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Lease Rates for Privately Owned, Non-Irrigated Pastures

Leasing is a valuable strategy for farmers and ranchers to gain access to pasture without the high capital investment needed to purchase the land. For the landowner, lease payments serve as an added source of income. A lease does not transfer ownership nor an equity interest in the asset. The fee is typically based on the number of acres in the arrangement ($/acre) or the number of animals allowed to graze the land ($/AUM). An animal unit month (AUM) is considered to be the number of acres needed for one beef cow to graze for one month. A yearling beef animal is generally 0.74 AUM, and one ewe sheep is 0.20 AUM.

The Colorado Board of Land Commissioners (or State Land Board) “was established in 1876 to manage the land and mineral rights given by the federal government to Colorado to generate revenue for public education and some of the state’s institutions.” The State Land Board leases 98 percent of the approximately 2.8 million acres it owns in Colorado for grazing, non-irrigated crop production, and irrigated farming.

Methodology

Agricultural and Business Management Economists at Colorado State University, in collaboration with professional staff members of the State Land Board, designed a questionnaire to collect data about leases of non-irrigated, privately owned pasture in Colorado. Similar surveys were conducted in 2010, 2013, 2015, 2016, and 2019.

In June 2022, landowners and tenants throughout Colorado were invited to complete an online survey pertaining to leases of privately owned non-irrigated pastures in 2021 and 2022. To encourage participation, follow-up emails were sent to the list of about 1,850 landowners and tenants and the researchers requested that agricultural organizations encourage their members to participate in the survey.

Survey data were collected, analyzed, and reported for five State Land Board grazing regions.

  • Northwest – Eagle, Garfield, Grand, Jackson, Moffat, Rio Blanco, Routt, and Summit Counties.
  • Northeast – Adams, Arapahoe, Boulder, Broomfield, Denver, Jefferson, Larimer, Logan, Morgan, Phillips, Sedgwick, Washington, Weld, and Yuma Counties.
  • East Central – Cheyenne, Douglas, El Paso, Elbert, Kiowa, Kit Carson, and Lincoln.
  • Southeast – Baca, Bent, Crowley, Huerfano, Las Animas, Otero, Prowers, and Pueblo.
  • Southwest – Alamosa, Archuleta, Chaffee, Clear Creek, Conejos, Costilla, Delta, Dolores, Fremont, Gilpin, Gunnison, Hinsdale, La Plata, Lake, Mesa, Mineral, Montezuma, Ouray, Park, Pitkin, Rio Grande, Saguache, San Juan, San Miguel Counties, and Teller Counties.

Survey results

Data from leases as reported by landowners and livestock owners were analyzed to determine the purpose of the lease, lease size, carrying capacities, and lease rates in 2021 and 2022. Responses with incomplete information and data outside normal bounds were excluded from the analysis. One lease, reported for the Southeast Grazing Region, consisted of 50,000 acres was not included in the analysis. There were sufficient data to report results for each grazing region and the state. All leases used in the analysis pertained to privately owned, non-irrigated pastureland. Further, any seemingly large differences of numbers reported for 2021 and 2022 are the result of differences in survey participants from one year to the next. Not all participants reported leases in both years and/or may have reported information for different leases.

Table 1. Number of Survey Responses Included in the Analysis
State Land Board Grazing Regions20212022
Colorado8289
Northwest912
Northeast2127
East Central1314
Southeast1314
Southwest2622

Written Leases: Approximately two-thirds of leases in 2021 and sixty percent in 2022 were written contracts as opposed to verbal or handshake agreements. Leases in the Northwest grazing region were more likely to be written, while leases in the Northeast grazing region were least likely to be in written format.

Table 2. Leases in 2021 and 2022 of Privately Owned Non-Irrigated Pastureland Which Were Written.
YearColoradoNorthwestNortheastEast CentralSoutheastSouthwest
202168%89%52%62%84%69%
202261%83%33%64%64%59%

Lease Purpose: Survey participants had five specific options and “other” to report the type of animals allowed to graze on leased pasture: cows/cow-calf pairs, yearlings, pairs or yearlings, sheep/goats, and “the lease does not specify animal type. Examples of “other” included bees, horses, bison, and alpacas.

