ______ x ______ %
Total
C. Breeding livestock costs:
Depreciation
Bull charge
Total
D. Labor and management:
Labor
Management
Total
$ ______
÷
______ % of yr
______
______
______
______ yrs
$ ________
$ ________
_____ hrs
x
______ per hr
$ ________
________
$ ________
___________ lbs
$ ________
x
$ ___________ per cwt
G. Livestock owner net returns to pasture per head (line F - line E):
H. Stocking rate:
$ ________
________
________
________
$ ________
________
E. TOTAL ANIMAL COSTS PER HEAD:
F. Income:
Animal sold value
$ ________
$ ________
$ ________
___________ acres per head
I. Livestock owner net returns per acre (line G ÷ line H):
$ ________
* For more information, see Farm Management Livestock Cost-Return Budgets available at local and state Extension Service offices.
11
Worksheet 3. Landlord and Livestock Owner Share of Gain Per Animal
Landlord
A. Landlord — investment per head:
Land price
Stocking rate
Investment per head 1
Fence investment per acre
Corral investment per acre
Other investment per acre
Total investment per acre
Facility investment per head 2
$ ________ per acre
________ acres per head
$ ________
________
________
________
$ ________
$ ________
Landlord — costs per head (as percentage of investment per head):
Land interest
$ ________ ✕ ______
Land taxes
$ ________ ✕ ______
Facility expenses
$ ________ ✕ ______
Other costs
$ ________ ✕ ______
B. Livestock owner — investment per head:
Animal purchase weight per head
Animal purchase cost per cwt
Investment per head 3
Livestock
owner
%
%
%
%
$ ________
________
________
________
________ lbs
$ ________
$ ________
Livestock owner — costs per head (as percentage of investment per head):
Interest
$ ________ ✕ ______ %
Taxes, vet, misc.
$ ________ ✕ ______ %
Marketing, hauling
$ ________ ✕ ______ %
Death loss
$ ________ ✕ ______ %
Labor ( ________ hours per head 5 $ ________ per hour)
Management charge
$ ________
________
________
________
$ ________
________
Breeding livestock costs
Depreciation
Breeding charge
$ ________
________
C. TOTAL COSTS PER HEAD
$ ________ $ ________
$ ________
______ %
______ %
% landlord
% livestock owner
D. Value of weight gain:
Animal sold value ( ________ lbs ✕ $ ________ per cwt)
Less animal purchase cost
Net returns on animals
_____ % to landlord
_____ % to livestock owner
$ ________
$ ________
$ ________
$ ________
D = depreciation = ________ %; I = interest = ________ %; R = repairs = ________ %;
T = taxes = ________ %; I = insurance = ________ %
TOTAL = ________ %
Land price per acre ✕ acres per head
Investment per acre ✕ acres per head
3
Pounds per head ✕ hundredweight
1
2
12
$ ________
Pature Lease
North Central Regional
Publication No. 109 (Revised 1996)
This form can provide the landlord and tenant with a guide for developing
an agreement to fit their individual situation. This form is not intended to
take the place of legal advice pertaining to contractual relationships
between the two parties. Because of the possibility that an operating
agreement may be legally considered a partnership under certain
conditions, seeking proper legal advice is recommended when developing
such an agreement.
This lease entered into this ___________ day of _______________________ , 19 __________ , between
________________________________ , landlord, of ______________________________________________
(pasture owner)
______________________________________________
(address)
________________________________ , spouse, of ______________________________________________
______________________________________________
(address)
hereafter known as “the landlord,” and
_________________________________ , tenant, of ______________________________________________
(livestock owner)
______________________________________________
(address)
________________________________ , spouse, of ______________________________________________
______________________________________________
(address)
hereafter known as “the tenant.”
I. PROPERTY DESCRIPTION
The landlord hereby leases to the tenant, to occupy
and use for pasture purposes, the following described
property: __________________________________
_________________________________________
_________________________________________
_________________________________________
consisting of approximately __________ acres situated
in __________________________ County (Counties),
________________ (State) and on any other land that
the landlord may designate by mutual written agreement.
C. Amendments. Amendments and alterations to this
lease shall be in writing and shall be signed by both
the landlord and tenant.
D. No partnership created. This lease shall not be
deemed to give rise to a partnership relation, and
neither party shall have authority to obligate the other
without written consent, except as specifically
provided in this lease.
E. Binding on heirs. The terms of this lease shall be
binding upon the heirs, executors, administrators, and
successors of both landlord and tenant in like manner
as upon the original parties, except as provided by
mutual written agreement otherwise.
F. Transfer of property. If the landlord should sell or
otherwise transfer title to the farm, such action will
be done subject to the provisions of this lease.
G. Right of entry. The landlord, as well as agents and
employees of the landlord, reserve the right to enter
the farm at any reasonable time for purposes (a) of
consultation with the tenant; (b) of making repairs,
improvements, and inspections; and (c) after notice
of termination of the lease is given, of performing
customary seasonal work, none of which is to
interfere with the tenant in carrying out regular
operations. Landlord also may request right of entry
to hunt and fish.
H. Additonal agreements regarding term of lease:
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
II. GENERAL TERMS OF LEASE
A. Term. [If a continuing lease is desired, use paragraph
(1) and strike out (2).]
(1) Continuing lease — The term of the lease shall
by _____ year(s), commencing on the ________
day of ______________ , 19_____ , and shall
continue in effect from year to year thereafter (as
an annual lease) unless written notice of
termination is given by either pary to the other at
least _____ days prior to expiration of this lease
or the end of any year of continuation. If a definite
term is desired, use paragraph (2) and strike out
paragraph (1). No notice of termination is
necessary if paragraph (2) is used. (Note: State
laws differ on the duration of agricultural leases.)
(2) Annual lease — The term of this lease shall be
______ year(s), commencing on the ______ day
of ____________ , 19_____ , and ending on the
______ day of _____________ , 19______.
B. Review of lease. A request for general review of the
lease may be made by either party at least ____ days
prior to the final date for giving notice to terminate
the lease.
13
I. Animal units (maximum allowable). Not more than
______ animal units shall be kept in the pasture at
any one time without the express written consent of
the landlord. Deliberate violation of this provision shall
constitute grounds for termination of this lease.
(In general, each 1,000 pounds of average weight
shall be one animal unit. If the pasture owner and
the owner of the livestock prefer, they can use the
following basis for calculating animal units: one bull,
1.25 animal units; one 1,000-pound cow, 1 animal
unit; one yearling steer or heifer, 0.75 animal unit;
calf, 6 months to 1 year, 0.5 animal unit; 3 to 6 months,
0.3 animal unit; sheep, 5 per animal unit; horse, 1.25
animal unit.)
