Grazing Contracts for Livestock

1. Grazing Contracts
for Livestock
A Publication of ATTRA—National Sustainable Agriculture Information Service • 1-800-346-9140 • www.attra.ncat.org
By Tim Johnson
Grazing livestock for other farmers is a way to make a land investment return additional dollars to the
NCAT Agriculture
land owner. It requires knowledge of livestock, but more importantly, knowledge of how to make money
Specialist
from grass. This publication discusses some of the issues involved with contract grazing, including
January 2005
various classes of livestock, equipment, sample contracts, some of the economics to consider and other
Updated 2010 resources available on the subject.
by Hannah Sharp
NCAT Intern and
Lee Rinehart
NCAT Agriculture
Introduction
Specialist
O
wning and working the
© 2010 NCAT land is one of the great
dreams for many Ameri-
cans. To know that the ground
Contents
under your feet belongs to you and
Introduction ..................... 1 your family — to walk on it, play
Forage and pasture on it, plant grass on it, raise kids
resources ........................... 3
and cows on it — is one of life’s
Classes of livestock to
graze .................................. 4
joys. Land ownership gives a sense
Equipment ....................... 6
of stability and permanence rarely
found with anything else in life.
Contracts .......................... 8
What to do with the land once you
Economic projections
and budgets ..................... 9 own it is where things begin to get
References ..................... 10
complicated.
Photo courtesy of NRCS.
Further resources ......... 10 In many cases, owners want to find
an opportunity that will generate the greatest else to do with their land, so they think
return on their investment. But what oppor- they want to be cattle producers. This
tunities are these owners willing to capitalize publication describes how to minimize
on, and what expertise do they possess that the capital investment required to generate
could provide that critical input to make the an economic return from land owner-
project a success? What opportunities are ship by grazing cattle on contract. For
there that are sustainable — opportunities to some landowners, a return large enough to
improve and coexist with the land? In some pay the property taxes is often sufficient,
cases, owners just want to make enough to off ering a cattle grazier the opportunity
pay the overhead associated with owner- to rent very affordable pasture during the
ship. Others want to actually make a living growing season.
ATTRA—National Sustainable and support a family from their investment.
Agriculture Information Service Could you possibly contract graze either
(www.attra.ncat.org) is managed Whatever the goal, one must always evalu-
rented or leased pasture to generate a return
by the National Center for Appro- ate any potential opportunity thoroughly
priate Technology (NCAT) and is with very little or no capital investment?
funded under a grant from the and make sure that the desired outcome is
In his book No Risk Ranching: Custom
United States Department of sustainable and realistic.
Agriculture’s Rural Business- Grazing on Leased Land, Greg Judy describes
Cooperative Service. Visit the
NCAT Web site (www.ncat.org/
An executive in the cattle industry once his method of utilizing rented, leased or
sarc_current.php) for said that cattle ownership is a by-product bartered land to make money raising cattle
more information on
our sustainable agri-
of land ownership. That is to say that cows on contract. See the Further resources section
culture projects. are there because folks don’t know what for information on ordering this book.

2. While this publication focuses primarily on may be convincing the livestock owner that
the contract grazier, many of the ideas dis- you can properly manage both the land and
cussed are equally useful to the livestock the animals, especially if you have no experi-
Related ATTRA owner, especially regarding what he or she ence in contract grazing. The first few years
Publications may be the most difficult, until you have
should look for in a grazing operation to
Sustainable Pasture meet the needs of the livestock. demonstrated some success. One sugges-
Management tion is to start small and ensure success with
Nutrient Cycling Contract grazing is not a casual enterprise. It fewer animals and more acres than you think
in Pastures requires a thorough knowledge of both pas- you need. It is better to get a smaller return
Assessing the Pasture
ture and animal husbandry. For instance, with limited grazing than to overgraze and
Soil Resource continuous mob grazing of an extra parcel have to purchase additional feed. Building
of land may not result in the weight gains a history of the land’s actual production
Rotational Grazing
expected on stocker cattle or dairy heifers, capabilities, along with some personal
Paddock Design, and continuous grazing often results in prob-
Fencing and Water experience, will allow you to fine tune the
lems with persistence of forage and erosion system as you gain the knowledge necessary
Systems for
Controlled Grazing in environmentally sensitive areas. Contract for successful grazing.
grazing requires some management skills on
Managed Grazing
in Riparian Areas
the grazier’s part to get the results that live-
stock owners will expect. Typically, the cus- Ideas for developing a stocker or
Dairy Resource List: grazing business:
tom grazier is expected to achieve what the
Organic and The success of your business depends on
Pasture-Based livestock owner can’t achieve at home due to
identifying and developing these resources:
resource or management limitations. Any-
Raising Dairy Heifers relatively inexpensive feed resources, cattle
on Pasture
one considering contract grazing should have stockmanship, financial and grazing expertise
several years of grazing experience and good and personal relationships.
Cattle Production:
stockmanship skills prior to engaging in any
Considerations for Conduct honest business. Build partnerships
Pasture-Based Beef
legally binding arrangement.
with honest individuals.
and Dairy Producers Most custom grazing is done with stocker Partnerships allow you to run more livestock
Ruminant Nutrition cattle, taking weaned calves at about 500 for longer portions of the year, thereby spread-
for Graziers pounds and grazing them up to 800 pounds, ing input costs over more pounds of grass or
Grazing Networks for when they would typically be placed in feed gain and allowing you to sell and buy
Livestock Producers a feedlot. For example, the wheat fields in closer to the same market.
Multispecies Grazing Kansas, Oklahoma and Texas support large Grazing or feeding partnerships must be
Pasture, Rangeland numbers of contracted stockers for seasonal developed and nurtured so that all parties
and Grazing grazing. The value of annual wheat grain involved benefit.
Management production in Oklahoma is estimated at We are not talking about a get-rich-quick
Solar-powered $318 million, second in value of all com- scheme or a series of business deals. We are
Livestock Watering modities produced in the state. The value of talking about a solid, enjoyable approach
Systems wheat pasture for cattle production is esti- to making a living on a farm or ranch in the
mated at $1.2 billion, almost four times livestock business.
Organic Livestock
Feed Suppliers more than the value of the grain alone (Doye Source: Cates, 2000
Agricultural Business and Krenzer, 1989). In many instances, land
Planning Templates that is unsuitable for row-crop production is
and Resources capable of producing quality forage that can The following are key points to consider
The Economics be used to graze cattle and generate a return before entering into a contract-grazing
of Grass-based to the owner. Grazing may also improve the arrangement:
Dairying quality of the land by maintaining a perma- • Forage and pasture resources: What
nent vegetative cover to recycle nutrients and is the quality of the forage base? What
improve soil quality over time. kind of grazing system will you use?
If you are interested in contracting with a • Class of livestock: Will you graze
livestock owner to graze animals on your stocker steers, replacement females or
land, the most difficult part of the process cow-calf pairs?
Page 2 ATTRA Grazing Contracts for Livestock