Most leases of pastureland in Colorado pertain to grazing of cattle, as was the case in all previous studies. All cattle accounted for more than 80 percent of all leases in both 2021 and 2022. Approximately 17 percent of reported leases did not specify nor limit the type of animal allowed to graze the pastureland. Almost no reported leases were specifically for sheep and goats.

Table 3. Type of Animals Specified to Graze Privately Owned, Non-Irrigated Pastures in Colorado in 2021 and 2022 by State Land Board Grazing Region.
RegionYearCows & PairsYearlingsPairs or YearlingsSheep / GoatsNot Specified or No LimitsAll Other Combinations
State-wide202154%5%21%1%16%4%
State-wide202259%12%12%1%20%4%
Northwest202156%11%11%0%22%0%
Northwest202255%9%18%0%18%0%
Northeast202133%14%33%0%19%0%
Northeast202241%22%11%4%19%4%
East Central202177%n/a0%0%15%8%
East Central202243%7%14%0%36%0%
Southeast202146%n/a8%0%31%15%
Southeast202264%7%0%0%29%0%
Southwest202162%n/a31%4%4%0%
Southwest202273%5%14%0%0%9%

Length of Leases: The highest percentage of leases in 2021 and 2022 for privately owned, non-irrigated pasture in Colorado was reported as being leased for one year. One third of reported leases were for multiple years. Conversely, few pasture leases are for periods of less than one month. It is not uncommon for annual leases to be renewed.

Lease Size: There was significant variation in the size of pastures leased in 2021 and 2022. The largest lease consisted of 26,100 acres in the Southeast grazing region, while the smallest parcel 2021 was 30 acres in the Southeast and Southwest grazing regions and 5 acres in the Northeast grazing region in 2022. The state-wide average number of acres in a lease was just more than 2,155 acres in 2021 and 1,812 acres in 2022. The median (middle of a set of numbers) number of acres per lease was 765 in 2021 and 500 in 2022. The most common (mode) number of acres in a lease was too variable to provide any reliable information.

Table 4. Length of Leases in 2021 and 2022 Pertaining to Privately Owned, Non-irrigated Pastureland in Colorado by State Land Board Grazing Region
Lease LengthYearColoradoNorthwestNortheastEast CentralSoutheastSouthwest
Multiple Years202134%n/a38%20%53%39%
Multiple Years202235%42%19%29%38%41%
Annually202142%45%54%40%41%32%
Annually202236%8%52%29%31%31%
Monthly202117%36%4%27%5%41%
Monthly202225%33%26%18%25%21%
Daily/Other20217%18%4%13%n/a7%
Daily/Other20222%2%n/an/an/a3%
Table 5. Acres in Leases of Colorado Pasture in 2021 and 2022 by State Land Board Grazing Region
MeasureYearColoradoNorthwestNortheastEast CentralSoutheastSouthwest
Range202126,100 – 302,500 – 20012,700 – 456,980 – 13026,100 – 308,000 – 30
Range202226,100 – 52,000 – 8012,700 – 56,980 – 16026,100 – 308,000 – 60
Average²20212,1559282,5391,9944,5491,153
Average²20221,8126401,7141,2434,1721,198
Median³20217656401,1507802,900600
Median³2022500900400640650300
Mode⁴20212,000n/a4,600n/a3,000300
Mode⁴20221609004,000n/a160300

Lease Carrying Capacity: The “carrying capacity” of privately owned, non-irrigated pastures pertains to the number of acres required to produce the forage needed to graze 1.0 animal unit (AU) for a 6-month grazing period. The range of reported acres per AU varied significantly across the state. The large range could be due to several factors, including drought conditions, limits to the number of animals allowed to graze the leased land, soil types, historical grazing use, and topography.

The average carrying capacity of privately owned, non-irrigated pastures throughout Colorado was 24 acres per animal unit month according in both 2021 and 2022. The median carrying capacity across the state was 20 acres per AU. The Northwest and East Central grazing regions reported the lowest carrying capacities (50 acres per animal), and the Northeast and Southeast grazing regions reported the highest carrying capacities in 2021 and 2022.