Stocking rate
Bulls ...................................
Cows ..................................
Yearling steers ...................
Yearling heifers ..................
Calves, 6 to 12 mos. ..........
Calves, 3 to 6 mos. ............
Other ..................................
Number
head
________
________
________
________
________
________
________
Count livestock not less
than once per ______ .
Return stray animals
to pasture.
Call veterinarian in case
of emergency.
Pay veterinary expenses.
Provide loading and
unloading facilities.
Furnish supplementary
feed, if needed.
Notify other party of shortage in count ______ .
Provide facilities for
fly control.
Keep fly-control facilities
in working order.
Liability insurance.
Number
animal units
________
________
________
________
________
________
________
Landlord
Tenant
______
_____
______
_____
______
_____
______
_____
______
_____
______
______
_____
_____
Tenant
______
_____
______
_____
______
______
_____
_____
______
_____
______
_____
______
_____
______
_____
______
______
_____
_____
(3) Additional agreements:
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
III. OPERATION AND MAINTENANCE
A. The livestock owner agrees:
(1) Not to pasture livestock that continue to break
through fences. Should any animal be found
outside the pasture on at least three occasions,
the pasture owner may request its removal.
(2) Not to assign rights and duties under this lease
without the written consent of the pasture owner.
(3) Not to put any cattle in pasture without getting
specific approval from the pasture owner in
advance regarding number, health, sex, breed,
and age.
(4) To furnish health certificates as follows:
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
B. Both agree:
(1) Not to obligate the other party. Neither party
hereto shall pledge the credit of the other party
hereto for any purpose whatsoever without the
consent of the other party. Neither party shall be
responsible for the debts or liabilities incurred,
or for damages caused by, the other party.
(2) Responsibilities. Additional responsibilities for
each party shall be divided as follows:
Inspect fences not less
than once per ______ .
Furnish labor for repair
of fences.
Furnish materials for repair
of fences.
Supervise supply of water
to livestock.
Furnish labor for repair
of water system.
Materials for repair
of water system.
Furnish salt & mineral
Landlord
IV. RENTAL CALCULATIONS
AND PAYMENT SCHEDULE
(Use method I, II, or III and strike out the two
methods not used.)
Method I — The tenant owner agrees to pay $ ______
per acre for use of the property described in
paragraph I. Total rent of $ ______ shall be paid as
follows:
$ ______ on or before ______ day of ______ (month)
$ ______ on or before ______ day of ______ (month)
$ ______ on or before ______ day of ______ (month)
$ ______ on or before ______ day of ______ (month)
If rent is not paid when due, the tenant agrees to
pay interest on the amount of unpaid rent at the
rate of ______ percent per annum from the due date
until paid.
Rental adjustment. Additional agreements in
regard to rental payment:
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
Method II — The livestock owner agrees to pay the rates
outlined in Table 1 (the period may be a month,
pasture season, or year).
The minimum rent shall be $ ______. Such rent
shall be required regardless of whether or not
livestock are actually being pastured. The total rent
of $ ______ (from Table 1) shall be paid as follows:
$ ______ on or before ______ day of ______ (month)
$ ______ on or before ______ day of ______ (month)
$ ______ on or before ______ day of ______ (month)
$ ______ on or before ______ day of ______ (month)
If rent is not paid when due, the tenant agrees to
pay interest on the amount of unpaid rent at the
rate of _____ percent per annum from the due date
until paid.
14
Table 1 — Rental rates
Number
Rental rate per period
Total rent per period
Bulls .................................................... _______
✕
$ ________________
=
$
Cows ................................................... _______
✕
$ ________________
=
$
Yearling steers .................................... _______
✕
$ ________________
=
$
Yearling heifers ................................... _______
✕
$ ________________
=
$
Calves, 6 to 12 mos. ........................... _______
✕
$ ________________
=
$
Calves, 3 to 6 mos. ............................. _______
✕
$ ________________
=
$
Other ................................................... _______
✕
$ ________________
=
$
TOTAL RENT ........................................................................................................................................... $
Rental adjustment. Additional agreements in
regard to rental payment:
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
______________
______________
______________
______________
______________
______________
______________
______________
V. ARBITRATION OF DIFFERENCES
Any differences between the parties as to their
several rights or obligations under this lease that are
not settled by mutual agreement after thorough
discussion, shall be submitted for arbitration to a
committee of three disinterested persons, one selected
by each party hereto and the third by the two thus
selected. The committee’s decision shall be accepted
by both parties.
Method III — Other rental arrangements (share-of-gain,
etc.)
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
Executed in duplicate on the date first above written:
_________________________________________
(tenant/livestock owner)
_________________________________________
(landlord/pasture owner)
_________________________________________
(tenant’s spouse)
_________________________________________
(landlord’s spouse)
STATE OF _____________________________
COUNTY OF ___________________________
On this ____________________ day of _________________________ , A.D. 19__________ , before me, the
undersigned, a Notary Public in said State, personally appeared _________________________ ,
_________________________ , _________________________ , and _________________________ to me
known to be the identical persons named in and who executed the foregoing instrument, and acknowledged that
they executed the same as their voluntary act and deed.
_________________________________________
Notary Public
15
Other North Central Regional publications in this series:
NCR-75, Fixed and Flexible Cash Rental Arrangements for Your Farm
NCR-105, Crop-share or Crop-share/Cash Rental Arrangements for Your Farm
NCR-107, Livestock Share Rental Arrangements for Your Farm
NCR-148, Irrigation Crop-share and Cash Rental Arragements for Your Farm
NCR-214, Rental Agreements for Farm Machinery, Equipment, and Buildings
The following NCR lease forms also are available:
NCR-76, Cash Farm Lease (with Flexible Provisions)
NCR-77, Crop-share or Crop-share/Cash Farm Lease
NCR-106, Irrigation Crop-share or Crop-share/Cash Farm Lease
NCR-108, Livestock-share Farm Lease
NCR-109, Pasture Lease
NCR-215, Farm Machinery, Building, or Equipment Lease
North Central Farm Management Extension Committee
Burton Pflueger, Chairman, South Dakota State University
George Patrick, Vice Chairman, Purdue University
Richard Trimble, Secretary, University of Kentucky
Bruce Jones, Past Chairman, University of Wisconsin
Dick Clark, West Central Research and Extension Center
William Edwards, Iowa State University
Steve Halbrook, Farm Foundation
Richard Hawkins, University of Minnesota
Norlin Hein, University of Missouri
Wayne Howard, University of Guelph
Harlan Hughes, North Dakota State University
Rodney Jones, Kansas State University
Dale Lattz, University of Illinois
Ross Love, Oklahoma State University
Ron Plain, University of Missouri
David Petritz, Purdue University
Gary Schnitkey, Ohio State University
Gerald Schwab, Michigan State University
Don West, USDA-Extension Service
Ralph Winslade, Guelph Agriculture Center
North Central Regional Extension publications are subject to peer review and prepared as a part of the Cooperative Extension activities of the thirteen
land-grant universities of the twelve North Central States, in cooperation with the Extension Service—U.S. Department of Agriculture, Washington, D.C.
