going rate per day that we could charge for grazing cow/calf pairs

[joedales]

Can anyone help me answer this question that was sent in to www.topmanagers.ca. It is a specialized question and I thought maybe someone could help. Sincerely, Sandy Dales sandadales@rogers.com www.topmanagers.ca

"Hello I operate a 1500 acre ranch with about 900 acres of pasture, the ranch is located in the Robson Valley BC. I would like to know what the going rate per day that we could charge for grazing cow/calf pairs in the summer months would typically be in Alberta and BC.We provide a full care survice which includes fence repair, pasture rotation, daily monitoring and good stock yard facilities for handling cattle. Thank you very much for any information that you would be able to provide."

[SASKFARMER3]

OUr DPC for HRS is 7.65 after freight still not the $8.40 thats in the USA but if it gets to $8.00 ours is gone!

[SASKFARMER3]

First time ever if it happens that we will get over $120,000 for spring wheat first 25% call.
So even with the rest of the crop priced using the PRO $7.95- 1.70 EQUALS $6.25 at 75% of crop and $8.00 at rest $6.68 still a full $1.31 bellow the real market price on HRS. SOME ONE IS SKIMMING REALLY BIG!
Farmers start asking questions, Also why is Eastern Politicians and Labour unions so set on keeping the CWB. JOBS JOBS JOBS and not FARMERS INTEREST>

[grassfarmer]

It will be interesting to see how the rental pasture market turns out. With a downsizing of the cow herd there should be less seeking pasture but at the same time guys might run more yearlings before sending them to the feedlots. Also how much pasture/hayland will the plow jockeys tear up in their pursuit of more barley acres?
We are talking to a guy about rental pasture just now - he reckons he still deserves $1/day per pair for it but I reckon he will need to take a fair bit less than that. With hay prices where they are we would be cheaper feeding the cows at home for an extra couple of months in the fall and we would benefit from the additional fertility added on to our own place. Haulage is becoming a bigger issue on rental pasture too - the cheapest grazing areas are often too far to haul cows to to be economic.

[farmers_son]

A family member rented out 320 acres pasture for $28 per cow calf pair per month this summer and well into the fall. This is number three soil, thin black on the west side of the Hwy 2 corridor. The owner of the cattle, the renter, did all the supervision, fencing and arranged for hog manure to be spread on part of the pasture at no cost to the land owner (that was probably a one time thing). In this case the pasture was within a few miles of the renter's home operation which I am sure makes a difference.

What will the land owner get for pasture rent in 2008? Since most of this pasture land was farmed in the past and given the present and expected price of grain if the land owner cannot get the same rent as they did in 2007 they will likely rent the land to a grain producer to be broken and grain farmed. The grass is getting old and needs to have something done with it anyway.

There would be no way that the land owners would rent the pasture out at a reduced rate. For this land to stay in pasture the renter may have to pay more, not less. It could generate about 50% more rent if broke and grain farmed with no production risk for the landowner like there is renting pasture on a per head basis.

[grassfarmer]

What rental rates for grain growing are you basing this on farmers_son? At the grain rental rates/acre I've seen mentioned on this forum before pasture could be a better option if it was managed at all. Maybe I'm out of touch with the rent grain farmers are prepared to pay.

[farmers_son]

Pasture rent on that land amounted to about $40 per acre this year which was an excellent pasture year. This land could grow a 60-80 bushel barley crop quite easily, perhaps 100 bu. with lots of inputs. It would seem likely that cash rent for grain in that area would easily be over and above $40 per acre and there is no production risk like when you are renting grass.

I recall earlier this year I put up some calculations on pasture rent that showed high producing pasture would return more than grain. That thread seems to be gone. Obviously the key is in the productivity of the pasture and grain rents.

People will certainly consider breaking farmable land before taking a cut in revenue if they cannot get what they were getting in past years for pasture rent. The resulting reduction in pasture acres would then create scarcity, underpinning rental rates on the remaining pasture. Pasture to rent may be a hard thing to find, if not this year then next.

