Considerations On Pasture Rental CostsConsiderations On Pasture Rental Costs
The cost of summer grazing continues to climb. Here are some considerations to think about before renting that pasture.
May 22, 2012
New demands for corn, such as ethanol production and growing export markets, have increased the price of corn, and the repercussion has been increased costs of virtually all other feedstuffs. Through both direct and indirect influences, this has also driven land prices and rental rates up, including range and pasture land. Thus, one of many rapidly escalating portions of rising annual cow costs is the cost to rent grass.
SDSU economists recently released a publication entitled “Agricultural Land Market Trends: 1991-2011.” Rangeland and pasture cash rental rates for 2011 ranged from $7.40 in southwest South Dakota to $69.45/acre in southeast South Dakota. In contrast, when reported on a cost/animal unit month (AUM) basis, the range was much smaller ($19.10 to $44.50). These per-acre rates reflect an 11.2% increase from the previous year.
One concern that these figures present is how to compare rental rates on a per-acre basis to rates calculated on an AUM or per-animal basis. This becomes an issue of knowing the stocking rate so that AUM or animal numbers per acre can be used to compute the acreage required to support the animals. Further complicating this is converting animal numbers to an AUM basis.
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