By Andi Anderson
As stocker cattle prices reach record highs in 2025, cattle backgrounders face shrinking profit margins. With increased upfront costs, such as high-priced 500-pound steers, custom grazing may become a better option for pasture owners looking to manage forage while earning income.
But how do you calculate a fair custom grazing rate? There are a few key methods to determine a reasonable fee:
1. Forage Quality and Hay Cost Method:
This system bases the pasture rate on hay value and pasture quality. The formula:
Animal Units × Hay Price/Ton × Pasture Quality Factor = Monthly Rate Per Head
For instance, grazing a 500-pound stocker calf (0.60 animal units) on average pasture with hay valued at $200/ton and a 0.15 quality factor yields:
0.60 × $200 × 0.15 = $18 per head per month (before adding management costs)
2. Gain-Based Method:
Here, the pasture fee is calculated based on weight gain over the season.
Monthly Rate × Months Grazed = Total Seasonal Cost
Seasonal Cost ÷ Pounds Gained = Cost of Gain
Example: A $18/month fee over six months equals $108. If the calf gains 200 pounds, the cost of gain is:
$108 ÷ 200 = $0.54 per pound gained
3. Adding Management Costs:
Time spent rotating pastures, feeding supplements, or treating sick animals also adds value. The Oklahoma State University enterprise budget recommends valuing labor at $19.50/hour. First-time custom grazers should track hours worked, while experienced grazers may prefer a flat daily rate per head.
Ultimately, custom grazing can provide an efficient use of pasture during a tough financial year, but calculating a fair and sustainable rate requires understanding feed value, expected gains, and time invested.
Photo Credit: istock-dusanpetkovic
Categories: Ohio, General, Livestock