3. • Equipment and facilities: What is will be available during different times of the
available and what will you need to year. Some producers also interseed annual
purchase or barter? grasses at the proper time of year to supply
• Contracts for grazing: What is the additional high-quality feed. In many cases,
basis of your contract? Dollars for a few paddocks planted with annual grasses
pound of gain? Dollars for animal unit and legumes can make the difference between
month (AUM)? simply surviving the summer slump and
maintaining weight gain at the desired rate.
• Economics of contracting: Use of
budgets to plan and evaluate new Pastures should also be rested to maintain
enterprises. forage quantity and quality. Most pasture
forages do not persist or perform well under
• Resources and information: ATTRA
continuous grazing. In some situations, the
publications available at www.attra.
rest period may be only a few weeks in an
ncat.org/livestock.
intensively grazed, multi-paddock system
where animals are moved regularly. Other
Forage and pasture resources situations may involve resting pastures for
Having a continuous supply of quality for- a year or more, where native rangeland is
H
age is crucial to success in contract graz- aving a
grazed and moisture is limited. Maintain-
ing. In many cases, to optimize the available ing the appropriate forage cover will reduce continuous
resources, some type of managed grazing sys- weed pressure, lessen erosion and improve supply of
tem — managed intensive grazing (MIG) or drought resistance. quality forage is
controlled grazing, depending on the termi-
Some producers are reluctant to adopt new crucial to success in
nology you want to use — will be needed to
ensure that forage quality and quantity can systems or make changes to their current contract grazing.
be maintained throughout the growing sea- continuous grazing practices. They cite inad-
son. Regional differences will dictate what equate returns, increased risk and the diffi-
forages are appropriate for the different sea- culty of assessing the efficiency of improved
sons and environments. In many cases, local pasture management as deterrents to the
assistance with forage selection and pasture adoption of more intensively-managed sys-
improvement is available from the Coop- tems. A Canadian study, however, found
erative Extension System or the Natural that when grazing systems were evaluated
Resources Conservation Service (NRCS). for total efficiency and net returns, a six-day,
high-stocking-rate system was the best of
those studied (Phillip et al., 2001).
NRCS and Cooperative Extension phone
numbers can be obtained in the federal and The researchers evaluated beef cow-
county government sections, respectively, of calf pairs grazed under three different
your local telephone directory. Also, you can rotational frequencies: two-day, six-day
access local NRCS and Extension directories
on the following Web sites:
or continuous; and three different stock-
ing rates: 1.23, 1.77 and 2.22 acres for a
Natural Resources Conservation Service – cow-calf pair. While animal performance
http://offices.sc.egov.usda.gov/locator/ showed little benefit from intensive grazing,
app?agency=nrcs
the efficiency of land use and total economic
Cooperative Extension System – www.csrees. performance was significantly improved.
usda.gov/Extension/index.html On a 100-acre farm, even considering the
additional labor and fencing, the six-day,
You should diversify your forage base, real- high-stocking-rate grazing system returned
$10,000 more than a continuous system.
izing that different forage varieties fill a wide
range of environmental niches or microcli- Perhaps the most interesting finding of
mates on the farm. A diverse forage base the report was that the use of a managed,
will also help ensure that seasonal impacts intensively grazed system reduced overall
on the pastures are minimal and that forage variability of net returns by 51 percent. In
www.attra.ncat.org ATTRA Page 3