The following universities cooperated in making this publication available:
University of Illinois
Ag. Publication Office
69 Mumford Hall
Urbana, IL 61801
(217) 333-2007
Purdue University
Publication Mailing Room
301 S. Second Street
Lafayette, IN 47905-1232
(317) 494-6795
Iowa State University
Publications Distribution
Printing & Pub. Bldg.
Ames, IA 50011-3171
(515) 294-5247
Lincoln University
Cooperative Extension Service
900 Moreau Drive
Jefferson City, MO 65101
(314) 681-5557
Michigan State University
Bulletin Office
10B Ag. Hall
East Lansing, MI 48824-1039
(517) 355-0240
North Dakota State University
Ag. Communications
Box 5655, Morrill Hall
Fargo, ND 58105
(701) 237-7881
University of Minnesota
Distribution Center
3 Coffey Hall, 1420 Eckles Ave.
St. Paul, MN 55108-6064
(612) 625-8173
Ohio State University
Publications Office
385 Kottman Hall
2021 Coffey Rd.
Columbus, OH 43210-1044
(614) 292-1607
University of Missouri
Extension Publications
2800 McGuire
Columbia, MO 65211-0001
(314) 882-2792
University of Nebraska
Dept. of Ag. Comm.
Lincoln, NE 68583-0918
(402) 472-3023
* Kansas State University
Distribution Center
Umberger Hall
Manhattan, KS 66506-3400
(913) 532-5830
South Dakota State University
Ag. Comm. Center
Box 2231
Brookings, SD 57007-0892
(605) 688-5628
University of Wisconsin
Cooperative Extension Publications
Rm. 245
30 N. Murray Street
Madison, WI 53715-2609
(608) 262-3346
* Publishing university
For copies of this publication and other North Central Regional Extension publications, write to: Publications Office, Cooperative Extension Service,
in care of the university listed above for your state. If they do not have copies or your university is not listed above, contact the publishing university
as indicated by an asterisk.
Programs and activities of the Cooperative Extension Service are available to all potential clientele without regard to race, color, national origin, age,
sex, religion, or disability.
In cooperation with the NCR Educational Materials Project.
Issued in furtherance of Cooperative Extension work, Acts of Congress on May 8 and June 30, 1914, in cooperation with the U.S. Department of
Agriculture and Cooperative Extension services of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio,
South Dakota, and Wisconsin. Richard D. Wootton, Associate Director, Cooperative Extension Service at Kansas State University, Manhattan, Kansas.
4/97 — 750
ExEx5071
C o l l e g e
o f
A g r i c u l t u r e
&
B i o l o g i c a l
S c i e n c e s
/
U S D A
Pasture Lease Agreements
Burton Pflueger, Extension economist
Any lease is basically an agreement that gives the use of
an asset to a lessee for a specific period of time at a
specified rate. A lease does not transfer title of ownership nor an equity interest in the asset.
Variations In Pasture
"Pasture" is a word with many meanings. Total production as well as the seasonal pattern of production
depends a great deal on the kinds of grasses and legumes
in the pasture. Some South Dakota land is pasture only
because it is too rough, rocky, or wet to cultivate. If management in past years has been poor, pastures might produce more weeds and trees than forage.
Labeling a document as a lease does not necessarily
mean it is a lease according to the Internal Revenue
Service (IRS). This Extension Extra does not address any
of the questions concerning the IRS treatment of a lease;
if you have such questions, contact your tax management
professional. Also, this document does not address any
of the questions concerning the legalities of the lease
which should be handled by professional legal counsel.
At the other extreme are fertilized grass-legume pastures
on tillable land. Vegetation may include warm and/or
cool season grasses, fescues, and legumes and weeds
will be controlled and good water will be available.
These pastures are highly productive and profitable when
used in good livestock programs.
Unlike cash and share rental arrangements for cropland,
the terms of pasture rental arrangements can vary substantially. You can consult other publications in this
series or go to the publication C271, South Dakota
Agricultural Land Market Trends 1991-2006, on the
internet at http://agbiopubs.sdstate.edu/articles/C271.pdf.
The protein content of different pasture plants varies and
is reflected in production gains or milk production. Good
grass-legume mixtures produce larger gains and more
milk than straight grass pastures, especially during the
drier part of the pasture season.
Be cautioned that adjustments should be made to current
market rental rates to account for differences in productivity of the land, use of improvements, and other factors
of the rental arrangement. Adjustments to reported rental
rates are important since the quality of pastureland varies
widely. An arrangement used by a farmer for improved
pasture likely is not appropriate for a neighbor who has
unimproved pasture partially covered in brush and trees.
Pasture rental rates and terms thus may vary widely
within the same locale yet still be acceptable to both
landlord and tenant.
THE PASTURE RENTAL MARKET
Like other leasing arrangements, the terms of pasture
leases reflect local custom, suitability and quality considerations of the parcel, the contributions of one or both
parties, and bargaining. Leases are may be oral, may be
shorter-term than cropland leases and may seldom
involve more than a single pasture season. The most
difficult part of pasture leasing is determining a rental
rate agreeable to both parties.
1
Variations in Rates
During seasons when rainfall is good and grass is abundant, the demand for rental pasture is low and "customary" pasture rents tend to be lower. During dry seasons,
the reverse is true. But in general, variations in rent from
year to year are small—smaller than the variations in
production in most cases.
Table 1. Animal unit values for different kinds of cattle and
other livestock.
Class of livestock
Cows (1,000 pound weight)
Cow and calf pairs
Two-year-old steers
Yearling cattle (18-24 mo.)
Yearling cattle (12-17 mo.)
Calves (under 12 mo.)
