Establishing a Starting Point for Land Rent Price
Pasture rent – 3 Basic Methods:
1. As a general rule of thumb pasture rent is approximately 50-70% of crop land. High quality pasture fences and water access would demand 70%, where average to poor quality pasture would only command 50% the value of crop land.
2. Pasture rents can also be determined on a per head basis which usually runs any where from $8-$20 per animal unit per month. An animal unit is considered 1000 pounds of animal. However, horses are usually figured at 150% because of the impact they have on pastures. For example, a large 1000 lb horse is equal to 1.5 animal units.
3. The third way to determine pasture rent is on pounds of gain. This usually runs at a rate of $.25 – $.75 per pound.
NOTE: As per the USDA National Agricultural Statistics Service the average Cash Rent for non-irrigated cropland was $105 per acre in 2014 and pasture rent was $20.00 per acre in 2014.
RELATED LINKS OF INTEREST
Free Lease Agreements (Midwest Plan Service)