Getting Started in Ag: Leasing Overview

Leasing is used extensively in today’s production agriculture. If you are new or just starting out in production agriculture, your capital resources may be somewhat limited, especially when it comes to acquiring land, machinery and other capital equipment items.

Leasing or renting can increase your productive capacity without the purchase of additional land or assets. Leasing is most simply defined as when one or more parties agree to pay, in whatever form, one or more parties for the right to use property in an agreed upon manner. This may include leasing farmland for crops, pasture for cattle, or buildings and equipment.

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Types Of Ag Leases

Numerous agricultural leasing options are available. In Wyoming, leases are often used for irrigated farmland, dryland farmland and different types of livestock operations.

It is important to note that there is no one type of lease that works for everyone. When negotiating a lease, it is important to do your homework and identify an agreement that can benefit both parties.

Cash leases are agreements in which the lessee pays a set amount per acre for the use of the property. The lessee or tenant shoulders the bulk of the risk under this arrangement. For example, a lessee might pay $200 per acre to lease irrigated farmland. The lessor or landlord gets paid regardless of the lessee’s crop production.

Visit farmanswers.org and its online library, including resources from the University of Nebraska Center for Agricultural Profitability, for more information about the various kinds of leases and rental arrangements used in production agriculture across the country. The National Agricultural Law Center (nationalaglawcenter.org) is also an excellent resource for learning more about the legal aspects of leasing. Visit RightRisk.org for additional leasing information and tools, including the Forage Risk Analyzer (FRA).

Many factors go into the formulation of the price of a cash lease, including but not limited to, area market rates, return on investment for the landlord, productive capacity of the land, supply and demand of cropland in the area, cost of production, and the ability of potential tenants to pay. As a potential tenant, it is important to gather as much information about these factors as possible to make an informed leasing decision. The USDA Agricultural Marketing Service (AMS) publishes a survey of rental rates for most areas.

Share leases are leases where the landlord and tenant split the costs and revenue associated with production. In this way, the production risk is shared by both parties. Percentages are used to describe the level each party will pay or receive under the agreement. The percentages often vary by area and situation. Share leases are more common in hay operations, with the landlord receiving a percentage of the hay produced. It is important for both parties in these types of arrangements to consider managing their risk, possibly with crop insurance.

Flex or hybrid leases often include features of both share and cash leases. This type of arrangement typically involves setting a minimum cash price per acre, usually lower than a straight cash lease, as well as a sharing agreement when crop prices or revenue pass a certain threshold.

Livestock pasture leases are often stated as a charge on a per Animal Unit Month (AUM) basis, on a per head basis, or on a per acre basis. Much like cropland leases, the amount of risk shouldered by each party depends on the form of agreement settled on.

Leases that are per head, per month distribute at least some of the risk between parties, whereas in a per acre lease the livestock owner carries more risk. Determining the rental rates in your area can be a challenge; utilizing as much market information from USDA and university extension sources can help you make a more informed decision.

Important Agreement Provisions To Consider

First and foremost, it is extremely important to get your lease agreement in writing. A handshake deal is great where a long established trust relationship exists but, especially for new producers, a written agreement is best for everyone involved. While some may consider this a lack of trust, it is the most honorable way to address all of the important provisions of the lease agreement for all parties involved.

A written agreement allows both parties to cover themselves should either one fail to uphold their end of the agreement, while avoiding selective recall of the agreed upon terms. A comprehensive agreement should include, but not be limited to, payment schedules and rates; stocking rates; crops allowed; percentages; division of expenses, including repairs; responsibility for utilities; as well as provisions for dispute resolution and termination.

Maintaining open lines of communication is key to a successful lease agreement. It is important that all parties recognize they are a team of sorts and can benefit each other through a solid lease agreement. Regular communication can address concerns or issues before they become problems on both sides.

Price is not the only factor to consider when entering a leasing arrangement. It may be just as important to build a solid working relationship, regardless of which side of the lease you are on.

A lease agreement based solely on the highest or lowest price often ends badly for everyone involved. A long term approach often provides better security and benefits for all parties. Each side of the agreement brings certain resources and contributions;

FORAGE RISK ANALYZER (FRA) FROM RIGHTRISK.ORG

FRA is designed to help one or multiple parties (up to six) understand the value of everything involved in a potential lease and formulate a fair and equitable agreement.

The tool is divided into six resource categories: land, livestock, housing, stored feed, labor and machinery. FRA contains appendices for nutrient requirements and feedstuff composition for beef cattle and AUM equivalents for various livestock types.

Visit RightRisk.org > Risk Management Tools to get started.

University of Wyoming ecologist discusses death camas and larkspur poisoning

University of Wyoming

(UW) Rangeland Extension Specialist Associate Professor and Rangeland Management Plant-Herbivore Interactions Ecologist Derek Scasta discusses taming death camas and larkspur poisoning, on March 13 and March

22, respectfully, in a series of YouTube videos titled, “Taming Toxic Plants.”

Taming death camas

Death camas is a native perennial bulb which is poisonous to livestock. Scasta notes its appearance is often confused with wild onion as it consists of linear grass-like leaves.