Bulls (mature)
Saddle horses (mature)
Sheep
Farm-to-farm differences in the amount charged for the
use of pasture are seldom as great as differences in productivity. Rents also reflect demand; when numbers and
prices of consuming livestock are high, rents tend to go
up, but again, the changes are comparatively small.
Number of
animal units
1.0
1.3
.9
.8
.65
.5
1.4
1.25
.2
Information from Pasture Leases, publication EC-623-W, J.H. Atkinson
and D.C. Petritz, Extension economists, Department of Agricultural
Economics, Purdue University, Cooperative Extension Service with reference sited as Valentine, J.F. and D.F. Burzlaff. Nebraska Handbook of
Range Management, E.C. 68-131, University of Nebraska.
Different Methods of Quoting Rent
Generally, pasture rents are quoted either on a per-headper-month basis or on a per-acre basis. You can go to
ExEx5019, Determining Pasture Rents (rev 2002). This
publication includes a discussion of different methods
used to determine rental rates and and is on the internet
at http://agbiopubs.sdstate.edu/articles/ExEx5019.pdf.
To illustrate the different interpretations of an animal
unit, Table 2 can be compared to Table 1. While some
data is consistent between the tables, there are slight differences for specific classes of livestock.
Per head per month
This method is most often used when only a few head of
livestock are involved. The rates usually apply to mature
cows. In most instances, no differentiation is made
between cows with calves, cows in milk but without
calves, and dry cows. Likewise, differences in size of
mature cows are seldom reflected in rental charges
despite the fact that feed consumption increases with
size.
Landlords and tenants will have to reach an agreement
on the definition of animal units if pasture rental rates
will be dependent on the number of animal units utilizing the grazing resource, commonly referred to as the
stocking rate.
Table 2. Suggested animal unit conversion factors for
various classes of cattle.
When pasture is rented on a per-head-per-month basis,
rental rates would be more meaningful if they were
expressed in terms of animal units, e.g., $5.50 per animal
unit per month. Animal units (AU) are generally used as
a basis to standardize and express stocking rates among
different kinds and classes of livestock with similar
dietary preferences. By using the animal unit values
shown in Table 1, a cow-calf pair would be charged
$7.15 per month ($5.50 x 1.3), a yearling in the 12- to
17-month age range, $3.58 ($5.50 x .65).
Class of cattle
Mature bull (>24 months)
Young bull (18-24 months)
Cow and calf pair
Mature cow, non-lactating
Pregnant heifer, non-lactating
(>18 months)
Yearlings (18-24 months)
Yearlings (15-18 months)
Yearlings (12-15 months)
Calves (weaning -12 months)
Calves (weaning at 8 months)
Inconsistencies persist among land management agencies
and within published literature regarding approaches to
quantify AU. For example, some interpretations loosely
define an AU as the forage demanded by a mature cow,
although this value could vary widely depending upon
breed and reproductive status of the cow. Others say that
an AU represents the forage demanded by a standard
livestock unit weighing 450 kg.
Relative
animal unit
1.5
1.15
1.35
1.0
1.0
0.9
0.8
0.7
0.6
0.5
Information from
http://rangelandswest.org/az/inventorymonitoring/animalunits.html
with reference to page 279 of Vallentine, J.F. 1990. Grazing
Management. Academic Press. San Diego, CA. pp 276-280.
2
Stocking rate expresses the actual number of animals on
a management unit throughout the grazing period.
Therefore, stocking rates are the management interface
that relates livestock consumption to forage supply.
Rental rates generally do not adequately reflect differences in stocking rates or in quality of grass. Livestock
owners should keep these factors in mind since variations in either factor can and do affect gains or the
amount of milk produced.
ity of the pasture may be seriously damaged. Therefore,
the landlord has good reason to be interested in a lease
provision which limits the stocking rate to a level which
will result in the greatest production over a period of
years.
When pasture is rented by the acre, the fences, wells, and
power units (windmill or motor) should be in working
order at the start of the pasture season. During the season, it usually is the renter's responsibility to provide the
labor for maintaining both the fence and the power unit.
It is the tenant’s job, also, to make sure salt and water are
available, to keep a record of numbers, and to look after
sick or injured animals. The pasture owner normally supplies materials for repair of fences and major repairs for
the well and power unit.
When pasture is rented on a per-head-per-month basis,
the tenant tends to be interested in getting as much gain
per head as possible. Therefore, the tenant may desire to
keep the stocking rate low to provide as much grazing as
possible per animal unit.
However, there is a stocking level which will give maximum gains per animal. Any reduction in the grazing rate
from that optimum level will not result in additional
gains per animal (the feed will simply be wasted) and
will reduce the potential income to the owner of the pasture without benefiting the livestock owner.
The maintenance responsibilities usually are not assumed
by the renter on a per-head basis; thus, the amount of
rent paid during a season may be a little less when pasture is rented by the acre (assuming comparable stocking
rate).
COMPUTATION OF RENT
Local supply and demand conditions play an important
role in determining pasture rent. If a large quantity of
pasture is for rent in an area and very few producers
need pasture, then the rental rate will likely decline in
that area.
Rent per acre*
Rent charged on a per-acre basis should reflect productivity. Differences in pasture productivity make it impossible to use quoted per acre rates without knowing a
great deal about the particular pasture.
Factors that affect the productivity of pasture include natural soil productivity, kinds of grass and legumes in the
stand, amount and kinds of weeds, previous fertility
practices, stocking rates, source and quality of water, and
condition of fences.
Pastures must be used where and when grown rather than
stored for later use. Since so few alternative uses generally exist for pasture land, the agreed-upon rent must be
established by bargaining between the landlord and the
tenant. In many cases, especially those involving small
acreages, few farmers may be interested in renting, so
the person who can utilize the pasture may get a "bargain."
When pasture is rented by the acre for the season, the
tenant will be interested in maximum production per
acre. He will be inclined to stock a pasture more heavily
if he rents by the acre instead of by the head.
In estimating what he can afford to pay for pasture rent,
the tenant needs to consider his profit potential from
using the pasture. For example, if a rented pasture will
be used to graze steers, the tenant should consider the
price for feeder cattle this spring, what the expected selling price will be this fall, and what some of the costs
associated with the pasturing program will be, such as
supplementary feed, water supply, mineral and salt, medication, implants, and interest on investment in cattle. He
should also estimate his labor costs and possible travel
costs if his home place is far from the cattle. From these,
the maximum amount that he can afford to pay for pas-
From the pasture owner's point of view, the stocking rate
can exceed the long-run optimum level for one or more
seasons but at the expense of reducing the vigor of the
more desirable plants and causing more erosion. If overgrazed long enough, the carrying capacity and productiv* USDA's Agricultural Marketing Service (AMS) provides a
spring report on grazing land rental rates. The “Wyoming,
Western Nebraska and Southwestern South Dakota Annual
Grazing Fee Report” is released in late March and late April. The
report captures a current assessment of market activity.
