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| Duane A. Lienemann Webster Co. UNL Extention Educator |
Wouldn’t you know that the minute I start thinking Spring, that we get some good old Nebraska Winter weather? You won’t see me complain as at this point I will take any moisture that the good Lord will give us. Last week I started discussing the shape of our pastures and some thoughts that we many need adjust our normal grazing practices in reference to the high probability of another drought for our part of the world over the next several months. With snow on the ground it can be a little tough to visualize dry pastures and depleted grass, but we do need to face this problem and probably the earlier the better. Let’s now continue our discussion from last week and take a look at some other considerations.
Drought can really play havoc on pasture and hay-land, but it can also affect pasture leases. I think we need to take a look at this. All too often, pasture leases fail to include an appropriate plan to adjust to climate or environmental problems. Many pasture leases are verbal arrangements between two parties and with the generational shift occurring in Nebraska, it is much better having the lease in writing so all parties involved know where they stand. The old hand shake and a spit in the dust may not be appropriate in today’s world. Without a plan for dry weather and critical mass on pasture, it should be noted that both the landowner and the tenant are at risk. The landowner risks having the pasture become overgrazed and even damaged to the point of disastrous results to the pasture. It can also result in future weed problems, reduced long-term production, and lowered value. The tenant risks poor performance or health of the livestock due to less forage and lower quality feed as I indicated in last week’s article. This can lead to higher supplemental feed costs or being forced to sell.
We may get to the point this year that a decision needs to be made when the effect of last year’s drought or potential drought has lowered pasture production low enough to jeopardize the pasture and/or the cows? And, what should be the adjustment in the rent payment? It is difficult to say exactly how it needs to be. I do suggest however that it is probably the time now to discuss these issues as landlord and tenant. First, I must point out that it is best to design the lease so both the landowner and tenant share in the opportunity and risk associated with drought by adding an appropriate escape clause due to drought. Be sure to list the length of the grazing period in the lease. We normally think of a five month grazing period with many utilizing a 1-2 week grace period. As I pointed out last week, we may want to shrink that this year and start our grazing period 2-6 weeks later, depending on the moisture and grass we do get, and perhaps end grazing earlier! We also want to make sure that stocking rates are specified in the lease. We normally, on an average, suggest about 4-6 acres per cow/calf pair (adjusted for cow and calf size) in a normal year. We may want to, at least this year, go to 6-8 acres per pair.
More than ever, I feel that it is best to get it all down in writing to avoid any misunderstandings later. Any problems I have seen over the last few years have primarily been because of verbal pasture leases. It is important to note that, as far as I know, there is no six month notice requirement on a verbal pasture lease like there is cropland, which normally is August 31st. That makes this issue rather dicey at times. There are extenuating circumstances, but if only pasture or rangeland is involved, that seems to be the nature of the beast. Drought or a sudden notification can cause a lot of headaches. But if you’ve planned ahead, making sudden adjustments to your pasture leases won’t be one of them.
I believe that the biggest consideration for pasture rental rates for 2013 will be the condition of the pasture. We need to take into account the significant drought conditions that persisted in much of southern Nebraska in 2012 and possible lingering effects for 2013 and particularly the extremely likelihood of an extended drought through this upcoming grazing season. Thus, if stocking rates need to be reduced in 2013 due to poor forage conditions, it would follow that pasture rental rates on a per acre basis should decrease from last year. This provides a good example why producers and landowners should focus on the rental rate per head (or per pair) as opposed to the rate per acre.
What is important is that landowners and producers communicate with each other to make sure stocking rates are adjusted so as to protect the long‐term productivity of the pasture. It is important that we make sure we have an appropriate stock density so we're not overgrazing the pasture, which will degrade the quality of the pasture, grass health and thus the ultimate welfare of the cattle, which is not in the interest of either party. Low-yielding and poor-quality forage means fewer livestock can graze, and the expectation of gain is going to be less. And, of course, the landowner is left with a property that is not as valuable if it's not taken care of. It takes years for pasture to recover from drought, and even longer if overgrazed!
I know that it is tradition to go on a per acre basis in this area, but we may have to change and start with an agreement of the number of acres allowed per pair, and then base our lease on a dollar rate per head per month or even per grazing day. UNL studies suggest rental rates for Southern Nebraska in 2012 was an average of $38/Cow-Calf Pair/Month. That figures to about $1.25 per grazing day. If the insistence for per acre basis persists, then it needs to be lowered on a percentage basis for a shorter grazing season. Also, don’t forget that when it comes to making rental agreements, there are several considerations for both parties. Just like with any rental agreement, individuals are encouraged to understand that there are responsibilities that the landowner has and that the renter has. And some of these are negotiable. It's important to have a conversation about what those negotiable points are and then move toward a more firm price that is fair to both parties.
The preceding information comes from the research and personal observations of the writer which may or may not reflect the views of UNL or UNL Extension. For more further information on these or other topics contact D. A. Lienemann, UNL Extension Educator for Webster County in Red Cloud, (402) 746-3417 or email to: dlienemann2@unl.edu or go to the website at: http://www.webster.unl.edu/home
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