Higher cattle prices have increased the cost of keeping them on Saskatchewan grazing lease by 74 percent this year.
The fees on provincial crown land are based on a formula tied to market prices in the previous October and November.
This year’s lease rate is increasing to $11.19 per animal unit month from $6.42 because prices rose so dramatically last year.
Wally Hoehn, executive director of the agriculture ministry’s lands branch, said the increase should not be a surprise to lessees.
He said the ministry did preliminary calculations early last fall and began to prepare producers for a large increase.
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“Typically when community pastures start emptying the prices go down, but this year the fall cattle run was pretty strong and in some cases the prices went up a bit and so that’s what pushed it to that $11.19 per AUM,” Hoehn said.
He said there has been confusion among patrons of different types of grazing land about to whom the $11.19 applies.
It includes users of crown grazing lease and the former federal pastures that have already switched to producer control.
The Saskatchewan Pastures Program and the federal pastures that haven’t yet switched also rent to producers but operate differently.
Hoehn said the Saskatchewan Pastures Program is not formula driven.
“It’s just established based on trying to get as close as possible to cost recovery,” he said.
That rate is 66 cents per day per adult and $35 per season for calves.
He said the federal pastures are raising their rates to match those figures.
“One difference is in our SPP system we charge the taxes from each pasture directly back to the patrons for that pasture, whereas in the federal system there’s another government agency that actually makes a payment in lieu of those taxes, and so those aren’t charged back to the patrons,” he said.
Hoehn said the crown lease rate works out to 51 cents per day per pair, but lessees also have the extra costs of labour, maintenance and taxes.
Producers appreciate that the formula reacts to the market, he added. If prices drop next year, he said, so too will the rates.
For example, the fee was $3.93 per AUM in 2008 following the BSE crisis and remained frozen in 2009 and 2010.
