Forge an Equitable Crop-Residue Grazing Lease

With a a well-designed lease agreement, grazing on harvested fields provides value to the landowner and cattle producer. 

 

With harvest underway, Corn Belt farmers and beef producers are hammering out lease agreements for grazing cattle on crop residues. Winter corn-stalk grazing generally works out as a win-win for farmers and ranchers, but equitable lease rates can vary depending on variables such as competitive feed prices, stocking rates and the value of other options available to the farmer such as baling the stover or leaving it in the field.

According to a University of Nebraska report, multiple trials have shown grazing corn residue generally does not negatively affect subsequent crop yields, and in some cases improves yields. Grazing generally leaves more residue in the field compared with baling, and while cattle remove some nutrients, their manure returns nutrients and organic material to the soil.

Grazing leases typically are priced on a per-acre basis or on the basis of animal units per month (AUM) of grazing. William Edwards, PhD, a retired economist at Iowa State University, provides a relatively simple example of pricing on a per-acre basis using the value of stover relative to hay. Corn stover, he says, can replace about 25 pounds of hay equivalent per day for a medium-sized cow, or .375 tons per month. If hay is priced at $100 per ton, the cost is $37.50 per cow per month, so each acre of stover grazed replaces $18.75 worth of hay. However, Edwards notes, the person renting the stover may incur some costs for providing water or fencing, and for moving the cows to the field, which reduces the affordable rent.

ISU’s annual Cash Rental Rates for Iowa Survey for 2017 shows seasonal lease rates for corn-stalk grazing ranging from $8.00 to $12.00 per acre in different regions across Iowa. ISU also offers an online Corn Stover Pricer spreadsheet decision tool, which allows the user to enter variables such as hay prices, costs of baling and the value of baled stover in determining a fair price for a grazing lease.

In addition to the price of the lease, those written lease agreements should include several important details, say University of Nebraska Beef Systems Specialist Mary Drewnoski, PhD, and Economist Jay Parsons, PhD. The agreement should specify a start date for grazing, with adjustments build in to account for delays in harvest. Both parties also should agree on a date for removing cattle that allows ample time for spring field work. Build in some flexibility in case weather or other factors delay moving cattle.  

The agreement also should specify who is responsible for expenses and labor associated with fencing, water supplies, routine cattle care and supplemental feeding. Some landowners provide some or all of these services while others leave them entirely up to the cattle owner, with lease prices adjusted accordingly.

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