Numbered TO_LS150, it is online at http://www.ams.usda.gov/
3
ture rent can be estimated. This will be tempered by
quality of pasture and location relative to his home farm
and water supply.
Landlords and tenants are cautioned that these values are
subjective and that if adjustments will be made to rental
rates based on pasture quality, agreement on the adjustment factors needs to be negotiated and agreed upon.
On the other hand, landlords want to recover some of the
costs of owning the pastureland. At a minimum, this
might be property taxes and expenses of maintaining
fences and water supply. Naturally, they hope to receive
some return on their investment in land.
Table 3. Pasture quality adjustment factors
Pasture condition
Lush, green, high protein pasture
Excellent grass pasture
Good pasture
Fair pasture
Poor grasses or considerable weed growth
The costs of fertilizer, fence repair and maintenance of
water supply may be borne by either the landlord or the
tenant. The rent will vary depending upon how these
costs are handled.
A satisfactory rental agreement is one in which all parties understand and willingly agree to the terms and conditions. Once such an agreement is reached, it is critical
that it be written so that both parties can refer to it and
determine their responsibilities.
Pasture condition
Lush legume pasture
Excellent meadow (grass/legume)
Very good permanent pasture
Fair to good permanent pasture
Unimproved poor condition
ALTERNATIVE LAND USE VALUE
If pasture is on tillable land, landowners should think in
terms of what such land might produce in other crops
like corn, soybeans, wheat, or hay. If pasture rents are not
about equal to the net income that could be realized from
other crops, landowners are likely to want to plow up the
pasture and plant crops. On non-tillable land, however,
the possibility may exist to rent the land for recreational
purposes.
Adjustment
factor1
.30
.275
.25
.225
.20
Adjustment
factor2
.22
.20
.18
.15
.12
1 Information from Pasture Leases, publication EC-623-W, J.H.
Atkinson and D.C. Petritz, Extension economists, Department of
Agricultural Economics, Purdue University, Cooperative Extension
Service with factors derived from table on page 11 of EC 627,
New Method of Feeding Milk Cows, C.W. Nibler, University of
Nebraska.
2 Information from Maximizing Fall and Winter Grazing of Beef
Cows and Stocker Cattle, Bulletin 872-98, Ohio State University
Extension.
Renting land for recreational purposes has become popular in recent years and can be a complex venture. For
some landlords, managing and/or leasing land for recreational uses may require additional capital and management resources which may not be available.
Another factor affecting pasture quality is the type of
forage available. Different grasses will produce varying
amounts of forage and may reach their peak suitability
for grazing at different times during the year. Landlords
and tenants may want to consider the type of forages
available in reaching a decision on the number of animal
units supported for a specified length of grazing period.
There is also the obvious—weather will have an impact
on estimated available forage.
ALTERNATIVE FEED COST FOR LIVESTOCK
Under farm conditions, it is difficult to estimate the production of a pasture and arrive at an "ideal" rental rate.
Thus, the formula in Table 4 was devised as a guide to
establishing and evaluating pasture rental charges.
The price of hay used in the formula in Table 4 can be
estimated based on present and past market prices and
the rental rate established in advance. Or, mid-month
prices over the pasture season can be averaged and the
rent determined at the end of the season. A minimum
rent could be established and paid in advance with additional rent, if any, paid at the end of the season. This formula gives pasture and livestock owners a starting point
in discussing pasture rental rates. Customary rates in the
This formula takes into account the price of alternative
feeds and, through a general evaluation of the condition
of the pasture, reflects the kind and condition of the pasture growth. The scarcity of pasture available in a community enters the formula indirectly through the price of
hay. The pasture quality factor is determined based on
classifications as illustrated in Table 3.
4
Table 4. Guide to establishing and evaluating pasture rental charges.1
Average
animal unit
1.2
X
X
(1200-lb cow)
.75
$40.00
X
X
(price of grass hay)
X
(750-lb steer)
.75
Average price of
good hay (per ton)
during pasture season
$50.00
Quality factor
=
Rate per head
per month2
.275
=
$13.20
(excellent pasture factor)
X
.275
=
$10.30
X
.225
=
$6.75
(price of alfalfa hay)
X
$40.00
(in year of lower hay prices)
(fair to good pasture factor)
1 Information from Pasture Leases, publication EC-623-W, J.H. Atkinson and D.C. Petritz, Extension economists, Department of
Agricultural Economics, Purdue University, Cooperative Extension Service based on Nelson, T.R. and L. Bitney, Figuring Pasture Rental
Rates, FM64-7 (mimeo), Dept. of Agricultural Economics, University of Nebraska.
2 To determine rate per acre where pasture owner has no responsibility for supervising livestock, multiply the rate per month by the
number of months, subtract a per head charge for supervision, and divide the remainder by the number of acres required to carry an animal on this pasture.
community and the relative bargaining position for each
party will undoubtedly enter into negotiations and consequently into the final rate agreed upon.
For example, a steer calf may weigh 400 lb May 1 and
be worth $70 per cwt for a total value of $280. On
October 1, the weight might be 600 lb worth $60 per cwt
for a total value of $360. During the 5 months, the value
of the steer increased from $280 to $360 or $80 per
head. This amount would be divided according to the
lease agreement. Agreement should be reached in
advance as to whether death losses are to be included in
the calculation of weight gain.
SHARE OF GAIN
Occasionally, owners of pasture and cattle are interested
in working out a share arrangement. Such an arrangement can divide production and price risk between the
two parties. Under this arrangement, the contribution of
each party is used as a basis for dividing income.
With this "share of gain" arrangement, the tenant shifts
some of the production and price risk to the landlord. In
return, he agrees to allow the landlord to share in unexpected good weight gains and/or prices. Minimum and/or
maximum rental payments can be set if desired.
Contributions of the pasture owner almost always include
land taxes, interest on the pasture investment, and depreciation and repairs on water systems and fences. They
also may include part of the cost of such things as salt,
mineral, and labor. Depending on the ownership of the
cattle, the pasture owner may also bear some of the risk
of cattle death loss.