4. addition, the managed systems showed a higher cull cows around to serve as trainer animals
likelihood of generating a positive return when for the new calves. Most producers have
compared to the continuous grazing system in found that small corrals close to the barn,
this particular study. Teegerstrom et al. (1997) with solid fences and several offset hot wires,
reported that when measures of economic opti- work well in training cattle to electric fences
mization are applied, contract grazing is more without the risk of escape. See the Fencing
likely to generate positive returns than owning segment under the Equipment section below
stockers, which in turn generated better returns for more discussion on training pens.
than cow-calf operations. This was because
there was less variation in profitability from An important consideration for younger ani-
year to year. Contract grazing in this study mals is the quality of their forage. Typically,
had the most stable profits over time, while contracts for this class of animal are based
cow-calf operations had wide swings from on the weight they gain during the graz-
year to year. ing period, and higher-quality forage should
make for better weight gain. Improving pas-
tures and seeding annuals are important for
Classes of livestock to graze ensuring that the nutritional needs of young,
Once you decide that you want to graze ani- growing animals are met. In some instances,
mals for someone else, one of the biggest depending on your location and situation,
questions is: What types of animals are you supplemental energy may also be included
interested in working with? There are many to enhance conversion and utilization of
options that depend on your facilities, your high-quality pasture, since in good pastures,
expertise and your willingness to work. adequate protein is rarely lacking. Especially
in cool-season pastures, the energy-protein
Stocker or background calves balance for efficient conversion is often tilted
Probably the easiest grazers in terms of too far toward the protein side of the equa-
workload are stocker or background calves. tion, and supplemental energy can often
In many cases a load of calves will be deliv- improve overall gains and profitability. Be
ered for a set period of grazing, after which sure to assess your situation accurately so
they are picked up and continue on to a that you can supplement correctly.
feedlot. Grazing this class of cattle can be
As a grazier, you want to make sure that
a challenge at times due to their inexperi-
you receive healthy animals that have good
ence with certain feedstuffs and lack of pre-
growth potential and will make you money
vious exposure to humans. Every group has
to be trained to respect fences and not all with fast weight gains. Work with the live-
cattle have had contact with electric fences. stock owner to ensure that the animals are
To help reduce the training problems, some vaccinated, healthy and have already been
producers have found it useful to keep a few weaned. This will reduce stress on the ani-
mals and make the first few weeks of adap-
tation much smoother. Be cautious about
groups of calves recently purchased from sale
barns. Since calves may have been exposed
to additional stress and pathogens, they may
not perform as well as animals coming from
a single source. Consult with your local veter-
inarian for proper health procedures and vac-
cinations that will make your job easier and
result in healthier, faster-gaining animals.
Beef heifers
Beef heifers can require more management,
Photo courtesy of USDA-ARS.
facilities and labor than are required with
Page 4 ATTRA Grazing Contracts for Livestock

5. beef stockers, depending on the arrangement
between the owner and grazier. The key dif-
ference is that the heifers would be bred
while on the farm and would be expected
to calve at approximately 24 months of age.
Therefore, the heifers may be grazed for a
longer period, perhaps left with the grazier
from weaning until close to calving time 16
months later. Managing heifers can be labor-
intensive when synchronizing the mating of
sizeable groups of females. This may require
more facilities and equipment, and probably
some training, since the human factor in
these types of heifer development operations
is critical for success.
Well-managed heifer development opera- Photo courtesy of USDA-ARS.
tions allow heifers to receive the attention
that they need to be bred within a short time during calving (dystocia). Contract graziers
so that calving can be more easily handled may want to consider establishing a set fee
by the owner. For the additional work, there for each animal that is grazed under this
is additional return, but the expectations are system, with incentives for making breed-
also higher. In many instances, it is expected ing targets and weights during development.
that a high percentage of the heifers will be Calving out heifers should not be the first
bred to specially selected bulls via artificial contracting choice for people with limited
insemination. If this is the case, additional cattle experience.
arrangements need to be made for semen,
supplies and breeding expertise. If bulls are Dairy heifers
going to be used for breeding, it is necessary Much of the information about beef heif-
to have enough of them to ensure that all ers also applies here. With dairy heifers, the
heifers are bred within an acceptable time. cliché that heifers are the most overlooked
Young bulls can be expected to cover only 20 enterprise on the farm is too often true (Cady
to 25 females, whereas a mature bull, about and Smith, 1996). Therefore, the opportu-
2-3 years old, can cover up to 40 females if nity to contract graze dairy heifers is sizeable
he is in excellent physical shape. If bulls are and getting larger all the time. Replacement
going to be used, be sure to get their fertil- rates on most dairies are 25 to 30 percent;
ity tested before each breeding season. Just therefore, on most dairies a large number of
because a bull settled cows last year doesn’t heifers are needed to fill the vacancies along
mean he is still able to settle cows this year. the way. Another consideration is the cost of
Many cattle owners have suffered major set- replacement animals, which accounts for 15
backs due to the incorrect assumption that to 20 percent of the total cost of milk pro-
a bull was still functioning properly. Life is duction on farms, second only to feed costs
hard on the range; any number of things (Heinrichs, 1996). Therefore, the expense of
could be responsible for suboptimal perfor- raising replacements gets a lot of attention
mance and result in failed matings. on most dairy farms. Since between 50 and
Any feeding program — either supplemen- 60 percent of heifer costs are associated with
tation during grazing or full feed during feed, contracting heifer grazing to another
the non-grazing period — will need to be party presents a great opportunity for dairies
closely monitored to ensure adequate growth to reduce costs and improve profitability.
of the heifers. Heifers should be on a high The period that a dairy heifer may be on the
plain of nutrition but avoid allowing heif- contract grazier’s farm can be longer than
ers to get too fat, as this can cause problems with beef heifers, and different age groups
www.attra.ncat.org ATTRA Page 5

