Why Investors Don’t Buy Pastureland

SUMMARY

Pastureland values have risen to $10,000–$12,000 per pair in Saskatchewan, yet outside investors continue to avoid it. Unlike cropland, pasture doesn’t function as a passive investment—returns are lower, risk is shared with tenants, and performance depends entirely on cattle, water, infrastructure, and management. This article explains why investors rarely buy pasture and why true long-term value rests with producers who rely on grass for feed security, efficiency, and succession.

Featured In: Saskatchewan Stock Growers Association – Beef Business Magazine (November 2025 Edition, Page 28)

In November 2023, I explored how pastureland could be valued based on its productive capacity, using the $10,000 per cow-calf pair benchmark as a guideline. Since then, prices have continued to move higher. Today, many transactions fall in the $10,000 to $12,000 per pair range. Still, I hesitate to call $12,000 the new benchmark. The $10,000 figure remains a reliable baseline, while $12,000 reflects premium situations where block size, water, and location push values above the average.
So why, despite these strong values, do outside investors rarely buy pastureland? The answer is simple: pastureland doesn’t behave like a passive investment. It requires cattle, management, and risk-sharing, things most investors want no part of.

1. The Return Gap
Grain land typically generates around 3.0–3.5% annual cash rent return. Pastureland doesn’t stack up.
At today’s values of $10,000–$12,000 per pair:
• Renting pasture at $1.50/pair/day for 150–180 days yields $225–$270 per pair.
• That equates to a 2.25–2.7% return at $10,000 per pair, and only 1.9–2.25% if you paid $12,000.
For an investor, that’s a dealbreaker. Why accept more complexity and more risk for less return?

2. Reliance on Tenant Management
Grain landlords measure acres and collect rent. It is very straightforward.
Pasture landlords depend entirely on tenant management:
• How many pairs are stocked?
• For how many days?
• Is rotational grazing used or is the grass hammered?
• Who fixes fences and maintains water systems?
Without cattle on the land, there is no return. That reliance on management makes investors uncomfortable because they can’t easily verify performance.

3. Shared Risk with Tenants
In grain land, tenants shoulder the crop risk while landlords collect steady rent.
In pasture, drought cuts grazing days, and rent often drops with it. Landlords share risk with tenants whether they want to or not. Investors prefer fixed income, not weather-dependent cash flow.

4. Ongoing Maintenance Costs
Pastureland demands more from the landlord:
• Fencing and cross-fencing
• Dugouts, wells, pipelines, and solar pumps
• Corrals and access
• Weed and brush control
These costs either come out of the landlord’s pocket or are negotiated with the tenant. Either way, net returns shrink. Grain land rarely comes with the same level of ongoing maintenance.

5. Market Liquidity
Grain land has a deep buyer pool: many more grain producers and, at present, ample demand from them. That creates a highly liquid market where farmland can change hands quickly and often attracts competition from multiple bidders.
Pastureland, by contrast, has a much narrower market. Most buyers are local cattle producers, often neighbors, which limits demand. That said, pasture can attract producers from outside the province, especially from Alberta, or those willing to relocate within Saskatchewan. But these buyers only consider pasture that is an economic size and attractive enough to justify relocation or satellite ranching. Smaller, fragmented pastures rarely bring that kind of attention.

6. Who Really Buys Pasture? Producers.
While investors shy away, cattle producers know the strategic value of pasture:
• Feed security: Owning pasture reduces exposure to $300/ton hay in a drought.
• Operational efficiency: Pasture blocks that match liner capacity (50, 100, 150 pairs) lower costs and improve margins.
• Succession glue: Pasture provides the next generation with cows to run and a reason to stay engaged.
• Environmental capital: Well-managed grasslands deliver carbon storage, biodiversity, and water management benefits. Programs may soon reward producers directly for these outcomes.

What Producers Want to Know
If I’m selling: Who’s my buyer? Not investors. It’s primarily neighbors or local producers, but there is also a smaller pool of out-of-province buyers and those willing to relocate within Saskatchewan. Still, this market is limited, and competition is not as broad as with grain land. Value hinges on infrastructure, water, fencing, and block size more than speculative demand.
If I’m buying: How do I justify $10,000–$12,000 per pair? Think long-term: feed security, operational scale, and succession value justify paying above what “rental math” suggests.
If I’m leasing: What’s fair? Cash rent is simple but doesn’t account for drought. Animal Unit Month (AUM) leases share forage risk more equitably. Clear agreements on fencing and water save disputes later.
If I’m planning for the future: Where do values go from here? Grain land may level off, but pastureland follows cattle economics. Strong calf prices and shrinking pasture supply suggest stable or rising values in the medium term.

Closing
Pastureland is not an investor’s asset, it’s a producer’s asset. The financial return may look weaker than grain land, but the strategic return is enormous. For cattle producers, owning pasture is about more than a percentage yield; it’s about securing grass, protecting the herd, and keeping the next generation tied to the land.

Written by Tim Hammond, PAg, B.S.A. (1991)
President, CEO, and Broker, Hammond Realty
30+ years specializing in Saskatchewan farmland sales, valuations, leasing, and advisory. Founder of Western Canada’s leading farmland brokerage, with expertise in market analysis, pasture and cropland valuation, and farm transition strategy.