Estimating the Costs of Managed Haying or Grazing of CRP

Kansas State University Agricultural Experiment Station and Cooperative Extension Service Previously, the release of Conservation Reserve Program (CRP) acres for emergency haying and grazing was a result of drought conditions. Under new program rules, haying and grazing is now allowed on eligible acres regardless of moisture conditions under managed haying and grazing. Managed haying and grazing allows a given acre of CRP to be hayed or grazed once every 3 years and is one of several management tools used by the Natural Resource Conservation Service (NRCS) and contract holders to help diversify stands of grass for improved wildlife habitat. There are specific rules for managed haying and grazing of CRP acres. Contract holders are assessed a 25 percent reduction in their annual CRP payment for all acres that are used for managed haying or grazing. Under emergency haying and grazing, the amount of forage that could be harvested by haying or grazing was limited to 50 or 25 percent. Under managed haying and grazing, the amount of harvested grass is determined by a forage management plan designed by NRCS. CRP contract holders are required to limit haying or grazing to specific dates to avoid disruption of the nesting season for upland birds. To understand the rules governing managed haying and grazing of CRP, consider the following example: a 100-acre CRP field with an annual rental rate of $40 per acre (total annual rent of $4,000). Under managed haying or grazing, a producer would sacrifice 25 percent of the rent on all acres used for haying or grazing, resulting in a total rent of $3,000 ($30 per acre in contract) for the right to hay or graze all 100 acres. The amount of forage that can be harvested by haying or grazing depends on the forage management plan of the contract holder. For the examples listed in this publication, the amount that can be harvested for both haying and grazing is assumed to be 100 percent. However, the formulas presented allow for varying harvest rates. To decide whether or not they should hay or graze CRP acres, producers should compare the cost of haying or grazing CRP with their alternatives. The typical alternative would be purchasing hay or leasing private land for haying or grazing. It is important that production units are consistent when comparing this calculated cost to an alternative. The 25-percent reduction in the CRP contract payment assessed for managed haying or grazing implies the cost of haying or grazing CRP land will be a function of the CRP rental rate. County-average CRP rental Estimating the Costs of Managed Haying or Grazing of CRP