Running numbers

I am crunching numbers for the ranch this week, trying to figure out what to expect for a return this year. It's kinda tight compared in a few years ago of course. I pulled out a pasture lease from 5 years ago. My grass rent was 20% cheaper back then, but calf prices were not a whole lot different than today. I'm wondering if grass rents will come down at all.

My lease is up at the end of this year, and if prices don't turn around we might have to do a little negotiating. Not that mine is outrageous. I have heard of some much higher rents than mine in the area. I can't imagine those guys are making any money at all.

I'd like to have some kind of formula based on calf prices to determine rent. It would be nice for me, maybe not as great for the landowner though. Has anyone used something like that? How did it work?

On my Wyoming Ranch Tools website www.uwyoextension.org/ranchtools I developed a calculator based on calf prices and expected gain. The calculator can work for either stockers or pairs. It at leasts gives you a good starting point in the negotiation process. The calculator is the AUM Value tool on my website.

I am happy to take constructive suggestions as well. If you see a calculator on my site that could be improved, or you would like to see some additional calculators just shoot me an email using the contact info provided on the website.

master stockman said:

On my Wyoming Ranch Tools website http://www.uwyoextension.org/ranchtools I developed a calculator based on calf prices and expected gain. The calculator can work for either stockers or pairs. It at leasts gives you a good starting point in the negotiation process. The calculator is the AUM Value tool on my website.

I am happy to take constructive suggestions as well. If you see a calculator on my site that could be improved, or you would like to see some additional calculators just shoot me an email using the contact info provided on the website.

Click to expand...

The 50% and 33% values are highlighted, does that mean those are the values that most often are a "fair" value per AUM?

How is the AUM per pair number calculated? I put in 1400 lb cows and it came out 1.25 AUM per pair. I always thought 1400 lb cows were 1.4 AUM. Sure makes the margins better if they are 1.25 though.

I don't necessarily think pasture rent will come down much if any. I know it depends on your landlord relationship but most of us will have to find the fat some where else or let the pasture go. Plenty of grazers looking for grass as too much has been farmed over the last ten years.

Here rents keep going up even as cow numbers and calf prices are going down. We have a couple of rental agreements and we try to rent on a per acre basis. That way, better management increases the number of cow days and reduces the cost per day. Advantage for the owner is they get a guaranteed income and better grass management, advantage for us is that we get a guaranteed annual cost and we can manage to increase cow days. The way we sorted this out was to approach the owner and work out a deal where they were paid the same amount they were paid by the previous renter the year before as a starting point, with all the money up front. Any ground that can be cultivated around here is rented out at crazy prices, so we have had to be a bit creative.

I've got some at 50 cents per pair per day and the latest is a 60 head deal at a $1.00 but its 86 miles away from the corrals or 72 from the house.