Tuesday, December 23, 1997

Grazing leases becoming the clear trend in ranching

By J.T. SMITH / Farm Editor

The trend in our part of the world is toward more leased rangeland.

Absentee ownership of ranches and high land costs are making grazing leases more common.

Bruce Carpenter, a Texas A&M Extension livestock specialist, said this will likely continue as more land is conveyed to non-ranching individuals through purchase, inheritance or some other means.

"The trend in ranching, especially in West Texas, is away from ranchers actually owning the land and toward them leasing it," the Fort Stockton-based Carpenter said. "This is not necessarily by choice - but by necessity - since ranch land rarely pays for itself agriculturally in Texas anymore."

Unfortunately, several factors have complicated lease price structure in recent years.

Poor cattle markets, drought, higher labor and the loss of the Wool Act across the state's sheep and goat production area have lowered many lease operators' net returns considerably.

In many cases, a lease won't reflect these industry downturns. The lease remains the same, and the ensuing results vary from abused range to nonpayment, frequent lessee turnover and misunderstandings.

"We are seeing more and more ranches operated by persons who - for whatever reason - choose not to be directly involved in the grazing and livestock production," Carpenter said. "Land investment and recreation are often their primary objectives. Whether they realize it or not, a properly structured grazing lease can be a definite asset that directly benefits land values and recreational quality."

Carpenter said a good leasing arrangement is fair to all parties and will provide long-term maintenance and/or improvement to the range resource.

"The lessee should earn a fair return on his labor, investment and management," Carpenter said. "Likewise, the landowner should expect a fair return on his investment, improvements and risk."

Stocking rate is key consideration

Stocking rate is a crucial component of leases because of its impact on the lesses' profit margin and on the long-term maintenance of the range resource.

"There are many ways to achieve good results here," Dr. Larry White said. "But generally, it's the longer leases - using grazing flexibility - that yield the best results."

The extension range specialist from College Station said that leasing on an animal-unit basis, rather than a per-acre basis, is usually best because it allows more stocking rate flexibility.

"Typically, this means a variable lease price where the landowner assumes some of the livestock enterprise's risk," White said. "He will make money in good years but won't have his range ruined in bad years."

Rangeland Leasing Conference

Speaking of ranches, the Texas Agricultural Extension Service is hosting a special "West Texas Rangeland Conference" on Jan. 6 at the Van Horn Civic Center.

The day-long conference begins with registration at 9 a.m. and concludes with a 1:45-2:30 p.m. panel discussion. Top notch Texas A&M specialists are on the program throughout the day, including Carpenter and White, along with range specialists Dr. Charlie Hart and Dr. Allan McGinty.

Pre-registration is $10. Registration at the door is $15. Fees include the meal. For more, call Extension Agent Pete Walden on weekdays at (915) 283-2059.