“Death camas is very common in Western rangelands, typically in what we would consider dry foothill ranges, ranging in a variety of soils – anything from sandy soils to rocky soils – and seldom above 8,000 feet,” he says.

Plants are often seen in groups of three, can be anywhere from four to 16 inches tall and have flowers ranging in a white to yellowish color in clusters elevated on the stock above the basal leaves, he explains.

Scasta notes according to the U.S. Department of Agriculture plant database, death camas is most likely present in every Wyoming county, and the species most producers are concerned with are the meadow, mountain, foothill and nuttall’s death camas.

The plant can also be found in Utah, Nevada, Idaho, Montana, the western two-thirds of Colorado and northern New Mexico and Arizona.

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“All classes of livestock can be poisoned,” he says. “This includes sheep, cattle and horses.”

He mentions there have also been cases in which pigs, chickens and even humans have been poisoned.

Death camas, when consumed, releases a toxin called neurotoxic steroidal alkaloids, otherwise known as zygacine. The toxin causes hypotensive activity or lowering of blood pressure. It can also alter sodium ion channels up to 1,000 times slower, thus increasing sodium concentrations levels, leading to increased nerve and muscle excitability.

“In the plant material above ground, the toxin tends to decrease through the season. However, the toxin in the bulbs stays consistently high throughout the year,” says Scasta.

Consumption of death camas is a concern for spring grazing animals. Clinical signs and symptoms may include excessive salivation, bloody frothing, nausea and vomiting.

Other signs can include weakness, staggering, tremors, ataxia, prostration, fast and weak pulse, labored breathing, coma, congestion of lungs and kidneys, minimal necrosis of skeletal and cardia muscle and death within hours to a couple of days.

He explains it doesn’t take a whole lot of plant material to cause problems and kill animals. In sheep, it has been noted a 100pound sheep can be killed by as little as one-half to two pounds of death camas material.

If there is evidence of ingestion of the plant, producers should consult their veterinarian. Two milligrams of atropine sulfate and eight milligrams of picrotoxin per 100 pounds of body weight is reported to be effective in treating early poisoning of sheep, mentions Scasta.

He says supportive therapy with intravenous fluids can also be helpful to combat hypotensive effects, and bloated animals should be kept in a sternal position and a stomach passed to relieve rumen pressure.

“As Wyoming heads into early spring greenup, now is the time to be paying attention,” Scasta mentions.

Larkspur poisoning

Larkspur is a native and naturally growing perennial. As the name implies, the flowers have a pedal spur on the back of the plant. The leaves tend to be deeply lobed with a palmate shape, Scasta explains.

“What is interesting about larkspur is it has also been cultivated for home gardens,” he says. “Sometimes this can cause issues.”

In North America, larkspur is present in the lower 48 states and up through Canada and Alaska. They grow in three different growth/habitat groups –tall larkspurs, low larkspurs and Plains larkspurs.

In Wyoming, larkspur is primarily an issue for cattle and rarely an issue for sheep and horses, but if subjecting animals to sudden physical activity after ingestion may lead to clinical effects.

There are many alkaloids in a larkspur plant, but the two prominent structural types are lycoctonine type and a 7,8-methylenedioxylycoctoine type. There can be regional differences in toxicity for a single species. Scasta explains these are called chemotypes.

He notes location can determine toxicity, and larkspur is a common native species on rangelands. At times, it can be highly palatable and problems occur in areas with high larkspur abundance.

Cattle most often consume larkspur after plants begin flowering, but some specific growth states can cause serious problems.

Consumption can increase in the pod stage. New growth and seed pods contain the highest concentration of toxins. In some parts of the West, low and Plains larkspur may be the only green herbage in early spring.

Like death camas, intoxication is generally an acute issue, as it doesn’t take a lot of plant material or time for animals to be impacted and die suddenly. Affected animals can be nervous, weak and/or stagger around.

Other signs may include muscular twitching, nausea and vomiting, bloat, rapid and irregular pulse and pulmonary congestion. Physical excitement can intensify signs of poisoning.

In terms of diagnosis, producers will want to see if larkspur is present on rangelands before turning livestock out to graze and observe animals frequently for clinical symptoms.

Treatment may include placing an animal on its brisket or chest with its head uphill to reduce bloating and avoid unduly excitement.

Producers will also want to consult with their veterinarian, but the cholinergic drug neostigmine, given at 0.02 milligrams per kilogram has shown to reverse clinical larkspur intoxication in controlled trials with repeated application every two hours.

As far as management, producers will want to consider grazing timing; graze with sheep; utilize alkaloid binding supplements, such as Silent Herder mineral and spray larkspur with herbicides.

Scasta notes herbicide application can sometimes increase alkaloid content.

“If we do spray, we want to wait until it’s completely desiccated and withered away before we graze animals there,” he says. “Although, spraying may not be an option, particularly on public lands and forest allotments.”

In closing, Scasta encourages producers to get in touch with their veterinarian if larkspur poisoning is suspected.

“As we go into spring, we’ve had a lot of snow, and I think there’s a big concern 2023 might be a big larkspur year,” he says.

Brittany Gunn is a corresponding writer for the Wyoming Livestock Roundup. Send comments on this article to roundup@ wylr.net.