Contributions of the cattle owner include interest on the
cattle investment and any other contributions such as
grain, salt, mineral, labor, and risk of death loss.
VARIABLE RENTS
Other leasing arrangements could be developed which
would also serve to shift some of the risk and the chance
for profit to the landowner. For example, the risk of poor
weight gain because of weather could be effectively
shifted by charging a fixed amount per pound of gain.
The income to be divided would be the value of the milk
or livestock gains produced from the pasture. The value
of livestock gains should be calculated on the basis of
the net increase in value. This would require a determination of the value of animals pastured at the beginning
and at the end of the pasture season.
To illustrate how this might work, assume the pasture
charge for a yearling steer is $3.50 per month. For a 5month grazing season, this would amount to $3.50 x 5 or
$17.50. During the 150 days on pasture, a 225-lb gain
might be a reasonable expectation. The pasture rent
would amount to 7.8 cents/lb under these circumstances.
5
Instead of charging $3.50 per head per month, the landlord might charge 8 cents/lb of gain. If gain turned out to
be unusually good (perhaps 275 lb), he would receive
$22 for the season instead of $17.50. On the other hand,
if grass was short and the gain was 175 pounds, he
would receive only $14. Pasture owners might not be
willing to assume this kind of risk unless they expect to
receive a little higher rent on the average for doing so.
The following is a checklist of items which might be
included in the lease. Items 1-4 and 10-15 are the minimum essentials for a lease agreement. For a lease to
meet specific legal requirements, the services of a lawyer
may be necessary.
1.
2.
3.
4.
Price change risk can be shifted through a flexible rent
formula. The following is a description of one method. A
base rental rate per acre and a base price (average of
October and November) of good to choice steer calves at
a stated market are established. Each year the rental rate
changes by the same percentage that the price of steer
calves change.
5.
6.
7.
8.
9.
More simply, the per acre rent could be calculated as a
multiple of steer calf prices. For example, if agreement
were reached on a base rent of $30 per acre with a base
calf price of $60 per cwt, the rent multiple would be .5.
If calf prices rose to $70 the next year during the agreedupon time period, rent would rise to $35 per acre. This
procedure can be used to adjust the rent for a given reason or to establish a renewal rate for the following year.
10.
11.
12.
13.
14.
15.
Rent can also be adjusted at the end of the season for
changes in pasture productivity due to weather conditions. This could be done by changing the rent by the
same percentage by which the season's county hay yields
changed from the 5- or 10-year average.
Names, addresses, and interests of parties involved.
Date lease becomes effective.
Date of termination.
Legal description of pasture, possibly supplemented
by a map.
Limitation on number of animals that can be
pastured.
Details of agreement concerning health requirements.
Provisions concerning breachy animals.
Agreement concerning identification.
Agreement relative to male breeding stock to be
pastured and rights of owner of female stock.
Stated responsibilities of both parties relative to
water, salt, repair of fences, counting cattle, etc.
Provision for right of pasture owner to enter pasture.
Provisions concerning subleasing.
Amount of rent or how it is to be calculated.
When rent is to be paid.
Provision for settling disagreements.
Leases may be written to terminate after one or more
time periods (year, month, season). Provision can be
made for re-negotiating the lease during a specified time
prior to termination.
Pasture owners may be interested in keeping their pastures free of soil-borne diseases to protect the health of
their own cattle and cattle accepted for pasturing. This
can be done only if animals known to be sick are kept
out. An affidavit or health certificate from a veterinarian
should provide acceptable evidence of an animal's state
of health and serve as a basis for accepting or rejecting
livestock.
Put the Agreement in Writing
Both landlords and tenants are reminded that it is highly
desirable to put the terms of a lease agreement in writing. For some types of lease agreements, such as leases
for longer than one year, South Dakota Codified Laws
specify that the lease be written. Follow the advice of
your attorney. Sample lease forms can be found elsewhere in this publication series.
Under ordinary conditions, the pasture owner is expected
to provide an adequate source of water. This could be in
the form of ponds or wells with mills (or motors) and
tanks. Cattle owners may wish to do some checking on
the dependability and quality of the water supply before
completing any rental agreement. A shortage of water
can be extremely detrimental to livestock gain and may
necessitate hauling water or removal of stock.
The very process of putting an agreement in writing
tends to force the spelling out of details concerning
agreements which otherwise might not be discussed or
might be understood in only a hazy way. Once these
ideas are put down in writing, they serve as a reminder to
both parties and as a legal record (if properly executed
and signed) of the responsibilities of each party. In case
one or both parties to the agreement should die, the written lease provides a basis for understanding and action
on the part of heirs and estate administrators.
The risk of death loss from poisonous plants often
increases under drought conditions. Consequently, cattle
6
owners have reason to be concerned with the presence of
poisonous weeds and plants and the efforts of the pasture
owner to eliminate them.
female stock may want to reserve the right to remove
them without penalty.
Unless a lease specifically provides for it, a pasture
owner may technically be prevented from entering his
own pasture. It is desirable, therefore, to include a section in the lease which will define the entry rights of the
pasture owner.
Pasture owners who take in livestock for summer pasture
should keep livestock owners informed regarding plans
to add breeding males in a pasture. Some cattle owners
may not want females bred. If plans to include males are
changed after the pasture season begins, owners of
This publication adapted for South Dakota from Pasture Leases, publication EC-623-W, J.H. Atkinson and D.C. Petritz, Extension economists, Department of Agricultural Economics, Purdue University, Cooperative Extension Service and from Computing a Pasture Rental
Rate, File C2-23, D. Hofstrand, and W. Edwards, Ag Decision Maker, Iowa State University, University Extension.
South Dakota State University, South Dakota counties, and U.S. Department of Agriculture cooperating. South Dakota State University is an Affirmative
Action/Equal Opportunity Employer and offers all benefits, services, education, and employment opportunities without regard for race, color, creed, religion,
national origin, ancestry, citizenship, age, gender, sexual orientation, disability, or Vietnam Era veteran status.
EXEX5071. 2007. Access at http://agbiopubs.sdstate.edu/articles/ExEx5071.pdf.
7
ExEx5072
rev 9-07
C o l l e g e
o f
A g r i c u l t u r e
&
B i o l o g i c a l
S c i e n c e s
/
U S D A
Pasture Lease
Burton Pflueger, Extension economist
Date and names of parties. This lease is entered into on _______________, 20_____, between
_____________________________________________________________________________________ (Landlords) Lessor(s) at
______________________________________________________________________________________________(address) and
_______________________________________________________________________________________ (Tenants) Lessee(s) at
________________________________________________________________________________ (address).
The parties to this lease agree to the following provisions.
