Land differs from livestock
When young people are getting started in agriculture, the question of where to start first is a top concern.
“Once a person decides they want to be in the ranching business, the first thing to ask is, ‘If I go buy a cow today, where would she go?’” says UW Extension Educator Dallas Mount. “There are many options.”
Land versus livestock
While there are many options for getting started in agriculture, Mount cautions young producers against purchasing land in their first year.
Mount adds, “The first important concept is separating the land from the operating business.”
Mount notes that young producers must realize that just because they want to be in the livestock business doesn’t mean they must own land.
“It is important to separate the land business from the operating business,” he continues. “Producers can’t buy cows and buy land and think the money from the calves will support both enterprises.”
The fundamental idea, he explains is that the cows should pay for themselves and be treated separately from land.
“If I was doing an analysis on an existing ranch that has both land and cattle, we would separate those businesses,” Mount explains. “The land business is more of an investment. It is critical to let young people starting out know that they can be in the cow business, and they don’t have to buy a million dollar ranch to do it.”
Even though producers require land to raise cattle, there are several other options.
“There are places to lease land and opportunities for partnerships,” says Mount, describing several options for producers. “The most common option is a work-share agreement.”
In a work-share agreement, a young producer cares for a ranch’s cattle. Under the agreement, the young producer is also allowed the opportunity to run his or her own small herd alongside the ranch herd.
“Work-shares are the most common type of arrangement,” says Mount.
Another option for young people in a cash lease agreement.
“In a cash lease agreement, producers may pay based on the animal unit,” he explains. “There is always a market for cash leases, and it varies across Wyoming.”
Depending on the grass, water and maintenance arrangements, Mount notes that the going rate for cash lease agreements is typically between $20 and $30 per animal unit month (AUM).
“Variations depend on who takes care of fences, who takes care of the cattle and other management activities,” says Mount. “It also depends on location.”
The other option is a flat cash lease, in which a producer leases a ranch for a flat fee, whether they run 10 or 200 pairs.
“It becomes the young person’s job to know how much the ranch will produce and manage it accordingly,” says Mount. “These agreements are less common.”
Rather than starting with a flat cash lease, he says that many people work into them as they become more reliable and build a relationship.
“For example, if a producer has an existing cash lease and the landowner wants a more dependable source of income, they might work into a flat cash lease,” he continues.
After deciding how many cattle a producer needs to support themselves, producers must begin searching for land.
“For most people, I think personal contacts will be the most helpful,” says Mount. “If a producer knows someone and mentions they are looking for land, they know someone else, who knows someone else who has land.”
The connections within a producer’s network in the ag industry will be very important for young people attempting to get started.
“It is very rare that someone would call a contact and simply ask to bring 100 cows to run on their land,” says Mount. “The landowner is going to be worried about how the young person may take care of the land.”
In the beginning, Mount also notes that finding land isn’t always easy.
“It might start where a young producer may run for three months in one place, winter in another and find an opportunity for land in the spring for another,” says Mount. “There might be a lot of scrambling to find land, but when a producer is getting started, that is how it is.”
Getting started in ag
As the age of the average farmer and rancher creeps steadily upward, producers across the U.S. wonder who will be responsible for growing our food in the next decades.
At the same time, young people across the West are interested in getting started on their own operations, but they frequently find challenges in getting started.
This series aims to provide information to young people on how to get started in agriculture. The series will discuss land and cattle, finance, economics and programs that can help beginning farmers and ranchers to get a leg up.