A new year may bring new rental agreements. For farmers leasing pasture, extension educators Bill Halfman and Carolyn Ihde offered the following advice during a University of Wisconsin Division of Extension “Agriculture pricing, leasing, and contracts” webinar.
“There are many considerations to take into account when creating a contract between a renter and a landowner,” Ihde stated. The first, she said, is to set start and stop dates by determining when grazing will begin and when it will end. This is influenced by weather and growth rates of the plants.
Ihde said to also specify what property will be available for use. For example, if there is a wooded area near the pasture, will livestock be allowed access to the trees? In addition, it should be documented if the animals will be overwintering in the pastures or moved to different housing for the nongrowing season.
Setting a fair price is another important part of creating the lease. Halfman said payments could be calculated on a per acre or per head (or animal unit) per month basis. “Both options are reasonable,” he said, noting that leases on a per head per month basis can help minimize overstocking and take into account pasture productivity differences. “All pastures are not created equal,” reminded Halfman.
Also, decide when payment is due. Halfman said some agreements include a down payment with the balance due at the end of the season, but the best payment timing must be determined by the landlord and tenant.
When it comes to fences, Halfman said there is no standardized protocol. He said the landowner could make sure fences are in good repair at the beginning of the lease term and then move responsibility to the tenant to keep them that way through the growing season. In other cases, the landlord may pay for the fencing materials and the tenant may provide the labor. Whatever system is used, fencing is an area that certainly needs to be addressed, Halfman said.
Ihde pointed out the need to identify a source of fresh, clean water. Also, if dry lots or buildings are present on the farm, the lease should state whether they are part of the contract and if they are available for use. The same goes for feedbunks and handling facilities, including a place to load and unload cattle. She also noted that an agreement could specify if the landlord is going to contribute any labor or management to the farming operation; for example, perhaps the land owner will keep an eye on the property if the renter lives further away.
Lastly, both Halfman and Ihde addressed the need to speak with an insurance agent prior to signing the lease. This is to ensure both parties have the necessary coverage in case something unexpected happens.