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Deciding to rent or pass

Woody Lane, Ph.D., for Progressive Cattle Published on 24 September 2019
Making a decision

At a recent forage group meeting on an Oregon ranch, our discussion focused on the potential rental values of some of the pastures. Back and forth, folks discussed the pros and cons of the fields.

Finally, one rancher said, “No, I wouldn’t rent these fields.” But then across the room, another rancher countered, “Yes, there are definitely some attractive rental options here.”

Whoa! What gives? Both ranchers were shrewd and experienced livestock operators. How can two people arrive at diametrically opposite conclusions about the same property?

This isn’t an arbitrary coin flip. They did indeed consider numerous factors. This is an important topic, because expanding a flock often means acquiring more acreage, and sometimes it’s a better business decision to rent land than buy it. So what factors did those folks consider? Let’s review them here. Who knows? Maybe one day you’ll see a pasture and ask yourself, “Is this an opportunity or an albatross?”

Location

The old real estate adage “Location, Location, Location” definitely applies to pastures. Is the acreage near a road? A main road or a tiny one-lane gravel dead end? Can you get trucks and equipment into the place easily? Is the nearest neighbor another farm down the road or a multidwelling housing unit across the fence? Urban, semiurban, rural or deep in a forest? Are the neighbors a housing tract or a pack of wolves (literally)? And how far is this pasture from your home farm? We are talking here time and diesel. Some folks draw a circle around their home place with a 10-mile radius. Anything beyond that radius they won’t consider. Everyone should determine his or her own radius.

Stock water

Animals need to drink. Where does the water come from: creek, pond, deep-well, rainwater, or a barn trough? How dependable or seasonal? How far must it be delivered? By whom? How far must the animals walk to it? If the only source is a creek, you might need to develop off-stream watering systems for intensive grazing because otherwise your animals will spend their time along the creek rather than in the pasture. There also may be environmental regulations to consider, like salmon runs and who actually owns the water. Does delivering water require an easement across an adjacent property? If so, well, there may be some legal issues there.

Fencing

Ah yes, fencing – one of our favorite pastimes. How good is the perimeter fence? Is there a perimeter fence? Any cross-fences? Are the existing gates in the corners or in the centers of fence runs where it may be nearly impossible to convince animals to pass through them? If the perimeter fence is old, can you install offsets for electric wire along the inside of the fence? Electricity is usually not a problem for fences because we now have good solar and battery-powered fence chargers, but does the field layout or heavy brush make it hard to design electric fencing?

Handling facilities and corrals

Everyone has their own preferences here. But is there any handling equipment on the property? For which species? You’ll definitely need something workable to load animals and possibly to sort and weigh them. I’ve seen permanent corrals built from steel road barriers. They would easily hold enraged bison without a problem, but a flock of determined goats would go through them in a heartbeat. If you own your own portable handling system, good on you!

Barns/sheds

These may or may not be important, depending on your operation. If they exist, are they in good condition, or were the buildings last used by the Confederate Army during the Gettysburg campaign? What about hay storage? Shed roofs are much nicer if they don’t leak. Alternatively, hay can be stored under tarps, at least temporarily, and balage can be stored outside. If there is a barn on the property, is it a trap for pneumonia and scours? How much frustration and work would be caused by a poorly designed barn? But in a larger sense, do you really need to house animals on a rental property far from the home place? Many folks ignore existing structures on rental properties because the designs don’t fit their operations.

Soils

Look at the actual landscape – big picture and technical details. Slope, drainage, fertility, ground cover? What are the soils really like, and what did they grow recently? Any soil tests? How old are they, how deep, and how was the acreage sampled? Numbers can be misleading if the samples were not taken properly. Consider the costs of bringing the soils up to your needs – both fertilizer and limestone. The soil test buffer index will tell you how much limestone is needed. I once saw a soil test on a rental property with a pH of 5.2, a high buffer index, but a phosphorus level of 0 parts per million. Yes, zero ppm! We visited the acreage and only saw a poor stand of thin grass and scrub. The rancher wisely decided to end the lease rather than try to improve the soil.

Forages

What plants are already growing in the pasture? Do you need to add forages or totally renovate? How much would it cost? Or will improved grazing management change things? Is there a good variety of forage species? Or a good variety of recalcitrant weeds? Why are those weeds in the pasture? What about forage density and consistency? If you can identify the existing forages, you’ll know their characteristics – this will help you estimate the forage growth curve on that pasture and its yield potential. Do the current forage species dovetail into the needs of your operation?

Class of livestock

In this case, the rental price may be less relevant if the land doesn’t fit your system. What animals are best suited for the acreage? Pastures which can support dry ewes may not be good for fast-growing lambs or feeder cattle. A property which may beautifully fit a cattleman’s needs may be a disaster for a shepherd, or vice versa. Consider fences, drainage, predators, neighbors. There are huge differences in the needs and adaptabilities of sheep, cattle, goats and horses. The devil is in the details.

Availability of help

By help, I mean nearby, dependable labor – to check livestock when you are not on the property, walk the fencelines (and do some repairs), change irrigation pipe, treat weeds, etc. Interns, college students, high school agriculture classes – these are all variations of young, enthusiastic help. How available are they? What about retired farmers who live nearby or would like on-site living arrangements? Of course, this also depends on the distance from your home place. There may be some innovative options here.

Lease duration

One year? Five years? Ninety-nine years (like the original British lease on Hong Kong)? Lease duration depends on your needs, of course, but it also sets limits on what you can do with a property. You’ll need more than one year to make any soil adjustments or renovate a pasture with perennial forages. Recall that some forages need two to three years to get fully productive. Would planting annual forages be a good option? What is the realistic potential for lease renewals? And realistically, if the property begins to produce more or looks better under your management, will the owner decide to take it back? Is the rental agreement in writing? Really?

Character

This item is, frankly, a bit delicate. You and the landowner need to get along. Character isn’t a 10-point checklist; it’s a judgment call. What can I say about this? Not much, except we all make judgments and choices about personalities. Can the landowner clearly articulate his needs and the rental rates? Is there something else, something indefinable which makes you feel comfortable or makes you hold back? A sixth sense, perhaps, but don’t ignore it, certainly not for a long-term agreement.

Business arrangements really hinge on trust between both parties, on a handshake that really means what it says. There are times when all the factors listed above seem good at a great rental price, but the last item is, well, questionable. Which is why, at the beginning of this article, those two ranchers came to opposite conclusions about the pastures on that farm. It all came down to judgments.

In the group meeting I described in the opening paragraph, one of the members asked, “What is your algorithm for evaluating a pasture’s value?” A good word, algorithm. Dictionaries define it as a formula, a set of rules, a step-by-step procedure for solving a problem.

The problem we want to solve is acreage – deciding to rent or pass.  end mark

ILLUSTRATION: Illustration by Corey Lewis.

Woody Lane, Ph.D., is a livestock nutritionist and forage specialist in Roseburg, Oregon. He operates an independent consulting business and teaches workshops across the U.S. and Canada. His book, From The Feed Trough: Essays and Insights on Livestock Nutrition in a Complex World, is available through Woody Lane.

Woody Lane, Ph.D.
  • Woody Lane, Ph.D.

  • Lane Livestock Services
  • Roseburg, Oregon
  • Email Woody Lane, Ph.D.

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