What is a pasture worth? A pasture is like a house, crop field or anything else being rented, and is worth what someone is willing to pay. The price we can charge for land rental is directly related to demand.
If we do not have competition for land, then we will be unable to get top dollar. Some parcels do not have a great deal of livestock producers living nearby. If a farmer must travel great distances to care for livestock, the property is obviously worth less to them.
On the other hand, if we have many neighbors who would benefit from the extra ground, the land becomes more valuable. To coin a real estate phrase, “location, location, location.”
Another factor influencing pasture rental rate is topography. Is the pasture flat and machinery accessible? Pastures which are covered with scrub brush, are steep, rocky and partially inaccessible to farm machinery are not as desirable. In other words, pastures and land are not all created equal in terms of suitability for livestock production.
Pasture field size makes a difference. Larger pastures can be worth more since they have a larger livestock-carrying capacity. For example, a 10-acre pasture in southeastern Ohio with an annual production of 2.5 tons per acre of forage dry matter would yield 25 tons annually or 50,000 pounds of forage.
If the pasture is one big square with no cross fencing or rotational grazing system developed, then approximately one-half of this annual forage dry matter production would be available, or 25,000 pounds. A 1,300-pound cow eating 2.5% of her body weight per day in forage dry matter, over a year, would need 11,863 pounds of forage dry matter.
This means that 10 acres could not handle very many cows annually without an improved grazing system or supplementation. Therefore, size makes a difference. It is not desirable for most livestock producers to carry two to three cows per farm at several locations. Conversely, a large farm with paddocks developed, good water distribution, fencing and livestock working facilities is worth much more.
There are many different types of farm rental agreements. We recommend that all rental agreements be in writing. The OSU website — farmoffice.osu.edu/our-library/farm-leasing-law — discusses a variety of important aspects for landowners and tenants to consider when entering into a lease agreement. In addition to the above-mentioned resource, the North Central Farm Management Extension Committee has a website that contains examples of lease agreements for review and these can be found at mwps.iastate.edu/free-lease-forms.
Pasture rental has many factors influencing value. Forage quality, weeds, fencing, water system, shelter, working facilities, size, location, accessibility and soil productivity to name a few.
Besides the factors that relate to the management and economics of animal husbandry, there are important legal aspects. Before entering into an agreement, do some research utilizing the resources posted in this article and have your attorney review your lease agreement before signing. If you need help obtaining the above-mentioned web-based documents, contact your local OSU extension office.