Table 6. Carrying Capacities (Acres Per AU) of Leases of Colorado Pastureland in 2021 and 2022 by State Land Board Grazing Region.
MeasureYearColoradoNorthwestNortheastEast CentralSoutheastSouthwest
Range202185 – 150 – 556 – 150 – 352 – 585 – 2
Range202290 – 150 – 1590 – 150 – 452 – 550 – 1
Average²2021243119322421
Average²2022243223312317
Median³2021203518352012
Median³2022202720351211
Mode⁴2021505020501050
Mode⁴20225050205056

Lease Rates: Survey participants were asked to report the rate paid or received for privately owned, non-irrigated pasture in Colorado in 2021 and 2022 on a dollars per “acre”, “animal unit month”, “head per month”, or “head per day”. Participants also could report the total dollars associated with the lease agreement. Leases based on a dollar per head per month usually disregard animal size, whereas leases based on dollars per animal unit month, by definition, consider animal size. State-wide, 30 percent of all reported leases were computed on a per animal unit month (AUM) or per head per month basis. The number of leases paid on a “dollar per acre” increase from 18 percent in 2021 to 85 percent in 2022. Anecdotal data (conversations between the researchers and producers and lenders) support this change.

Leases reported for 2021 ranged from $35.00 to $10.00 per head per month, while the range in lease rates reported for 2022 was $27.50 to $10.00 per head per month. The average and median prices paid per acre were $6.69 and $6.00 in 2021 and $14.00 and $10.00 in 2022. There were an insufficient number of reported leases in the Northwest and Southeast grazing regions based on dollars per acre and dollars per head per day. Other survey and anecdotal data suggest drought conditions reduced grass production and caused prices to be higher in 2022.

Table 7. Lease Rates for Privately Owned, Non-Irrigated Pastures in Colorado in 2021 and 2022 by State Land Board Districts
Rate BasisYearStatisticColoradoNorthwestNortheastEast CentralSoutheastSouthwest
Dollar per Head per Month2021Range35-1030-1535-1325-1622-1635-10
Dollar per Head per Month2021Average22.5222.0023.1421.6719.0023.71
Dollar per Head per Month2021Median22.0021.5022.0024.0019.0025.00
Dollar per Head per Month2021Mode30.0015.0030.00n/an/an/a
Dollar per Head per Month2022Range50-1022-1540-1530-1824-1650-10
Dollar per Head per Month2022Average22.8318.7523.8924.0020.0023.83
Dollar per Head per Month2022Median20.0019.0020.0024.0020.0020.00
Dollar per Head per Month2022Mode20.00n/a30.00n/an/a10.00
Dollar per Animal Unit Month2021Range30-1028-2530-1825-1622-1626-10
Dollar per Animal Unit Month2021Average22.0626.2524.8821.6719.0021.50
Dollar per Animal Unit Month2021Median22.0026.2525.7524.0019.0023.50
Dollar per Animal Unit Month2021Mode25.00n/a30.00n/an/a25.00
Dollar per Animal Unit Month2022Range28-1028-2522-10n/a14-1225-20
Dollar per Animal Unit Month2022Average20.3326.7517.67n/a13.0022.50
Dollar per Animal Unit Month2022Median21.5027.2521.0024.0013.0022.50
Dollar per Animal Unit Month2022Mode27.5027.50n/an/an/an/a
Dollar per Acre2021Range20.00-1.00n/a12.50-6.5020.00-5.006.00-2.50n/a
Dollar per Acre2021Average6.69n/a9.259.024.06n/a
Dollar per Acre2021Median6.00n/a9.006.593.88n/a
Dollar per Acre2021Mode6.00n/an/an/a2.50n/a
Dollar per Acre2022Range50.00-1.00n/a50.00-8.0015.00-5.0025.00-4.0030.00-1.00
Dollar per Acre2022Average14.00n/a18.5710.009.5617.67
Dollar per Acre2022Median10.00n/a12.338.754.6322.00
Dollar per Acre2022Mode30.00n/an/a15.004.00n/a
Dollar per Head per Day2021Range30.00-0.80n/a30.00-1.001.00-0.80n/a30.00-1.00
Dollar per Head per Day2021Average7.57n/a8.630.87n/a15.50
Dollar per Head per Day2021Median1.00n/a1.750.80n/a15.50
Dollar per Head per Day2021Mode1.00n/an/a0.80n/an/a
Dollar per Head per Day2022Range10.00-0.25n/a2.00-0.251.00-0.80n/a10.00-0.60
Dollar per Head per Day2022Average1.59n/a1.000.90n/a3.87
Dollar per Head per Day2022Median1.00n/a1.000.90n/a1.00
Dollar per Head per Day2022Mode1.00n/a1.00n/an/an/a

Provider of Services/Activities: Within many leases of privately owned, non-irrigated pasture is language regarding whether the landowner or the tenant bears the cost of maintaining infrastructure (e.g., fences and watering systems), providing water, animal care, and providing salt and mineral. Survey participants were given the options of marking whether the costs of the service or activity was paid by the landowner or the tenant, the costs were shared by the landowner and tenant, or by some other person or entity.

