Source: Saskatchewan Agriculture and Food
Custom grazing is a real opportunity for forage producers to earn some extra revenue, without actually owning cattle.
Saskatchewan Agriculture and Food (SAF) Forage Development Specialist Trevor Lennox sheds light on this increasingly common practice:
“Custom grazing arrangements for livestock make sense when producers have more pastureland than they have cows to graze it. As the amount of land being converted to perennial forages in the province continues to expand, we are likely to see an increase in custom grazing because many producers end up with more forage than they can use for their own livestock. This is where custom grazing can work—where one producer has the land, water and grazing expertise, and another person owns the cattle.”
Custom grazing allows landowners to have a more stable income each year, whereas cattle ownership can have large income fluctuations from one year to another due to market situations.
It is worth keeping in mind that there are business people and individuals who will invest in cattle, and will pay someone else to look after them. For these people, custom grazing is financially attractive.
“Custom grazing activities are generally a business arrangement, governed by a contract that outlines what each party is responsible for,” explains Lennox.
The grazing contract is important. It outlines an agreement between two parties to perform certain functions over a certain time period. Some grazing contracts work on a daily rate, while others operate on a rate/pound of gain.
For an inexperienced custom grazier, Trevor Lennox recommends a daily rate because it guarantees income levels, whereas the rate/pound of gain stipulation is for more experienced graziers who want to generate the most profit from their land.
“In essence, custom grazing minimizes the capital investment required to generate an economic return from land ownership by grazing cattle on contract,” he says. “In many instances, land that is unsuitable for grain production is capable of producing quality forage that can be used to graze cattle and generate a return to the owner. Grazing can also be an important land improvement tool, by maintaining a permanent vegetative cover to recycle nutrients and improve overall soil quality over time.”
Experts like Lennox believe that grazing is more sustainable than making hay.
“Nutrients are returned to the soil in the manure; organic matter is built up over time, and the entire soil ecosystem is regenerated, instead of nutrients being steadily depleted by haying.”
But Lennox warns that contract grazing is not a casual business venture. It requires a thorough knowledge of both pasture and animal husbandry. Parties must agree on who is responsible for the veterinary treatment of sick animals, or the loss of animals. These are important considerations that must be agreed upon initially.
Bear in mind that if you own cattle and intend to enter into a custom grazing agreement with a landowner, it is well worth making sure your animals are healthy. This is why it is preferable that they come from a single source and not directly out of a sale barn.