County Ag News

Setting a pasture rental rate

 

Over the past week there have been inquiries about what a fair rental amount would be for pastureland. There are a number of factors that need to be looked at that will impact the rental rate. There are also a number of different ways to try to establish what that rental amount would be. 

If there is other land in the area that is being rented for pasture there may already be some established area rates. Another measure would be to look at the rent as a rate of return on the land value for the property. This measure probably will not work as a lot of land is sold as recreational land. 

A value of $2,500/acre with a return of 3 percent would calculate to a rental amount of $75 per acre. This would be too much for sandy and stony grazing ground. A third and I think the most equitable way would be to look at the potential value of forage that could be produced on the land. There is a two-page bulletin on “Computing a Pasture Rental Rate” available from Iowa State at: www.extension.iastate.edu/agdm that does a good job of covering the issues of pasture rent.

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