6. may be handled simultaneously. In some perhaps with an incentive for improved
cases, the dairy heifer owner may deliver weaning weight of the calf.
a group of young heifers every month and
The examples used in this publication focus
pick up the pregnant heifers at the same
on cattle, but sheep, goats and even horses
time. Dairy heifers may be smaller to start
can be contract grazed if you have pasture
with — perhaps a day-old calf that needs
that needs to be used and a livestock owner
milk or a two-month-old weaned calf. The
who needs pasture. In many cases, multi-
nutritional requirements for these younger
species grazing to take advantage of diver-
animals are much different from those of a
sity within your pastures may be possible,
500-pound beef heifer that is seven months making additional economic opportunities
old. Dairy heifers can usually be handled available. For more information on grazing
in four distinct age or size groups: liquid multiple species, request the ATTRA publi-
feeding (birth to weaning), weaning to 400 cation Multispecies Grazing.
pounds, 400 pounds to breeding and breed-
ing to calving (Fiez, 1993). There are targets
for weight gain for each group so that heif- Other considerations
ers do not become too large or too fat. It is Younger animals, such as stocker calves and
C
ontract critical for productive dairy heifers to reach heifers, may graze unevenly and be unwill-
grazing a critical body weight at a young calving age. ing to graze the pasture down to the desired
requires Some dairy experts stress the importance of residual height before moving on to the next
age at first calving (AFC) as the most impor- pasture or paddock. In some cases, you will
facilities suitable
tant economic trait associated with heifer have to clip or mow pastures to keep some of
for handling large programs. Increased AFC raises herd costs the forages from getting too mature before
animals, minimizing in three ways: (1) increased days of rearing, the cattle return to them. Another way to
stress on animals (2) increased number of heifers on the farm, manage this situation is to allow mature
and ensuring and (3) lost production potential (Cady and cows, with generally lower nutritional
Smith, 1996). requirements, to follow the younger animals
worker safety.
in what is often called a leader–follower graz-
If breeding the heifers is part of the contract ing arrangement. The younger animals, the
arrangement, make sure this point is written leaders in this situation, get turned in first
in the contract. In most cases, the owner will and are allowed to remove the higher-qual-
supply the semen and breeding supplies. Who ity forage from the pasture. After the calves
will supply the labor for breeding? Are you are fi nished, depending on your rotation
qualified to artificially inseminate the cattle? length, the cows are allowed to follow and
Since this type of arrangement is the most com- eat the remaining forage down to the resid-
plicated, and demands higher levels of manage- ual height you want. This method requires
ment, graziers should consult with experts in less mechanical input to manage the pasture
dairy heifer development to fully understand and will reduce the problems of some for-
the requirements and expectations. ages becoming overmature and less desirable
to the cattle.
Other classes of livestock
There may be possibilities to contract for Equipment
other classes of cattle. Many dairy farms do Handling facilities
not allot enough room for dry cow manage-
Contract grazing requires facilities suit-
ment, and some farms may want to move the
able for handling large animals, minimiz-
dry cows to better facilities to reduce man-
ing stress on animals and ensuring worker
agement problems.
safety. Good facilities allow single individu-
Another less common type of contract als to perform multiple tasks without risking
involves grazing beef cow–calf pairs over the injury to themselves or the cattle. Handling
summer, or even year-round for the cows. sick cattle in a timely fashion will be easier
Typically, there is a monthly fee for the pair, if proper facilities are in place. Depending
Page 6 ATTRA Grazing Contracts for Livestock

7. on the size of the farm and how far the cat- A scale can be incorporated into a work-
tle are from a working facility, graziers may ing facility to weigh individual animals or
want to consider temporary facilities in addi- groups. Position the scale where it can be the
tion to a central location for receiving and most useful to your overall system. Some
treating sick cattle. Cattle-working facili- scales are placed in a working alley to weigh
ties do not have to be fancy, expensive or groups of animals; others are placed in line
brand new. What is important is that they with the working chute to weigh individu-
are well designed, can withstand repeated als. In most cases, unless individual weights
use by large animals and provide protection are the only ones of interest, positioning
for both animals and workers. Effective cat- the scale in a working alley to weigh larger
tle handling facilities have been constructed groups as well as individuals will probably
from materials such as used well pipe (drill give the most flexibility to your system.
stem), timbers, recycled steel silos, guardrail
and railroad ties. It is more important that Fencing
the facility be built to deal with animal flow Fences are a major investment that can make
patterns and handling requirements than or break an operation. Time spent designing
that it be shiny, new and expensive. Three efficient fencing on the farm will eliminate
F
good resources for corral and working facil- ences are
problems in the future and facilitate easy
ities include Humane Livestock Handling a major
movement of animals.
by Temple Grandin (2008), Modern Cor- investment
ral Design by Apple et al. (1995), and Cor- The most important fence is the perimeter that can make or
rals for Handling Beef Cattle by Robert Borg fence. Additional cost and effort should go
into building a quality perimeter fence to break an operation.
(1993). Complete information about these
and other facility references can be found ensure livestock will remain on the farm,
in the Resources section. The best advice out of roadways and clear of neighbors’
regarding any livestock facility is to plan for crop fields. In most states, a legal fence
future expansion and leave plenty of space is defi ned under state statutes. Talk with
for ventilation, equipment, trailers, penning, your local Cooperative Extension or NRCS
manure storage, drainage and more. Do not office to make sure your perimeter fences
shoehorn a new investment into a space too are adequate.
small for it. Once the perimeter fence is in place, simple
Grazing contracts typically include perfor- interior fences can be built by using a sin-
mance standards for the grazier to meet. gle or double strand of electrified high-ten-
Therefore, a quality scale that can be certi- sile wire. Some farms make extensive use of
fied for commerce is usually a wise invest- poly-wire and poly-tapes to subdivide larger
ment. In some cases, a truck scale in a nearby pastures. Th is makes it easier to control
community may be sufficient, but few pro- pasture use and stocking rates and get the
ducers who have purchased animal scales most from your forage. Younger animals
have regretted the decision. Once a scale is will typically respect a single wire if they
available, monitoring animal performance are properly trained to respect an electric
is much easier. You do not have to won- fence, but a double wire may be required to
der whether the animals are gaining weight ensure that a few animals don’t graze ahead
and at what rate, or whether they will reach of the others. With mature cows and dairy
the targets specified in the contract. A scale heifers, a single wire can work well. If the
can be used not only to routinely weigh a cows have calves on the side, the single wire
can be raised to allow calves to pass under
group of cattle but also to compare different
and creep graze ahead and return to the
groups of cattle on different forages in order
herd without getting shocked.
to monitor what forages yield better gains at
different times of the year. A livestock scale If you are going to use electric fences, and
will allow you to be a better manager of both the animals you are grazing have not expe-
forages and livestock. rienced them before, a training pen might
www.attra.ncat.org ATTRA Page 7

