Beef cattle on pasture. [Photo by Leann Schleicher.]
Consider These Factors When Writing a Pasture Lease
Pasture leases have some similarities to crop leases, but there are also important differences.
In Iowa, the same law that pertains to cropland leases also applies to pasture leases.
However, unlike crop leases that typically span from March 1 to the last day of February the following year, pasture leases may be written for a shorter period of time.
Charles Brown, a farm management specialist with Iowa State University (ISU) Extension and Outreach, said this process still requires that all leases be terminated by serving a written termination notice at the end of the lease, or the tenant will have the lease for the following year under the same terms as the old lease.
“The termination notice must be a separate document and cannot be part of the lease agreement,” he said. “Also, verbal termination is not recognized in Iowa.”
Brown reminds farmers that it’s always best to have a written lease, as this can eliminate arguments later and improve landlord-tenant communications.
“In the written lease, it should spell out the responsibilities of the landlord and the tenant,” he said. “Who is responsible for maintaining fences, weed control, providing water, paying for utilities, seed, fertilizer, lime, etc.? Is mowing pasture for hay allowed? Who has the hunting rights? These should all be spelled out in the written lease.”
Determining a fair lease amount for a pasture lease can be accomplished in several ways. Although the most popular lease is still a dollar amount per acre, other lease arrangements are possible.
Some other examples are based on a percentage (2%-3%) of the fair market value of the farmland, an amount based on a per-head per-day rental rate based on carrying capacity per animal unit month and rental rate based on rate of gain. These and more are explained further in the Decision Tool C2-23, on the Ag Decision Maker website.
Each May, ISU Extension and Outreach publishes the results of an annual survey on cash rental rates (publication C2-10) with the pasture rental rates listed by crop reporting district.
Read more about the 2023 survey and download the results.
“With the improvement in cow-calf profits, I believe these rates may increase for 2024,” Brown said. “Again, it is always best to have a signed written lease agreement and list all things that landlord and tenant agree to.”
Other rental arrangements can be found on the Ag Decision Maker website, the Iowa Beef Center website and Purdue University’s Center for Commercial Agriculture.
Editor’s note: Charles Brown is an Iowa State University Extension farm management specialist, and Sherry Hoyer is a writer for the Iowa Beef Center and Iowa Pork Industry Center.