Description of land. The Lessor rents and leases to the Lessee, to occupy and to use for agricultural purposes only, the following
real estate located in the County of ______________________ and the State of ________________________, described as follows:
__________________________________________________________________________________________________________
__________________________________________________________________________________________, commonly known
as the ______________________________________farm and consisting of approximately __________acres, together with all buildings and improvements thereon belonging to the Lessor, except _______________________________________________________
__________________________________________________________________________________________________________
__________________________________________________________________________________________________________.
Length of tenure. The term of this lease shall be from ______________________, 20_____, to _____________________, 20_____,
and the Lessee shall surrender possession at the end of this term or at the end of any extension thereof. Extensions must be placed
in writing on this lease, and both parties agree that failure to execute an extension at least ______________months before the end of
the current term shall be constructive notice of intent to allow the lease to expire.
Amendments and alterations to this lease may be made in writing in the space provided and the end of this form at any time by
mutual agreement. If the parties fail to agree on proposed alterations, the existing provisions of the lease shall control operations.
Section 1. Animal Units
Not more than _________ animal units shall be kept in the pasture at any one time without the express written consent of the Lessor.
Deliberate violation of this provision shall constitute grounds for termination of this lease.
Stocking rate
Number
head
Number
animal units
Rental rate
per period
Total rent
per period
Bulls
_______
_______
_______
_______
Cows
_______
_______
_______
_______
Yearling steers
_______
_______
_______
_______
Yearling heifers
_______
_______
_______
_______
Calves, 6 to 12 mos.
_______
_______
_______
_______
Calves, 3 to 6 mos.
_______
_______
_______
_______
Other
_______
_______
_______
_______
Other
_______
_______
_______
_______
Section 2. Rental Calculations and Payment Schedule
(Use method I, II or III and strike out the two methods not used.)
Method I
The Lessor agrees to pay $__________ per acre for use on the property described in paragraph I. Total rent of $____________ shall
be paid as follows:
$______ on or before ______ day of ______(month)
$______ on or before ______ day of ______(month)
$______ on or before ______ day of ______(month)
$______ on or before ______ day of ______(month)
Rental adjustment. Additional agreements in regard to rental payment: __________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
Method II
The Lessee agrees to pay a rate based on AUMs as identified in Section 1. (the period may be a month, pasture season, or year).
The minimum rent shall be $______. Such rent shall be required regardless of whether or not livestock are actually being pastured.
The total rent of $______ shall be paid as follows:
$______ on or before ______ day of ______(month)
$______ on or before ______ day of ______(month)
$______ on or before ______ day of ______(month)
$______ on or before ______ day of ______(month)
Rental adjustment. Additional agreements in regard to rental payment: __________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
2
Method III Other rental arrangements (share-of-gain, etc.)
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
Signatures of Parties to Lease
________________________________________________________________Landowner
_____________ Date
________________________________________________________________Landowner
_____________ Date
________________________________________________________________Tenant
_____________ Date
________________________________________________________________Tenant
_____________ Date
Extensions to the Lease
Lease Extension # 1
Lease Extension # 2
This lease, originally dated ____________, 20___ ,
This lease, originally dated _________, 20___ ,
shall be extended . . .
shall be extended . . .
From ____________________, 20_____,
From ____________________, 20_____,
To ______________________, 20_____.
To ______________________, 20_____.
Signed: __________________, 20_____
Signed: __________________, 20_____
________________________________________Lessor
________________________________________Lessor
________________________________________Tenant
________________________________________Tenant
Modified for South Dakota from Illinois Farmdoc Pasture Lease Form.
South Dakota State University, South Dakota counties, and U.S. Department of Agriculture cooperating. South Dakota State University is an Affirmative
Action/Equal Opportunity Employer and offers all benefits, services, education, and employment opportunities without regard for race, color, creed, religion, national origin, ancestry, citizenship, age, gender, sexual orientation, disability, or Vietnam Era veteran status.
EXEX5072rev. 2007. Access at http://agbiopubs.sdstate.edu/articles/ExEx5072.pdf.
3
FR-8-06­—page 5
Sample Pasture Lease Agreement
(Not a legal document.)
I. Parties:
This lease entered into this ________________________ day of ___________________, ________, between
_____________________________________, landlord, of ____________________________________________
pasture owner
address
hereafter known as “the landlord,” and ____________________________________________, tenant, of
livestock owner
______________________________________________________________________.
address
II. Property Description
The landlord hereby leases to the tenant, to occupy and use for pasture purposes, the following described property:
_______________________________________________________________________________________________
_______________________________________________________________________________________________
consisting of approximately _________________ acres situated in _________________________________________
County (Counties), _________________ (State), and on any other land that the landlord may designate by mutual
written agreement.
III. General Terms of Lease
A. Term (select one option).
1.) Annual lease. The term of this lease shall be
________________, commence on the ________ day
of ____________, and end on the _________ day of
______________.
2.) Continuing lease. The term of the lease shall be
__________ year(s), commencing on the _________ day
of ______________, _____, and shall continue in effect
from year to year thereafter (as an annual lease) unless
written notice of termination is given by either party to
the other at least _________ days prior to expiration of
the lease or the end of any year of continuation.
(Note: State laws differ on the duration of agricultural leases.)
B. Review of lease. A request for general review of
the lease may be made by either party at least ________
days prior to the final date for giving notice to terminate
the lease.
C. Amendments. Amendments and alterations to this
lease shall be in writing and shall be signed by both the
landlord and tenant.
D. No partnership created. This lease shall not be
deemed to give rise to a partnership relation, and neither
party shall have authority to obligate the other without
written consent, except as specifically provided in this
lease.
E. Binding on heirs. The terms of this lease shall be
binding upon the heirs, executors, administrators, and
FR-8-06­—page 6
successors of both landlord and tenant in like manner as
upon the original parties, except as provided by mutual
written agreement otherwise.
F. Transfer of property. If the landlord should sell or
otherwise transfer title to the farm, such action will be
done subject to the provisions of this lease.
G. Additional agreements regarding terms of lease:
_____________________________________________
_____________________________________________
_____________________________________________
IV. Normal Units — Maximum Allowable:
Not more than _________ animal units shall be kept in
the pasture at any time. Violation of this provision shall
constitute grounds for termination of the lease unless
the pasture owner first secures in writing the consent of
the lessee. Each 1,000 pounds of average weight for the
pasture period shall be considered an animal unit.
