Getting a good deal is critical for both parties when pasture land is up for rent, especially since land in short supply in the Midwest. So says Kevin Gould, Michigan State University (MSU) Extension beef educator.
Pasture values tend to follow corn and cattle prices. But Midwestern livestock producers may keep prices higher than the national average because of high demand, advises Gould.
To help renter and landlord come up with a fair value in 2014, MSU suggests six factors to consider when hashing out an agreement.
- Determine pasture quality and project grazing value, but be sure to build flexibility into the lease.
- Make sure both parties agree on a pricing and payment system.
- Identify who is responsible for regularly checking livestock.
- Decide who will be responsible for potential problems, such as fencing, water or livestock.
- Put the entire agreement in a written contract, complete with signatures.
- Work toward multiple-year leases that benefit for both sides.