Document Type


Publication Date



pasture lease, rental rates, agricultural economics, agriculture marketings

Extension Number

ExEx 5071




Any lease is basically an agreement that gives the use of an asset to a lessee for a specific period of time at a specified rate. A lease does not transfer title of ownership nor an equity interest in the asset. Labeling a document as a lease does not necessarily mean it is a lease according to the Internal Revenue Service (IRS). This Extension Extra does not address any of the questions concerning the IRS treatment of a lease; if you have such questions, contact your tax management professional. Also, this document does not address any of the questions concerning the legalities of the lease which should be handled by professional legal counsel. Unlike cash and share rental arrangements for cropland, the terms of pasture rental arrangements can vary substantially. You can consult other publications in this series or go to the publication C271, South Dakota Agricultural Land Market Trends 1991-2006, on the internet at Be cautioned that adjustments should be made to current market rental rates to account for differences in productivity of the land, use of improvements, and other factors of the rental arrangement. Adjustments to reported rental rates are important since the quality of pastureland varies widely. An arrangement used by a farmer for improved pasture likely is not appropriate for a neighbor who has unimproved pasture partially covered in brush and trees. Pasture rental rates and terms thus may vary widely within the same locale yet still be acceptable to both landlord and tenant.