For leases in 2021 and 2022, the labor to repair and maintain existing fences was provided by the tenant. Materials for new fence construction and water supply construction was provided by the landowner in about than seventy percent (70%) of the reported lease agreements. For longer-term leases, tenants were reported as paying a higher percentage of the costs associated with constructing new fences and water supplies. Tenants paid for salt and minerals and animal oversight is approximately ninety percent (90%) of reported lease agreements.

Table 8. Landowners and Tenants Paying for Selected Services and Activities When Leasing Privately Owned, Non-Irrigated Pastures in Colorado in 2021 and 2022 by State Land Board Grazing Regions.
Who Paid the Costs of:2021 Tenant2021 Land Owner2021 Shared2022 Tenant2022 Land Owner2022 Shared
Labor for repairing existing fences67%16%17%62%30%8%
Materials for repairing existing fences44%40%16%46%45%8%
Labor for building new fences40%53%7%29%65%5%
Materials for building new fences23%70%7%20%77%3%
Supplying water to grazing animals41%51%8%33%63%4%
Installing pipelines31%67%2%28%71%2%
Constructing earthen water “tanks”26%72%3%24%69%6%
Materials for constructing non-earthen water “tanks”35%56%9%24%71%5%
Construction of non-earthen water “tanks”38%58%4%26%68%5%
Maintenance and oversight of grazing animals89%6%4%83%12%5%
Salt and minerals for grazing animals93%4%3%93%6%1%

Other Marketable Rights: Some pasture lease agreements for privately owned non-irrigated pastureland allow the tenant to use or sell hunting, fishing, and other rights to the land. Survey responses suggest that most leases (93% in 2021 and 100% in 2022) do not allow the tenant any marketable rights beyond grazing. These high percentages are consistent with the results of past surveys.

Comparison Across Years

Colorado State University has conducted, on behalf of the Colorado Land Board, a survey of lease rates and attributes of privately owned non-irrigated pastureland since 2010. Survey results were analyzed and 8 shared with the Colorado Land Board, agricultural lenders throughout Colorado, landowners, and land tenants.

Lease rates have tended to increase from 2010 to 2022, regardless of the basis for computing lease rates. Drought conditions in a particular area of Colorado will cause annual increases (and/or larger than normal increases) to lease rates. Additionally, both survey data and anecdotal data suggest that pastures near urban areas tend to be smaller in acreage and higher in price.

Table 9. Comparison of Lease Rates for Privately Owned Non-Irrigated Pasture as Reported in Surveys Conducted by Colorado State University and the Colorado Land Board.
BasisRegionStatistic201020132016201920212022
Dollar Per AcreColoradoAverage3.734.966.294.596.6914.00
Dollar Per AcreColoradoMedian5.004.005.004.006.0010.00
Dollar Per AcreNorthwestAverage4.074.393.224.01n/a30.00
Dollar Per AcreNorthwestMedian3.003.003.003.00n/a30.00
Dollar Per AcreNortheastAverage3.806.737.433.829.2518.57
Dollar Per AcreNortheastMedian2.007.007.503.889.0012.33
Dollar Per AcreEast CentralAverage4.895.795.196.789.0210.00
Dollar Per AcreEast CentralMedian5.005.005.006.506.598.75
Dollar Per AcreSoutheastAverage3.074.344.015.104.069.59
Dollar Per AcreSoutheastMedian4.003.674.005.003.884.63
Dollar Per AcreSouthwestAverage3.054.9611.721.731.0017.67
Dollar Per AcreSouthwestMedian1.004.002.571.001.0022.00
Dollar Per AUMColoradoAverage14.8216.4917.5321.0022.0620.33
Dollar Per AUMColoradoMediann/a15.0017.0020.0022.0021.50
Dollar Per AUMNorthwestAverage14.2215.1217.6217.8626.2526.75
Dollar Per AUMNorthwestMedian13.2515.0018.0016.2526.2527.25
Dollar Per AUMNortheastAverage17.8421.1820.2524.6424.8817.67
Dollar Per AUMNortheastMedian18.0020.0018.0027.0025.7521.00
Dollar Per AUMEast CentralAverage14.7615.1617.6421.7821.67n/a
Dollar Per AUMEast CentralMedian13.0015.0017.5020.0024.0024.00
Dollar Per AUMSoutheastAverage17.7215.8216.4021.7819.0013.00
Dollar Per AUMSoutheastMedian15.0015.0018.0020.0019.0013.00
Dollar Per AUMSouthwestAverage13.7714.6715.8021.9521.5022.50
Dollar Per AUMSouthwestMediann/a14.0015.0020.0023.5022.50

