Cover the bases when developing a cover crop grazing lease
As ranchers continue with the struggle to find more grazing land to expand their livestock operations, more are looking into growing cover crops for grazing or renting cover crop land from neighboring farmers.
Greg Rasmussen started planting cover crops on a piece of farm ground north of Boelus, Neb., several years ago, in an effort to stop soil erosion and improve soil health. What he didn’t bargain for was the additional benefits of better yields and higher nutritional value for cattle grazing. In fact, when Rasmussen had his cover crop mixture of sorghum and millet analyzed at one of the laboratories, he was told the mix wasn’t only just good for grazing, but exceptional. Its nutritional value was comparable to high quality alfalfa.
Mike Baker of Thermopolis, Wyo., also found out how much his soil health could improve when he started experimenting with no-till and limited tillage. Within a few years, his corn yields had increased to the point he was overrun with residue. “We were nearing 200 bushel an acre, so we had a lot of corn residue to harvest through the cows,” he said. In the barley stubble, he planted annual forages, like turnips, barley, radishes, peas, collards and a broadleaf each fall. “We don’t have summer range, but we take in cows to graze all this residue. We rent it out by AUMs (animal unit months), and probably provide 500-600 AUMs of grazing each year for our renter. What I like about it is it recycles the nutrients back into the ground, and aids in the no-till the next year without having all that surface residue left over from the prior crop,” he said.
Because the cover crop can be better quality than grass, Rasmussen said he leases it to cattle producers by the day, and bases the cost on pasture prices. “I feel like they are getting a good deal because this is actually better quality than what is in the pasture right now, and the cattle show that coming off of it,” he said.
PENCIL IT OUT
University of Nebraska Extension Educator Jay Parsons said producers may have to pencil out what they consider a fair rental agreement. “I think one of the places to start is with the quality of what you are offering. Do you have something lush and green to offer compared to something that may not be so lush and green? What do you have growing in there, how much is there, and what do you want to graze it with? Are you maintaining cows, cows with calves at side or growing calves? Animal performance ties are a good starting point to structure a lease agreement,” he said.
Because cover crops can differ in quality, there is no “one size fits all.”
“You should structure the agreement to fit your own individual specific situation. It probably won’t be perfect or fair the first time, but you will know you need to do something different the next year,” Parsons said.
Some tips to consider in the lease agreement:
1. Planting the cover crop: Who plants it? How will it be planted, and when will it be planted? What is the latest agreeable planting date? Based on how it is planted, what cost will be attached to its potential effects on the primary crop? What will be planted, what is the species mix, and what is the seeding/planting rate? Who will pay for it?
2. Fencing: Is it available or non-existent? Will it be provided by the land owner, crop producer or livestock grazer? Who is responsible for establishing it, paying for it, maintaining it and moving it?
3. Water: Are water sources present, and if not, who will provide and maintain them? Who will break ice during the winter, and make sure the livestock have access to it?
4. Livestock health and daily care: Who will be responsible for checking the cattle, and putting out salt and mineral? Who is responsible for inventory counts, an emergency feed source, and liability insurance for any potential damage the livestock may cause?
“These are all areas to negotiate between the crop and livestock producer,” Parsons said. “These are also opportunities for the crop producer to provide some service in terms of checking fences daily, making sure the animals are in, and checking the water. It is a way to enhance the income side for crop producers,”
STRUCTURING THE LEASE
The most common way producers rent cover crops for grazing is per head per month, which makes the crop producer assume the risk for low forage production, if the AUMs aren’t there. The livestock grazer is only paying for the actual grazing used, but may have to assume some risk of finding an alternative feed source if the grazing isn’t there.
Some producers also rent on a per acre basis, which allows the cattle owner or livestock producer to assume the risk if there is not sufficient forage available. They are paying a flat fee per acre, and if that acre doesn’t produce what they thought, they are assuming the risk and are stuck with those results. If producers enter into this type of agreement, Parsons said they should establish a latest acceptable planting date, what is actually being produced, and start and end dates to graze that forage. They should also agree on a stocking rate.
Some producers also choose to rent based on gain, if they have growing animals. This type of agreement allows the livestock and crop producer to share the risk and the rewards. “With this type of agreement, I would encourage both parties to spell out the weighing conditions and arrangements in the agreement. They should consider how the gain basis will be determined, in and out dates, and if both parties will share in the risk for forage production and animal performance,” Parsons said.
Parsons reminded producers the same questions need to be specified in the agreement for the termination, especially when it will take place and who will pay for that. “There is also the potential effect on the primary crop that will follow, so that needs to be considered.” he said.
Rasmussen said on his own fields, he likes to take half and leave half. “My goal is to make my soil healthier so it can hold more moisture, and grazing cattle on cover crops helps me accomplish that. The biggest thing you need to remember is you can’t transition overnight. Your soil is like a drug addict. It’s addicted to what you have been feeding it, so if you take it all away, it will react. You can’t completely take away fertilizer and chemicals, or it will be a disaster. But, with time, if you continue with this cover process, bring in some cattle, and be smart about seed costs, the investment isn’t huge. You can get 60-90 days of grazing, and some big soil benefits, so it is a real win-win,” he said. ❖
— Clark is a freelance livestock journalist from western Nebraska. She can be reached by email at firstname.lastname@example.org