LINCOLN, Neb. — Pasture rental rates are predicted to increase by 3.5% in 2023, pegging the third consecutive year of significant rental increases. Establishing fair pasture rates can be a challenge. The most popular method is using “current market rates” based on average county rental rates for each county or region of the state. The USDA National Agricultural Statistics Service provides annual average county pasture values each August. In 2022, Nebraska regional rates ranged from $14 in northwest to $40 in south-central to $89 in the northeast.
The UNL Center for Agricultural Profitability (CAP) also provides updated pasture rental values in the Nebraska Farm Real Estate Market Survey. Values are provided as cash rental rates along with cow-calf pairs and stocker rates. For current rates, visit the Nebraska Farm Real Estate website.
Those in severe drought-impacted regions might consider pricing leases based on grazing animal unit months (AUM’s) or rent per head per month of grazing, rather than flat rates per acre or cow-calf pair. A clause might be added to cover livestock water in case water sources go dry. Typically, pasture weed control is a landlord expense, but if the pasture was overgrazed due to drought, weed control costs might be shared between landowners and tenants.
Finally, stocker or feeder cattle producers might consider a rent per pound of gain method. For example, the tenant might pay 50 to 60 cents to the pasture owner for each animal pound gained during the pasture grazing.
More educational resources such as the new Nebraska Extension Budget sheets are available online at CAP, CropWatch or UNL Beef.
— Extension Educator Todd Whitney, University of Nebraska-Lincoln