NASS Survey Results

USDA’s National Agricultural Statistics Service (NASS) conducts county level surveys of pasture lease rates. Pasture consists of permanent pasture and grassland that is normally grazed by livestock, regardless of whether the pasture is irrigated or not irrigated. The “per acre” cash rental rate for each county, according to the NASS surveys for 2021 and 2022 are provided as references.

Table 10. Annual Lease Rates (Dollars Per Acre) by District and County for 2020 and 2021, according to National Agricultural Statistics Service Survey Data.
RegionCounty2020 ($/Acre)2021 ($/Acre)
Northwest & MountainChaffee7.70n/a
Northwest & MountainClear Creekn/an/a
Northwest & MountainEaglen/an/a
Northwest & MountainGilpinn/an/a
Northwest & MountainGrand8.8011.50
Northwest & MountainGunnison5.909.50
Northwest & MountainJackson5.60n/a
Northwest & MountainLaken/an/a
Northwest & MountainMoffat4.003.80
Northwest & MountainPark1.301.80
Northwest & MountainPitkinn/an/a
Northwest & MountainRio Blanco1.801.50
Northwest & MountainRouttn/a5.00
Northwest & MountainSummitn/an/a
Northwest & MountainTeller1.901.70
Northwest & MountainOther (Combined) Counties11.50n/a
NortheastBoulder3.10n/a
NortheastBroomfieldn/an/a
NortheastJefferson1.902.00
NortheastLarimer8.407.90
NortheastLogan7.308.40
NortheastMorgan11.008.60
NortheastSedgwick15.5012.50
NortheastWeld7.505.50
NortheastOther (Combined) Countiesn/an/a
East CentralAdams16.006.20
East CentralArapahoe5.506.80
East CentralCheyenne8.606.20
East CentralDenvern/an/a
East CentralDouglasn/a9.70
East CentralEl Paso6.606.80
East CentralElbert6.006.00
East CentralKiowa7.507.30
East CentralKit Carson12.5012.50
East CentralLincoln5.006.50
East CentralPhillipsn/a12.00
East CentralWashington10.508.90
East CentralYuma14.0014.00
East CentralOther (Combined) Counties10.50n/a
SoutheastBaca5.004.60
SoutheastBent5.304.00
SoutheastCrowley4.904.20
SoutheastCuster3.805.90
SoutheastFremont1.704.60
SoutheastHuerfano2.903.90
SoutheastLas Animas4.303.60
SoutheastOtero4.303.00
SoutheastProwers5.705.40
SoutheastPueblo3.503.70
SoutheastOther (Combined) Countiesn/an/a
San Luis ValleyAlamosa8.909.70
San Luis ValleyConejos9.7011.50
San Luis ValleyCostilla4.802.70
San Luis ValleyMineraln/an/a
San Luis ValleyRio Granden/a10.00
San Luis ValleySaguache7.5010.50
San Luis ValleyOther (Combined) Counties13.50n/a
SouthwestArchuleta3.003.10
SouthwestDelta5.505.40
SouthwestDoloresn/an/a
SouthwestGarfield2.702.10
SouthwestHinsdalen/an/a
SouthwestLa Plata11.0010.00
SouthwestMesa2.702.20
SouthwestMontezuma6.407.50
SouthwestMontrose8.307.00
SouthwestOurayn/an/a
SouthwestSan Juann/an/a
SouthwestSan Miguel3.103.10
SouthwestOther (Combined) Counties3.00n/a