With turnout season for cattle nearly here, producers leasing pasture or landowners providing grazing lands are advised to make sure their agreements cover some key issues and are written in order to ensure success, according to the University of Nebraska-Lincoln (UNL).
“Although some people go by a verbal lease or a handshake, things can happen, people can pass away, but if an agreement is in writing, it can cause less friction between parties,” said Anastasia Meyer, ag economist at UNL. “It helps keep expectations clear.”
A well-written lease agreement should include things like the start and end date of the grazing season, it addresses how the agreement can be terminated, when the agreement will be negotiated and when payment is due. In addition, it should cover topics like subleases and if there are any holdover clauses into the next year’s agreement.
Determining other particulars like stocking rates and how to calculate stocking rates can vary, Meyer said.
“The agreement should state if you are stocking by animal unit month (AUM) or the number of head per acre,” Meyer said. “It should also state how the rate is being calculated – if it is per acre, per pair or per month. You want a good stocking rate, so you are not overgrazing and creating long term issues with the pasture.”
While most agreements have an end date, they sometimes do not include if there is an “early in” or “late out” penalty, which may need to be included.
In addition to considerations about overgrazing, both parties need to determine who will address issues like noxious weed control, fencing, and other infrastructure.
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“If the tenant is not controlling noxious weeds, the landowner will be getting a letter from the county,” Meyer noted. “But if the tenant is doing weed control, their lease should come at a reduced rate.”
‘The big 3’
All pasture lease agreements should also address the “big three” of fire, hail, and drought, Meyer related.
“In these situations, where the cattle need to be removed, how much notice will the landowner give the producer? Will the cattle owner get a discounted rate due to the loss of forage?” Meyer said.
Also, if the owner plans to offer recreational use of the land to others or use the land himself for hunting or fishing while cattle are present, it needs to be stated in the agreement.
The issue of liability insurance should also be clear.
“For liability insurance, the cattle owner needs coverage on the cattle and the landowner needs coverage on the land,” Meyer said.
While the needed items in a pasture lease agreement can be overwhelming, Meyer said there are some online resources to help, including pasture lease templates that are available at aglease101/fillableleases.
As with all agreements, Meyer noted, “Good communication goes a long way.”