[grassfarmer]

Thank you f_s for that reply - I seem to remember Cowman quoting as high as $60 an acre rent in his area.
My frustration as a potential renter of pasture comes down to the difficulty of dealing with old fashioned thinking of the landowners. They are generally the same type of guys that sell their hay by the bale and refuse to deal by weight or consider feed analysis.
If I ask a person about pasture and they want $1 a day/per pair for it, I suggest a different way to look at it. I am prepared to spend the time, effort and materials managing their pasture more intensively to increase it's production but I want some return for my efforts. As an example if a guy has a pasture that produces 40AUDs per acre on conventional management I reckon I could harvest 50% more off it by managing it in a year with similar rainfall - and still leave it in better condition. Give me 10 years at it and I could probably double production and again still leave it in better condition. I reckon that if I can improve the land and pasture that much I should get the additional production at a discount, say pay $1 a day for the first 40AUDs and 50c/day for additional AUDs. That would earn the landowner $50 an acre in year one versus $40 under his current set up and potentially $60/acre at the 10 year stage. All at no cost or effort to the landowner, it gives me the incentive to manage the land well and I'd be quite prepared to have an independent grass specialist monitor the pasture to assure the landowner it was improving if their own knowledge of grass did not give them confidence to make that assessment themselves. Of course 10 years is long term and we would have to increase rates to allow for inflation - I would willingly do that which would result in higher returns for the landowner.

Thus far I have had no success with this approach, the $1 a day figure is all they are interested in. I can work with that system too but it is a bad deal for the landowner because it is bad for the land. I could turn a bunch of cows into a quarter section with a dugout in the corner and graze it into the dirt and my cows would come home in better condition - those tiny regrowth shoots are real high quality feed. The problem is the land would produce less AUDs per acre every year so the landowners income and land resource would be depleting every year.
They just can't see it though.

[rkaiser]

Just to take your idea one step further grassfarmer; I have been offering the owners of our lease pastures flat rates based on averages in the area and then using those management techniques you talk of to my own advantage.

It doesn't take much to role out some electric fence or make use of some old fence on one of the 1/4's that a bit of power can put back in to use. Here in West Central Alberta we can rejuvinate pastures, to a certain extent, within one season and certainly make some headway on a two year lease.

[grassfarmer]

You mean like paying them $40 an acre because they "sold" 40 AUDs per acre last year at $1 a time? Then I might get 60Auds for the price of 40? That would work from my point of view but they would still want $1 a day for every AUD harvested, maybe I'm talking to the wrong guys?

[smcgrath76]

GF,
One approach we have used is paying the going rate for a few years and establishing a good relationship and then negotiating to an average of the previous 3 years.
So let's say $1 per day and if we pay on average say $3000 per year for three years for a piece of land, then negotiating that as the average.
Selling points are, it allows for a safe/guaranteed income regardless of drought, it allows us to rest the land for an extended period if required (securing future earning potential), and it allows us both to budget.

[farmers_son]

Can you make money paying the going rate? Given the price of calves has dropped in the last year by more than would typically be paid for a summers grazing for a cow calf pair it would seem that either it was very profitable to rent pasture in previous years or pasture would be rented in 2008 for some reason other than profit.

[smcgrath76]

The going rate is negotiable in my world. We often offer other non cash incentives such as stewardship, ploughing a yard out in the winter, etc.
Once the land is converted into a $/acre type scenario and management is well done, then I think you can make money.
For myself, if cows could not make money I think it would be time to quit.

[sagewood]

Interesting topic for sure. I did rent my native pasture once or twice to neighbors who had no grass and I had extra grass and found that the extra work was a nighmare from the fact that bulls had to be managed differently; the renters expected me to maintain the fences that their bulls used a rubbing posts; they did not use fly control and I was expected to supply mineral and salt and treat sick animals all for the princely sum of $30/cow/calf pair. So from my point of view, renting a pasture needs to bring at least $1.00/day per unit because it is usually the land owner who winds up fixing fence, treating sick animals, making sure the water supply is solid and still moving the cattle on rotation to protect the grass and not let it get grazed down to 'dirt'. That is assuming that one cares about the grass--and for sure--I do care about my native grass.

I thought that renting might be a good way to go in my 'golden' years, but I still find that it is easier to manage my own herd, even if it means winter feeding, bedding, calving etc. etc. I keep hoping that one day I will win the lottery and then I can just let the deer, coyotes, grassland birds and the odd moose family hang out and enjoy the habitat. Dream on, right?

[smcgrath76]

It is too bad that you had such a negative experience with renting. I know in our situation, rental ground is very hard to find, so we do a lot of extras. We maintain and in some cases build fences, we plan seasonal use for native rangeland, we check cows, we provide mineral, we fix corrals, we plough yards in the winter, etc.
We have a great arrangement with our leases, and really work to communicate how what we are doing improves their landbase. They can also see the improvement just driving by.
I think in large part renting is like anything else, the hardest part is finding the right renter. This is also what landlords I know tell me. The wrong renter can be a pretty expensive proposition.