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Cover the bases when developing a cover crop grazing lease

Gayle Smith for Progressive Cattleman Published on 24 February 2017
Cover crop grazing

As record-high grass prices take their time coming down, many livestock producers have been forced to seek out alternative ways of keeping their cattle business in the black.

One alternative producers are taking a second look at is cover crop grazing.

Greg Rasmussen started planting cover crops on a piece of farmground north of Boelus, Nebraska, in an effort to stop soil erosion and improve soil health. What he didn’t bargain for was the additional benefits of better yields and higher nutritional value for grazing cattle.

In fact, when Rasmussen had his cover crop mixture of sorghum and millet analyzed at one of the laboratories, he was told the mix wasn’t only just good for grazing – but exceptional. Its nutritional value was comparable to high-quality alfalfa.

“One of the things about cover crop grazing that I have found important is grazing time,” he explains. “If you wait too long, the quality goes down; it gets tall and stalky, and they will leave a lot behind. I try for more timely grazing and just let them take the tops off so regrowth can occur. It is good for the cattle and for soil health,” he notes.

A good deal on pasture

Because the cover crop can be of better quality than grass, Rasmussen says he leases it to cattle producers by the day and bases the cost on pasture prices. “I feel like they are getting a good deal because this is actually better quality than what is in the pasture right now, and the cattle show that coming off of it,” he says.

Mike Baker of Thermopolis, Wyoming, found out how much his soil health could improve when he started experimenting with no-till and limited tillage. Within a few years, his corn yields had increased to the point he was overrun with residue.

“We are nearing 200 bushel an acre, so we have a lot of corn residue to harvest through the cows,” he explains. In the barley stubble, annual forages like turnips, barley, radishes, peas, collards and a broadleaf are planted in the fall. These fields are sprayed in the spring and planted to corn.

“We don’t have summer range, but we take in cows to graze all this residue. We rent it out by AUMs and probably provide 500 to 600 AUMs of grazing each year for our renter,” he explains. “What I like about it is it recycles the nutrients back into the ground and aids in the no-till the next year without having all that surface residue left over from the prior crop.”

Who assumes the risk?

Because cover crop grazing is a relatively new concept, Jay Parsons with the University of Nebraska says producers may have to pencil out what they consider a fair rental agreement.

“I think one of the places to start is with the quality of what you are offering,” he tells producers. “Do you have something lush and green to offer compared to something that may not be so lush and green? What do you have growing in there, how much is there, and what do you want to graze it with?

Are you maintaining cows, cows with calves at side or growing calves? Animal performance ties are a good starting point to structure a lease agreement,” he states.

Because cover crop lease agreements are considered new ground, Parsons says there is no “one size fits all.”

“You should structure the agreement to fit your own individual specific situation,” he says. “It probably won’t be perfect or fair the first time, but you will know you need to do something different the next year.”

The most common way producers rent cover crops for grazing is per head per month, which makes the crop producer assume the risk for low forage production if the AUMs aren’t there. The livestock grazier is only paying for the actual grazing used but may have to assume some risk of finding an alternative feed source if the grazing isn’t there.

Some producers also rent on a per-acre basis, which allows the cattle owner or livestock producer to assume the risk if there is not sufficient forage available. “They are paying a flat fee per acre, and if that acre doesn’t produce what they thought, they are assuming the risk and are stuck with those results,” Parsons explains.

If producers enter into this type of agreement, Parsons says they should establish a latest acceptable planting date, what is actually being produced and start and end dates to graze that forage. They should also agree on a stocking rate.

“These are details that need to be worked out ahead of time and put in writing so there are no misunderstandings,” he says.

Some producers also choose to rent based on gain if they have growing animals. This type of agreement allows the livestock and crop producer to share the risk and the rewards.

“With this type of agreement, I would encourage both parties to spell out the weighing conditions and arrangements in the agreement,” Parsons emphasizes. “They should consider how the gain basis will be determined, in and out dates, and if both parties will share in the risk for forage production and animal performance,” he says.

“There are a lot of details to work out, but typically the crop producer does it, and leasing is on top of that,” Parsons explains. “If that is the case, it is pretty straightforward. However, in some cases, the crop producer may not be using cover crops, and the livestock producer is trying to talk him into it, so he may not want to be responsible for some of these things in an agreement to be able to graze it,” he explains.

A fair rental agreement

Parsons reminds producers the same questions need to be specified in the agreement for the termination, especially when it will take place and who will pay for that.

“There is also the potential effect on the primary crop that will follow, so that needs to be considered,” he continues.

Of particular importance is stocking rate, how much biomass can be taken and how much should be left. Mary Drewnowski, beef systems specialist with the University of Nebraska, says time of grazing cover crops is a crucial component of how much regrowth will occur.

“If you are grazing it in the fall, you won’t get a lot of regrowth on warm-season grasses like sorghum-sudan, but if there are oats underneath that, they will grow with a little bit of rain,” she says. “If you don’t graze until mid-October, there will be no regrowth, so it would be possible to graze more but still try to maintain adequate ground cover.”

Rasmussen says on his own fields, he likes to take half and leave half. “My goal is to make my soil healthier so it can hold more moisture, and grazing cattle on cover crops helps me accomplish that,” he says.

“The biggest thing you need to remember is you can’t transition overnight,” he tells crop producers. “Your soil is like a drug addict. It’s addicted to what you have been feeding it, so if you take it all away, it will react. You can’t completely take away fertilizer and chemicals, or it will be a disaster.

But, with time, if you continue with this cover process, bring in some cattle and be smart about seed costs, the investment isn’t huge. You can get 60 to 90 days of grazing, and some big soil benefits, so it is a real win-win,” he states.  end mark

PHOTO: Cover crop grazing in the fall can provide cattle with a better-quality feed than native range. Photo by Gayle Smith.

Jay Parsons shares some tips that should be covered in all agreements:

1. Planting the cover crop. Who plants it? How will it be planted, and when will it be planted? What is the latest agreeable planting date? Based on how it is planted, what cost will be attached to its potential effects on the primary crop? What will be planted, what is the species mix, and what is the seeding/planting rate? Who will pay for it? Are EQIP funds being applied for, and who gets those benefits?

2. Fencing. Is it available or non-existent? Will it be provided by the landowner, crop producer or livestock grazier? Who is responsible for establishing it, paying for it, maintaining it and moving it?

3. Water. Are water sources present, and if not, who will provide and maintain them? Who will break ice during the winter and make sure the livestock has access to it?

4. Livestock health and daily care. Who will be responsible for checking the cattle and putting out salt and mineral? Who is responsible for inventory counts, an emergency feed source and liability insurance for any potential damage the livestock may cause?

“These are all areas to negotiate between the crop and livestock producer,” Parsons says. “These are also opportunities for the crop producer to provide some service in terms of checking fences daily, making sure the animals are in and checking the water. It is a way to enhance the income side for crop producers,” he says.