_______
If the pasture owner and the owner of the livestock prefer, they can
use the following basis for calculating animal units: 1 bull, 1.3
animal units; one 1,000 lb. cow, 1 animal unit; 1 yearling steer or
heifer, 0.8 animal unit; calf, 6 months to 1 year, 0.6 animal unit; calf,
3 to 6 months, 0.3 animal unit; sheep. 5 per animal unit; horse 1.3
animal units.
provided to the owner of the pasture. Such
list shall be kept up to date throughout the
lease.
d. Not to put any cattle in pasture without
getting approval from the pasture owner
in advance regarding number, health, sex,
breed, and age.
2. The pasture owner agrees:
a. To place the perimeter fences and necessary
cross fences in serviceable condition prior to
the date livestock are brought to the pasture
and to maintain the fences during the pasture
season.
b. To provide an adequate source of water
throughout the pasture season. Violation of
this subsection shall constitute grounds for
termination of the lease.
c. To inform all livestock owners at the time
this contract is completed of any plans for
putting any male animal(s) into the pasture,
including a description and approximate
dates of entry and withdrawal. Such
intentions shall be made a matter of record
as follows:
Description of Bull(s)
(breed, markings, or registration
number, etc.)
Date of
Entry
Date of
Removal
V. Duties:
1.) The livestock owner agrees:
a. Not to pasture livestock known to be
breachy (apt to break fences or break
out of pasture). Should any animal be
found outside the pasture on at least three
occasions, the pasture owner may request its
removal.
b. Not to assign his/her rights and duties under
this lease without the written consent of the
pasture owner.
c. To brand or tag all livestock in a manner
sufficient to determine identity of ownership.
A written list of all animals beyond weaning
age entering the pasture together with brand
description and classifications according
to breed, age grouping, and sex shall be
In the event the pasture owner should wish to put male
animals not described above into the pasture, he shall
give all owners of female stock notice of his intention
to do so at least ________ days in advance of actually
doing so. Owners of female stock shall then have the
option of removing female stock without liability for any
rental charges on the animals removed for the remainder
of the season. Failure to remove female stock during the
specified length of time shall be interpreted to mean that
the owner has not objected to the pasture owner’s stated
intention and this contract shall continue to be binding.
VI.Both Agree:
1.) Not to obligate the other party. Neither party
hereto shall pledge the credit of the other party
FR-8-06­—page 7
hereto for any purpose whatsoever without the
consent of the other party. Neither party shall be
responsible for the debts or liabilities incurred or
for damages caused by the other party.
2.) Responsibilities. Additional responsibilities for
each party shall be divided as follows:
Livestock Owner
Pasture Owner
Inspect fences not
less than once per
_________
Furnish labor for
repair of fences
of performing customary seasonal work, not of which
is to interfere with the tenant in carrying out regular
operations. Due care shall be exercised to ensure that
gates are closed upon entering and leaving the premises.
Pasture owner may request right of entry to hunt and
fish.
VIII.Computation of Rent: (Select one method and
strike out the other not used.)
Method I. Per Head per Month Rental:
The livestock owner agrees to pay the following rates
per animal unit per month $ ________.____/AUM.
Furnish materials
for repair of fences
Furnish materials
for repair of water
system
Number
Head
X
Number
Animal
Units
=
Total
Rent per
Period
Bulls
$
Cows
$
Yearling
steers
$
Yearling
heifers
$
Call veterinarian in
case of emergency
Calves,
6 mons.-1 yr.
$
Pay veterinary
expenses
Calves,
3-6 mons.
Provide loading
and unloading
facilities
Sheep
$
Horses
$
Other
$
Total Rent
$
Furnish salt and
minerals
Count livestock not
less than once per
__________
Furnish
supplementary
feed, if needed
Notify other party
of shortage in
count
Provide facilities
for fly control
Keep fly control
facilities in working
order
Liability Insurance
VII. Right of Entry:
Both parties and agents or employees, therefore, shall
have the right to enter the pasture at any time for any
legitimate purposes: (a) of consultation with the tenant;
(b) of making repairs, improvements, and inspections;
and (c) after notice of termination of the lease is given,
Method II. Per Acre Charge
The livestock owner agrees to pay $________ per acre
for use of the land described in item II.
Method III. Payment for Gain
Livestock shall be weighed prior to entering the pasture
at ____________________________ and upon leaving
the pasture at __________________ ________________
________________________.
Weighing shall be at the expense of the livestock
owner, and in the presence of the pasture owner or his
representative.
The net increase in weight will be paid at a rate of
_______________ per pound.
FR-8-06­—page 8
Share of Gain Rental:
The livestock owner agrees to pay _________ percent
of the value of growing animals at weaning time; and
$_________ per head per month for each non-producing
animal. (examples: bulls, rams, or cows and heifers
without calves.)
Except by written consent of the pasture owner, such
rental shall be paid on not less than ________________
animal units, regardless of whether or not the minimum
number is actually pastured. If there are less than the
minimum number, the rental shall be calculated on the
basis of the average charge for those cattle in the pasture.
X.
Arbitration:
In case of disagreement relative to any provision of this
lease, such dispute shall be referred to an arbitration
committee composed of one member selected by each
party, and a third member selected by the other two. The
decision of the arbitration committee shall be binding
upon the parties of this lease.
IX. Payment Schedule
Rent shall be due and payable when all stock has been
removed by the livestock owner, or by the following
schedule:
XI. Notarization
$_______ on or before _____ day of _______ (month)
Executed in duplicate on the date first above written:
$_______ on or before _____ day of _______ (month)
_____________________________________________
$_______ on or before _____ day of _______ (month)
tenant/livestock owner
$_______ on or before _____ day of _______ (month)
_____________________________________________
If rent is not paid when due, the tenant agrees to pay
interest on the amount of unpaid rent at the rate of
_______ percent per annum from the due date until paid.
Rental adjustment. Additional rental payment
agreement:
_____________________________________________
_____________________________________________
_____________________________________________
landlord/pasture owner
State of _______________________________________
County of _____________________________________
On this ________________ day of ________________ ,
A.D. ____________, before me, the undersigned, a
Notary Public in said State, personally appeared ____
________________________, __________________
___________ to me known to be the identical persons
named in and who executed the foregoing instrument,
and acknowledged that they executed the same as their
voluntary act and deed.
_______________________________________
Notary Public
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