8. be necessary. A training pen, adequately sources available. Also, have a backup plan,
sized for the animals to roam and rest, can just in case you lose electricity for extended
have multiple strands of electrified fence periods or suffer a pump failure.
— typically made very hot (highly charged)
because of the proximity to the barn where Other equipment
the fence energizer is housed. Animals stay
in the training pen for as long as needed to Depending on your geographic location
become accustomed to the folks working and local weather patterns, some shelter
on the farm, to receive daily inspections for may be required to protect animals during
health and condition and to learn to respect bad weather, minimize stress and ensure
the fences. that proper care can be given to animals
entrusted to you. In most cases, a sim-
For more information on fencing, ple pole barn is adequate. Proper ventila-
see the ATTR A publication Paddock tion is important, and avoid overcrowd-
Design, Fencing and Water Systems for ing. For grazing animals, a crowded barn
Controlled Grazing. can be worse than no barn at all. Protec-
tion from the sun and heat stress can also
Water be important in some places. Remember
Water is one of the most cost-effective nutri- that if your goal is to maximize gains and
tional ingredients and must be in ample sup- you have no trees or other form of shade,
ply at all times. Behavioral studies show that your returns will probably begin to suffer
when cows travel more than ¼ mile to water, when temperatures go above 70 degrees
pasture utilization and time spent grazing Fahrenheit and stay there for 24 hours
decreases. Utilization will suffer because cat- or more. Some heat is fi ne, as long as the
tle will graze the part of the pasture closest to cattle can recover during some part of the
the water supply or transit lane, while other day or night. With no recovery period,
portions of the pasture go untouched. Over- heat stress will accumulate and gains will
all grazing time will decline if animals have suff er. Some farms with few shade trees
to spend too much of their time walking to have made portable shades consisting of
and from water points. If water is readily a durable, lightweight frame covered with
accessible, animals will travel individually to shade cloth. Moving the shades also helps
it as needed. If water is not readily accessible, spread out the impact that large groups
the entire herd will travel together seeking of cattle can have on a pasture. For wind
water. This behavior has an impact on how protection you can use windbreaks, both
well pastures are used and how much time natural and man-made, to provide shelter.
cattle spend harvesting that pasture. Make
sure that your pastures have plenty of water
Contracts
Photo courtesy of USDA-ARS. A grazing contract is an agreement between
two parties to perform certain functions
over a certain time period. The contract can
be as complex or as simple as both parties
agree to. What is important about a contract
is that it gives both parties a record of what
they have agreed to. There are three main
points to remember about contracts:
1. The agreement must be equitable to both
the livestock owner and the grazier.
2. The contract should provide protection to
both parties.
Page 8 ATTRA Grazing Contracts for Livestock

9. 3. The contract should acknowledge the actual A flat-fee structure can also be used; how-
cost of production to provide an accurate ever, this kind of contract should only be
and fair fee arrangement (Fischer, 1996). entered into after considerable experience
with a particular owner’s cattle to ensure
that it provides adequate returns.
Key points to consider in a grazing
contract Contracts based on weight gain rely on the
Identify the responsibilities of both named grazier’s forage management and the owner’s
parties — who will provide what and when? supply of healthy, fast-growing animals. The
grazier has an incentive to keep rotating the
Define labor, equipment and management of
animals so that adequate forage is available and
livestock, including animal health.
the owner has an incentive to supply healthy
Specify targets appropriate for the type of animals that will grow well and be profitable.
animals, including weight gains, body condi-
tion scores and more. In almost all cases, the owner is respon-
sible for supplying mineral supplements
Define who will pay for various types of
services, such as additional feed, vet bills, and covering other costs associated with
medications, trucking and more. animal care. However, make sure that the
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details are spelled out in the contract, where ontracts
Specify the dates that the contract will be in
everything is subject to negotiation. If based on
force and the types, sizes and sexes of animals
to be grazed under the contract.
supplemental feed is required, delineate weight gain
in the contract who will be responsible. In
Specify how and where the animals will be rely on the grazier’s
some cases, supplemental feed costs could be
weighed; specify any appropriate shrink. subtracted from the grazier’s fee at the end of forage management
Specify under what conditions the contract the contract. Other items can also be nego- and the owner’s
can be terminated – by either party – and the tiated. For example, if the grazier is located supply of healthy,
notice required to terminate a contract. at some distance from the owner, and sup- fast-growing
Specify how the grazier will be paid after plemental feed is required, the grazier could animals.
animals are removed and on what basis, be responsible for purchasing acceptable feed
such as rate of gain, number of days or other locally and billing the owner.
options.
Source: Kidwell, 2000. Other considerations
Since you as a custom grazier are ultimately
responsible for someone else’s property, you
should have a discussion with your insurance
Prices for grazing agent to determine your possible liability in a
There are several means that owners and contract grazing arrangement. Mortality is a
graziers can use to calculate payments. Most common point to include in a contract, but
contracts are based either on time or animal what about theft? Weigh your risks carefully;
weight gain. it may help you sleep better at night know-
ing that some of those risks are covered.
One time-related payment method is the
per-acre fee for the entire grazing season.
With this arrangement, there is not any Economic projections
incentive for the grazier, and the owner suffers and budgets
if growing conditions – due to lack of rain The following projections and budgets are
and forage growth – are poor. only starting points for your own economic
A similar pricing structure is the per-head evaluations, since the numbers used are sim-
per-month fee, calculated on the incoming ply averages. Based on your geographic loca-
weight of the animals. For example, at $4 a tion, forage production and competition,
month for a hundredweight, a steer weighing the numbers used may not represent your
500 pounds would cost $20 a month. farm. The budgets have pricing matrices at
www.attra.ncat.org ATTRA Page 9

