Tag Archives: leasing

Thoughts on Lease Cropping vs Grazing Your Own Stock

There is something wrong with me that leasing and renting properties never seems to work out.  Even when there is a contract with goals and procedures laid out life, weather, resources change and stuff just doesn’t happen as plan.  But, by and large, my disappointments seem rooted in being too accommodating.  Or maybe it’s a lack of communication though for sure i don’t hold back giving my opinions and expectations – to a fault, i’m afraid.  Nevertheless, things never turn out quite the way i want.

Currently, i’ve leased 120 acres for organic farming for 4 years.  My goals are to eliminate or drastically reduce endophyte infected toxic fescue and build organic matter through the use of cover crops.  I knew going in that my renter has no intention of ever letting cattle graze the cover crops, so i can’t be unhappy about that, yet, the more i see happening and the more i read, it is clear that my soil is lacking due to the removal of animal impact.

Our contract was spelled out and ends after next year’s crop (it was a 4 year deal).  I had hoped that it would be successful and that then we could move forward with working another piece and removing more fescue, but it doesn’t work.

Here are some bullet points i have:

  1. animal impact is essential to making cover crop and soil improvements financially viable as well as building organic matter and tilth.
  2. in a lease situation, the owner doesn’t have the power to make certain that soil is covered.  This past year, the soil did not have anything in it from November until June (except volunteer ragweed growing in the spring) and now that it’s been worked and readied for more soybeans, it still lays open to the sun, wind, and rain with prevented planting.  (it’s now October 2019 and covered with weeds again). Cover crops simply don’t get planted even though that was the written goal.
  3. I knew going in that i was incurring some opportunity costs by leasing vs grazing my own cattle on the property.  I weighed that against the possibility of getting better control of the toxic fescue and giving my friend an opportunity to expand his organic cropping endeavor.  Bottom line, from a purely income/expense perspective, I make more money with grazing vs leasing the property for row cropping.
  4. Lessees do not care for your property as you would.  Trees and brush are growing rapidly in fence rows and untilled portions of the land.  I still do the labor of keeping them under control and since the crop is organic, i must follow the rules of how to manage.  In other words, i can’t chemically treat the plants or stumps if they are within 20 feet of the crop – So they grow and grow.  It will be 7 years from the time i cut brush and treated and the time i regain control of my property.  A lot gets big and away.  More work at the end of the organic regime.
  5. This experiment was worth the pain since i now know that it simply is not the way i would ever do this project again.  I’m especially glad I went with the organic approach despite the stumbling blocks since a conventional farmer would have slathered the soil with toxic chemicals year after year and farmed fence row to fence row and through the waterways.  My friend is careful to leave ample grass strips in waterways and leaves 20 foot buffer from the fences (organic rules).  At the same time this leaves at least 20 acres that is not be utilized for any purpose since he won’t allow grazing at any time.
  6. The weather immediately turned into drought mode for these 3 years and I’m having to downsize my cow herd drastically to accommodate since my acres for grazing is reduced.  Incredibly, this has turned to be a blessing since i’ve culled deeply (after this fall, it will have been about 40%!), no cow gets a second chance and i’ve sold a lot of older cows that i would typically try to ‘get one more calf out of.’  This year’s calf crop is the best I’ve ever had.  Now if only market prices weren’t in the tank.
  7. If i had my own farming equipment and the desire to run it, i think there is opportunity to improve the soil, increase tilth and organic matter, create better wildlife habitat, create another employment opportunity, and increase profit with combined cropping/grazing especially if a value added food crop market is developed.  We actually do have all the equipment, but not the time or energy to develop the plan, work the plan, and market.  The equipment mostly sits in the barn and serves as depreciating assets against income.
  8. At the end of the day,  we do the best we can and then we die.  The hope is to leave a legacy of some sort – be it a physical asset, money, or wisdom.  A friend recently sold his rather large farm he had promoted, taught, enjoyed, and improved with holistic, organic practices for all his life yet it sold to conventional farmers who are likely to plough it all under and row crop until it is degraded. That is sad, but life goes on.

At the end of the day, I’m looking forward to bringing the 120 acres back under my management even though i will only graze it once i get it seeded back down.  With managed grazing and some brush/tree removal, the pasture will be back hopefully making money for me soon.

IMG-6088
You can see the worked field which has now been bare soil since harvest of soybeans last November.  That means 10 months and counting of open, unprotected soil.

What a landowner looks for in a lessee

What A Landowner Looks For in A Lessee

Helpful article in the April 2019 Issue (4) of Progressive Cattleman.

Online article.

 

What a landowner looks for in a lessee

Jenny Pluhar for Progressive Cattleman Published on 25 March 2019
Frank Price (left) and Grant Teplicek

“Is this Jenny?”

“Yes. …”

“This is John Q. Public. I heard you have a ranch available for lease, and I run some cattle. …”

That opening line pretty much guaranteed I was not going to consider that offer to lease. Most likely John Q. had a job in town. He may have been the pharmacist, owned the hardware store or been a schoolteacher. But in my neck of the woods (Texas), “running cattle” is the ultimate sexy, cool, cowboy thing to do.

