Wednesday, September 6, 2017

“What are lease rates this days?” 
Kari Lewis, MSU Extension - Glacier County

A question we often receive in Extension is, what are going lease rates?  In true Extension fashion, I often respond, ‘Well, it depends.’  While the National Ag Statistics Service does provide both county and statewide per acre lease rates that can serve as a starting point, it’s much more complicated than that.  It’s important that both parties’ costs are accounted for, versus simply charging what you think the neighbor is charging. 
                A “good’ lease outlines both parties’ responsibilities and the timing of those responsibilities.  A good lease includes information on the property and people involved, and clearly states the rates and how they are calculated, the length of the lease, the opportunity to renew the lease, and when lease payments are due.  Leases should always be written, with the terms agreed upon by both parties and input from your lawyer and/or accountant.  A written lease is especially valuable to future generations if either the landowner or tenant dies, or otherwise becomes debilitated.   
                A written lease helps clarify expectations, and ensures that both parties have clearly communicated their expectations.  For example, by definition, one animal unit is one 1,000 lb. cow with a calf at side that is less than 3 months of age.  However, to others, an animal unit may mean any cow/calf pair, with the cow potentially weighing upwards of 1,300 pounds.  A pasture lease can be written on a per acre basis, per head basis, or per AUM basis, and it may be simplest to write the lease based on a per acre basis and within the lease write how many livestock and of what type are allowed. 
                The lease should specify any services that the landowner will provide.  For example, will the landowner repair fences, maintain windbreaks, manage weeds, and maintain the water?  Will the livestock owner or landowner be responsible for checking and treating any sick livestock, paying for medicine, providing salt or mineral, etc.?  According to Jeff Mosley, MSU Extension Range specialist, research has shown that about 30 percent of the average private land pasture lease rate is for services provided by the landowner.  Therefore, if the landowner is not providing any services and is only collecting rent, the pasture lease rate should probably be about 70 percent of the average private land lease rate. 
                In the event that good quality water is not available, will the tenant need to haul water?  If there is drought, fire, or flood and forage quantity is inadequate, is there the option to modify or terminate the lease and lease rate?  Also, does the leasee have the ability to hunt, fish, cut firewood, or recreate on the land? 

                These are just some questions to begin the process of writing a lease.  Fortunately, there are some great tools available to help with the process. is a great website that has links to lease rates by county for cropland and pasture, guides for grazing and beef cattle leases, and more.  Within the website, there is a link to that also provides samples leases and templates for writing leases.  

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