Thursday, November 11, 2010
If you rent grass, think about locking in a long term lease
I know I'm getting away from my mob grazing posts, but it's kinda boring right now at the ranch (thank God)...nothing is dying, no scours to report on, life is pretty good. So I thought I would try to share some of my thoughts on other ranching related issues. I really enjoy following the price of corn. Beef producers love to complain about ethanol subsidies and the related high price of corn. But the truth is that higher grain prices makes your grass much more valuable, and that what we really are, grass farmers. For that reason, if you believe that high corn prices are here to stay (which I do), now is the time to lock in your leases long term...I will not sign a lease less than 7 years long. First, I can't afford to make the necessary improvements usually needed only to be gone the next year, and secondly, just like farm rents must go up with corn, grass rents will follow. Locking in your lease rates now will save you lots of $$$$ in the future and will allow you to make decisions to improve your place that you can't make with short term leases.