The mere fact so many think it is easy offends me. That fellow on the other end of the phone hoping to lease from me needs to be managing a complex ecosystem and ensuring sustainability into the future. He is running a business where profitability is closely linked to stewardship of the land. He is not just “running cattle.”

This was not my first rodeo. I have changed lessees for these owners twice before over 24 years. We tend to choose carefully and hope to have long-term relationships. I have been threatened: “I will pay more than John Doe; aren’t you supposed to make the most money possible for the owners?” “You’ll never find someone to go along with all your stipulations.” “If I lease your place, I will decide how to operate it.” “Give me the owner’s number; I will tell him I will pay more.”

Nope, yep and nope. By all means, call the owner. He will hang up on you, guaranteed. My goal was to find the right lessee, someone who wanted to manage that complex ecosystem, strive for sustainability, make a profit. The happy ending is: Although I received the above-mentioned phone call probably a hundred times, I had four outstanding candidates to lease the ranch, and another four queued up if the first four opted out.

Serious about stewardship

What to look for in a lessee? How to find the guy or gal who can manage a complex ecosystem and steward the rangeland resource while still making a profitable living for their family? Face it, if we don’t take profitability into account, the goal of stewardship becomes just another buzzword.

Of the calls I received, only one was actually a credible possibility – and only because I had lost touch with the young man. I knew and respected him but was out-of-date on his progression in the ranching industry. The viable candidates were people I contacted, folks I knew from field days, ranch tours, word-of-mouth. I knew them to be serious about stewardship, profitable, eager to learn and progressive-type operators. I had observed them in action, often at Texas Grazing Land Coalition activities, Texas and Southwestern Cattle Raisers School for Successful Cattlemen, local workshops.

My initial concern was that none of them would want to consider this property. It is remote and, frankly, was beat up – continuously grazed, overstocked, infrastructure needing attention, definitely a ranch in rehab. Lucky for me, I had four respectable land stewards who were interested.

After a bad experience with past lessees, the owners and I were determined to make a good selection. We were in no hurry, which was key to a successful process.

I spent a day on the ranch with each potential lessee. We climbed on the side-by-side and attempted to see as much as possible. Thirty-thousand acres is a lot of ground to cover, but I wanted them to see the good, the bad and the ugly. And I wanted to gauge their goals. The owners and I have some specific goals, focusing primarily on improving rangeland conditions.

It is a mighty challenge, and I needed to know if the candidates were up to the task and aware of the degradation of the resources. Those hours on the ATV allowed me to quickly assess their mettle. Did they know the plants? Did they know how much water a cow-calf pair or a stocker needed daily? Were they savvy on stocking rates, animal unit equivalents, grazable acres and harvest efficiency?

Then I turned the tables. I asked to see country each candidate leased – in my book, that’s the “résumé” of a rancher. What does the place you operate look like? So I spent a corresponding day with each of them, riding around, looking closely at how they conducted business.

Following the days on the ranch, I asked each to tell me what they saw. I developed a few questions. What did they see as the shortcomings of the ranch? And how would they overcome those obstacles? What about the advantages? How would we collaborate, communicate? How would they handle the necessary labor?

Why would we care about the labor? The ranch is remote. School is nearly a 50-mile bus ride away with the potential for the ability to transfer to the school district only 20 miles away. Sadly, substance abuse is a real problem among ranch cowboys in the Texas Panhandle. This location is not for everybody. Leasing this ranch and putting someone out there with a young family or a fast crowd of friends is not going to get the job done. “Cowboys” who have limited skill sets and want to drive around or spend aimless time horseback are a dime a dozen. We recognize the need for the labor to be able to manage the resource, not just cake the cattle in the winter and ride a horse all summer.

Up for a challenge

By now you are thinking, “Man, she put these potential lessees through a bunch of hoops just to ‘run some cattle’.” It was exciting to find four candidates who found the opportunity to improve the conditions, something that excited and challenged them. They provided potential solutions to our challenges, grazing and monitoring plans, communication plans and really showed off their eagerness and enthusiasm. Anyone who says there are not young, enthusiastic ranchers wanting a chance to get started or expand in the business hasn’t looked around very hard.

Finally, the owners and I interviewed them together. That face-to-face meeting is important. It also allowed the potential lessees to gauge if they wanted to enter into a challenging ranch rehab and do business with the owners. These things go both ways. Our extensive process allowed for plenty of time for both sides to assess the situation and evaluate the potential.

The best advice for folks looking to lease land is really pretty simple. Think of it as a job interview. What do you bring to the table? How will you work with the landowner? Plan to forge a relationship, stewarding the land for the good of the owner and your own profitability. If you are just looking to “run some cattle,” put that phone down and go look for something else to do.

Ranching is the management of a complex ecosystem, grazing animals all with the goal of economic and environmental sustainability. It’s not rocket science. Literally. It’s way more complicated.  end mark

PHOTO: Frank Price (left) of Sterling City, Texas, explains the improving forage conditions on a lease property to Grant Teplicek of USDA-NRCS. Photo provided by Jenny Pluhar. 

Jenny Pluhar