With pasture rental rates on the rise, it’s more important than ever to compare per-acre rates to those figured on a per-animal-unit (AU) or other basis, says Ken Olson, South Dakota State University Extension beef specialist.
"There are likely to be cases where cost savings can be found once the rental rates can be compared in similar terms," he says.
Complicating the issue is the fact that an AU is defined as a 1,000-lb cow with or without a calf, but today’s cows weigh more than that.
"We should not assume that a cow is equivalent to an AU,” says Olson. “Bigger cows need more nutrients and therefore additional acreage should be rented for them if they are to receive adequate nutrition to perform well – or run fewer cows on a fixed acreage."
He suggests converting AU to animal-unit equivalent (AUE) by dividing the actual weight of the cattle by 1,000. For example, if the average weight of a producer's cow herd is 1,350 lbs, the AUE is 1.35. If grazing steers are expected to averaged 770 lbs during the summer, their AUE will be 0.77.
The final term to consider is animal unit month (AUM), which is the forage that one AU will consume in a month. Olson says a reasonable figure would be 750 lbs of dry matter, which is 25 lbs per day for 30 days.
"If you have an estimate of herbage produced, and assume that only part of it can be removed without damaging the plants – e.g. 25% – then the appropriate stocking rate in acres per AUM can be calculated that will allow adequate forage to support an AU. Based on the AUE, this can then be converted to acres per animal, or pair in the case of cow-calf pairs."
Using stocking rate (the ratio of animals to acres), a livestock producer can easily convert rent per acre to rent per pair. Once the conversion is made, the rental rate on one unit offered in price per acre can be compared to another offered on a price-per-pair basis.
Another situation where conversion to similar units may be necessary is when an absentee landowner is more comfortable using a per-acre basis and a producer prefers using an AUM basis, or vice versa.
"Being able to quickly convert from one to the other will make negotiations of future rental rates more straightforward," says Olson. "Ultimately, it will help the producer to ensure that the influence of pasture rental on total annual cow costs is managed to the greatest degree possible."