Farm Transitions: Valuing Sustainable Practices—Grazing Income

Income from grazing varies widely depending on the productivity of the land, the condition of the pasture, and the grazing season. This example draws from two specific sample leases from south-central Wisconsin (1,2). The dollar figures used fall within ranges reported for custom grazing of cattle in Wisconsin and Iowa (3).

Assumptions for this example:

  • The $/head/day amount includes the cost of the land lease plus the grazing management. In other words, this is an example where a landowner does custom grazing of another person’s cattle.
  • The stocking rate is a season-long average. Some graziers stock at a higher rate in the spring and reduce the rate as forage production declines in the fall. Drought results in earlier and larger reduction in the stocking rate.
  • Rotational grazing is used.
  • Pasture is an upland grass and clover mixture with no fertilizer applied.

Stocking rate permitted (1) = 0.625 AU/acre (AU=Animal Unit = 1000 lbs. of cow)

Contract for custom-grazing dairy heifers (2):

  • 230 animals, average weight of 600 lbs. = 138,000 lbs. = 138 AU
  • 138 AU / 0.625 AU/acre stocking rate = 220 acres
  • Contract grazing rate: $1.37/animal/day (1) x 230 animals = $315.10/animal/day
  • Days of grazing: approximately 180 days (mid-April through mid-October) (2)
  • Total payment due under contract: $315.10/day x 180 days = $56,718
  • Payment per acre: $56,718/220 acres = $258/acre (round: $260/acre)

Note: The $260/acre is a gross income figure. The landowner doing the custom grazing has costs for labor and management time, perimeter fence maintenance, a watering system, mineral supplements, and fencing supplies for temporary fence.

References:

(1) Contract for grazing on 320 acres, livestock managed by livestock owner. 2013. Midwest Perennial Forage Working Group. http://greenlandsbluewaters.net/Perennial_Forage/sample_contracts_leases.html

(2) Contract for custom grazing of dairy heifers, livestock managed by landowner. 2013. Midwest Perennial Forage Working Group. http://greenlandsbluewaters.net/Perennial_Forage/sample_contracts_leases.html

(3) Rates Charged for Contract Grazing Arrangements. 2013. Midwest Perennial Forage Working Group. http://greenlandsbluewaters.net/Perennial_Forage/CG_Rates_final_0313.pdf