10. the bottom to help estimate the break-even PDF: www.attra.org/attra-pub/grazing
points for cost of production. It is important Contracts/beefStocker.pdf
to realize that you need to ensure long-term
returns above total costs, since this is where
true profitability begins. In the short run, Dry Cows
returns above variable costs are important. Spreadsheet: www.attra.org/attra-pub/
If an activity has no returns to variable costs, grazingContracts/dry_cows.xls
then you should not engage in it, even for a
short time. Any return above variable costs PDF: www.attra.org/attra-pub/grazing
could be used to pay for fixed costs, and in Contracts/drycows.pdf
some cases, some return to fixed costs is pre-
ferred over no return at all. Dairy Heifers
Budgets Spreadsheet: www.attra.org/attra-pub/
grazingContracts/dairy_heifers.xls
Beef Stocker Calves
Spreadsheet: www.attra.org/attra-pub/ PDF: www.attra.org/attra-pub/grazing
grazingContracts/beef_stocker.xls Contracts/dairyheifers.pdf
References
Apple, Ken, Raymond L. Huhnke, and Sam L. Harp. Grandin, Temple. 2008. Humane Livestock
1995. Modern Corral Design. Oklahoma State Univer- Handling. North Adams, MA: Storey Publishing.
sity Extension Circular E-938, Stillwater, OK. 58 p. Heinrichs, Jud. 1996. The Importance of Heifer Raising
Borg, Robert. 1993. Corrals for Handling Beef Cattle. to a Profitable Dairy Farm. Proceedings from the Calves,
Alberta Agriculture, Food and Rural Development, Heifers, and Dairy Profitability National Conference.
Edmonton, Alberta, Canada. 91 p. Harrisburg, PA. January 10-12. NRAES-74. p. 1-6.
Kidwell, Boyd. 2000. Contract Grazing. Progressive
Cady, Roger A., and Terry R. Smith. 1996. Economics of
Farmer Magazine. November. p. 22-25.
Heifer Raising Programs. Proceedings from the Calves,
Heifers, and Dairy Profitability National Conference. Matches, Arthur, and Joseph C. Burns. 1995. Systems
Harrisburg, Pennsylvania. January 10-12. of Grazing Management. p. 179-192. In: Robert Barnes,
NRAES-74. p. 1-6. Darrell A. Miller, and C. Jerry Nelson (eds.). Forages –
Volume II: The Science of Grassland Agriculture. 5th
Cates, Dick. 2000. Getting Grass Cattle to Your Farm edition. Iowa State University Press, Ames, IA.
or Ranch. Proceedings from Great Lakes International
Phillip, L.E., P. Goldsmith, M. Bergeron, and P.R.
Grazing Conference. Shipshewana, IN. p. 15-16. Peterson. 2001. Optimizing pasture management for
Doye, Damona G., and Eugene Krenzer, Jr. 1989. cow-calf production: the roles of rotational frequency
Should I Buy (or Retain) Stockers to Graze Wheat and stocking rate in the context of system efficiency.
Pasture. Oklahoma State University Extension Service. Canadian Journal of Animal Science. 81(1) p. 47-56.
Stillwater, OK. F-212 6 p. http://pods.dasnr.okstate.edu/ Teegerstrom, Trent, Gerard D’Souza, Phillip Osborne,
docushare/dsweb/Get/Document-3271/AGEC-212web.pdf and Kezelee Jones. 1997. To Contract or Not to Con-
tract? A Decision Theory and Portfolio Analysis of Cattle
Fiez, Edward A. 1993. Contract Considerations for Contract Grazing. Agricultural and Resource Economics
Dairy Replacements. Western Large Herd Management Review. 26(2). p. 205-215. http://ageconsearch.umn.edu/
Conference Proceedings. Las Vegas, NV. p. 85-92. bitstream/31566/1/26020205.pdf
www.wdmc.org/1993/93WDMC092-99.pdf
Fischer, David B. 1996. Contract Heifer Raising.
Further resources
Illinois Dairy Report. University of Illinois DairyNet. Contracts
1 p. www.livestocktrail.uiuc.edu/dairynet/paperDisplay. Livestock Production Contract Checklist. 1996. Attor-
cfm?ContentID=224 ney General Tom Miller’s Production Contracts Task
Page 10 ATTRA Grazing Contracts for Livestock

11. Force. Office of the Attorney General, Iowa Department PO Box 2300
of Justice. Accessed 2009. www.extension.iastate.edu/ Ridgeland, MS 39158-9911
Grain/Topics/LivestockProductionContractChecklist.htm (601) 853-1861
Pasture Lease – Contract Grazing Agreement. Polk 1-800-748-9808 • (601) 853-8087 FAX
County Division of Cooperative Extension of the sgf@stockmangrassfarmer.com
University of Wisconsin-Extension. Accessed June www.stockmangrassfarmer.net/index.html
2007. polk.uwex.edu/ag/documents/PastureLease.pdf Morrow, Ron, Jim Gerrish, and Paul Peterson. Practi-
This form was prepared to assist in reaching and recording cal Use Leader-Follower Grazing Systems. The Missouri
a lease agreement. Agriculture Experiment Station. University of Missouri.
Accessed June 2009. http://aes.missouri.edu/fsrc/news/
Grazing archives/nl94v3n1.stm.
Matches, Arthur, and Joseph C. Burns. 1995. Systems
Rayburn, Ed (ed.). 2007. Forage Utilization for Pasture-
of Grazing Management. p. 179-192. In: Robert Barnes,
Darrell A. Miller, and C. Jerry Nelson (eds.). Forages – Based Livestock Production. Natural Resource, Agri-
Volume II: The Science of Grassland Agriculture. 5th culture, and Engineering Service. 185 p. Order from:
edition. Iowa State University Press, Ames, IA. NRAES
Cooperative Extension
Blanchet, Kevin, Howard Moechnig, and Jodi PO Box 4557
Dejong-Hughes. 2000. Grazing Systems Planning Ithaca, NY 14852-4557
Guide. University of Minnesota Extension Service. or
Publication No. BU-07606. www.extension.umn.edu/ For UPS, FedEx or pick up
distribution/livestocksystems/DI7606.html NRAES, Cooperative Extension
Judy, Greg. 2002. No Risk Ranching: Custom Grazing B-16 Morrison Hall
on Leased Land. Green Park Press. ISBN 0963246089. Ithaca, NY 14853-4801
236 p. www.stockmangrassfarmer.net/cgi-bin/page. (607) 255-7654 • (607) 254-8770 FAX
cgi?id=360 nraes@cornell.edu • www.nraes.org
Based on his personal experience, Greg Judy shows how
to make a living from the land without owning it. He Contract dairy heifers
describes his successes, as well as his mistakes, to help oth- Fiez, Edward A. 1993. Contract Considerations for
ers on the road to profit. By leasing land and cattle, he Dairy Replacements. Western Large Herd Management
went from 40 stockers to more than 1,100 head and Conference Proceedings. Department of Animal and
was able to pay off his farm and home loan within three Veterinary Science, University of Idaho, Las Vegas, NV.
years. Today he has 12 farms totaling more than 1,560 www.wdmc.org/1993/93WDMC092-99.pdf.
acres. Easy-to-follow chapters explain how to:
• Find idle pastureland to lease Professional Dairy Heifers Growers Association
• Calculate the cost of a lease and write a contract 801 Shakespeare, PO Box 497
• Develop good water on leased land Stratford, IA 50249
• Figure costs for fencing 1-877-434-3377 • (515) 838-2788 FAX
• Lower risk through custom grazing pdhga@pdhga.org • www.pdhga.org
• Promote wildlife and develop timber stands
• Cut costs as well as keep accurate records Beiler, Joseph. 2000. Dairy Heifer Contracting:
Order from: Motives, Forms, and Arrangements. The Ohio State
Stockman Grassfarmer University Extension Fact Sheet. AS-0005-00.
PO Box 2300 http://ohioline.osu.edu/as-fact/0005.html
Ridgeland, MS 39158-9911 Gunderson, S.L. Heifer Raising Contract (Version 2.1).
or Manitowoc County UW-Extension Dairy Agent.
1-800-748-9808 www.uwex.edu/ces/cty/manitowoc/ag/documents/
Cost is $33.60, including postage and handling HeiferRaisingContract.pdf
Gerrish, Jim. 2004. Management-intensive Grazing: Moore, Robert, Joseph Beiler, and Gary Schnitkey.
The Grassroots of Grass Farming. 314 p. Order from: 2000. The Economics of Heifer Contracting. The Ohio
The Stockman Grass Farmer
www.attra.ncat.org ATTRA Page 11

12. State University Extension Fact Sheet. AS-0006-00. (970) 229-0703
http://ohioline.osu.edu/as-fact/0006.html www.grandin.com
Grandin’s book Humane Livestock Handling explains
Dairy Heifer Housing. 1997. Penn State Dairy
animal behavior principles to reduce stress on your ani-
Housing Plans. NRAES-85. 106 p.
This publication (a revision of Penn State Freestall and mals and contains layouts of corrals for ranches, feedlots
Heifer Housing Plans, 1994) is a collection of 29 plans and meat plants; designs for large and small beef cattle
developed by faculty and staff of the Department of Agricul- operations; and complete instructions and illustrations
tural Biological Engineering at the Pennsylvania State Uni- to show you how to build chutes, loading ramps, fences,
versity and the Penn State Cooperative Extension. Included gates, latches, crowd pens and sliding gates. It also
are 12 freestall housing plans, six heifer housing plans, four contains sheep and bison layouts.
dry cow and maternity housing plans and seven plans for Apple, Ken, Raymond L. Huhnke, and Sam L. Harp.
details and components. Plans have been revised to incor- 1995. Modern Corral Design. Oklahoma State University
porate the latest recommendations for freestall design, ven- Extension Circular E-938. Stillwater, OK. Order from:
tilation and cow movement. The freestall section contains PBIS
plans for various two-row, three-row, four-row and six-row Biosystems and Agricultural Engineering Department
freestall barns. Included in the heifer section are plans for 214 Agriculture Hall
bedded pack housing, counter-slope housing, single-slope Oklahoma State University
housing and three types of heifer freestall barns. The section Stillwater, OK 74078-6021
on dry cow and maternity housing contains ideas for hous-
ing dry cows in bedded pack groups, multiple pen barns Borg, Robert. 1993. Corrals for Handling Beef Cattle.
with drive-through feeding, pre-fresh and maternity pen Alberta Agriculture, Food and Rural Development.
areas, convalescence areas and post-fresh housing facilities. Agdex 420/723-1. Edmonton, Alberta, Canada. 91
Included in the detail and components section are sidewall p. www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/
curtains and drainage, watering locations, floor surfaces, agdex27?opendocument
feed barriers, freestalls and ventilation openings. Also new This best-selling book features information on cattle
to this edition are introductory discussions with each section behavior, handling techniques, corral design, corral
and a list of suggested readings. geometry and corral components. It has more than 60
Order from: designs and corral plans. It has been reviewed by indus-
NRAES Cooperative Extension try experts including Temple Grandin, the internation-
PO Box 4557 ally recognized expert on cattle behavior from Colorado
Ithaca, NY 14852-4557 State University.
(607) 255-7654 • (607) 254-8770 FAX To order: 1-800-292-5697 or (780) 427-0391
nraes@cornell.edu
Beef Housing and Equipment Handbook. 1987.
www.nraes.org/nra_order.taf?_function=detail&pr_
MWPS-6. 136 pages. 4th edition. ISBN 0-89373-068-8
id=39&_UserReference=31777E4712C476E7498AD652
Current agricultural engineering recommendations are
New York residents add 8 percent sales tax (calculated
summarized in this complete housing guide. Essential com-
on both the cost of publications and the shipping and
ponents for an efficient operation such as building design,
handling charges). operation size and equipment are discussed. Figures, tables
Roth, Sarah, Jud Heinrichs, and Coleen Jones. Dairy and discussions to help improve, expand and modernize an
Heifer Contracting Fundamentals. Department of operation are included. Topics cover cow-calf, cattle han-
Dairy and Animal Science. The Pennsylvania State dling and cattle feeding facilities; feed storage, processing
University. www.das.psu.edu/dairy/nutrition/pdf/ and handling; water and waterers; manure management;
heifercontract.pdf farmstead planning; building construction and materials;
ventilation and insulation; fences; gates; and utilities.
Corral design and Order from:
MidWest Plan Service
handling facilities 122 Davidson Hall
Grandin Livestock Handling System, Inc. Iowa State University
Temple Grandin, Ph.D. Ames, IA 50011
2918 Silver Plume Drive, Unit C3 1-800-562-3618
Fort Collins, CO 80526 USA www.mwps.org
Page 12 ATTRA Grazing Contracts for Livestock

13. Burns, Robert T., and Michael J. Buschermohle. Selection Estimated Costs and Returns for Commercial Beef
of Alternative Livestock Watering Systems. Agricultural Cattle and Forage Systems – Intensive Production,
Extension Service. University of Tennessee. East Texas. Dr. Greg Clary, extension economist
www.utextension.utk.edu/publications/pbfiles/PB1641.pdf Texas Agricultural Research and Extension Center
Gerrish, James R. Fence Systems for Grazing Management PO Box 38
1: Electric Fence Energizers. Extension Beef Cattle Overton, TX 75684
Resource Committee. Beef Cattle Handbook. University (903) 834-6191 • (903) 834-7140 FAX
of Wisconsin-Extension, Cooperative Extension. g-clary@ag.tamu.edu
www.iowabeefcenter.org/pdfs/bch/06201.pdf Clary also provides budgets online that do not require
Grandin, Temple. Cattle Behavior During Handling downloads at http://ruralbusiness.tamu.edu.
and Corral Design for Ranches. Beef Cattle Handbook. University of Tennessee Livestock Budgets. Budgets
Extension Beef Cattle Resource Committee. University
for row crops, forage and livestock production.
of Wisconsin-Extension, Cooperative Extension.
www.iowabeefcenter.org/pdfs/bch/09003.pdf http://economics.ag.utk.edu/budgets.html
Kammel, David W. Heifer Housing Considerations: Texas Center for Rural Entrepreneurship. www.tcre.org
Designing Facilities to Enhance Heifer Performance.
Center for Dairy Profitability. Biological Systems Engi- Beef Budgets
neering. www.uwex.edu/ces/dairymod/housing/documents/ Compilation of 15 different budgets for cattle production
HeiferHousingConsiderations-NRAES2005.pdf and several pasture and forage budgets. http://economics.
Quam, Vernon, and LaDon Johnson. Windbreaks for ag.utk.edu/budgets/BeefBudgets2007.pdf
Livestock Operations. University of Nebraska Coop-
Gadberry, Shane. Cow-calf Enterprise Budget. University
erative Extension. www.unl.edu/nac/morepublications/
ec1766.pdf of Arkansas Cooperative Extension Service. www.uaex.
edu/Other_Areas/publications/PDF/MP-413.pdf
TAMU. 2005. Value Added Calf (VAC) -
Management Program. Texas Cooperative Extension. Gadberry, Shane, Tom Troxel, and John Jennings.
http://coastalbend.tamu.edu/Extension/animal%20science/ Practices to Improve Beef Cattle Efficiency. University
VAC_Management.pdf of Arkansas Cooperative Extension. www.uaex.edu/
This document covers pre-weaning and backgrounding Other_Areas/publications/PDF/fsa-3060.pdf
program including health management and vaccinations.
Livestock Enterprise Budgets—Iowa 2003. Drs. Gary
Turner, Larry W. Shade Options for Grazing Cattle. May, William Edwards, and John Lawrence. Iowa State
University of Kentucky Cooperative Extension Service. University Extension, Ames, IA. Publication #FM-1815
www.bae.uky.edu/Publications/AEUs/aeu-91.pdf www.extension.iastate.edu/Publications/FM1815.pdf
Additional livestock economic information can be found
Grazing budgets and economic on Dr. Lawrence’s Web page at www.econ.iastate.edu/
information faculty/lawrence
NOTE: Most state universities and Cooperative Extension University of Missouri Farm Budgets.
have budgets for agricultural products in their states. Below http://agebb.missouri.edu/mgt/budget
is a sample of some of the budget and economic information
Source of forage, livestock and crop budgets.
that is available in electronic format. For an electronic copy
of these resources, please e-mail Lee Rinehart, NCAT Virginia Cooperative Extension. 2001-2002. Virginia
livestock specialist, at leer@ncat.org. Farm Business Management Crop and Livestock
Eldridge, R.W., Kenneth H. Burdine, and Richard Budgets. Publication Number 446-047.
Trimble. 2005. The Economics of Rotational Grazing. Spreadsheets and PDF files with various budgets
University of Kentucky Cooperative Extension Service. for agricultural products are available from Virginia
www.uky.edu/Ag/AgriculturalEconomics/pubs/ext_aec/ Cooperative Extension at www.ext.vt.edu/pubs/
ext2005-02.pdf. agecon/446-047/446-047.html
www.attra.ncat.org ATTRA Page 13

14. Notes
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15. Notes
www.attra.ncat.org ATTRA Page 15

16. Grazing Contracts for Livestock
Updated by Hannah Sharp, NCAT Intern
and Lee Rinehart, NCAT Agriculture Specialist
© 2010 NCAT
Holly Michels, Editor
Amy Smith, Production
This publication is available on the Web at:
www.attra.ncat.org/attra-pub/grazingcontracts.html
or
www.attra.ncat.org/attra-pub/PDF/grazingcontracts.pdf
IP247
Slot 248
Version 012710
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