Compensation for a cow/calf operation with a manager

[Bigdog13]

I have used the search function and cannot find this posted anywhere. I grew up spending my summers on our family ranch and it has become my responsibility. Its been in my family for almost 100 years and has been rented out lately but its mostly ready to go save a few minor things.

I am buying my first herd (starting small 30 head or so)and basically just providing all the money, resources, land, equipment, etc and have someone who is going to do a majority of the work. I might help out occasionally but I do not live on site. His requirements will be all the day to day stuff, hay is fed in my area about 4 months out of the year. Tend to any sick cows, vaccinations, organize someone to cut hay 1-3 times a year depending on rain and fertilizer and just checking on them.

What type of pay should the manager receive? It cannot be based on hours and has to be based on distribution of calf sales. I'd like to make this worthwhile for him as he makes a nice comfortable living and is doing this for just extra money.

I might also add that I have hopes of making this a good size operation over the next 10-20 years or so, in my early 30's right now. I have been blessed with a job that currently gives me a decent amount of disposable income and will hopefully allow me to buy land and cattle in future and any money I gather from this (if any) I plan on just reinvesting in the operation.

I appreciate any help or suggestions given by people.

 

[cowboy43]

30 cows x $1500 per calf equals $45000 income, would make fair salary, all other expenses would come out of your pocket. :2cents:

 

[denvermartinfarms]

With only 30 cows I don't think you can afford to pay someone enough to get them to do all your expecting and leave anything for you to put back in to it. After the normal expenses you would have if you did all the work yourself I think your only going to have about 30k a year profit at best from the cattle, then your machinery Cost's, fence repair and every other thing that a farm requires. Your wanting someone to put up 1 to 3 cuttings of hay, work the herd 2 times a year, set hay out for 4 months, check on them sevarel times a week year round and doctor any sick animals.

I'm not saying it will cost you 30k a year to get someone to do that, but I don't think you'll get it done for any less than 20k a year. You may way to wait until you can be paying them to take care of more than 30 head before you get this started.

 

[jerry27150]

what was his suggestion for money, I would think 1/2 the calf crop

 

[Hook]

Percentage of the calf crop with expenses coming out of your share.

 

[denvermartinfarms]

what was his suggestion for money, I would think 1/2 the calf crop

That's close to my figure. And a fair way to look at it, one guys puts all the money in and another puts all the work in, it has to be worth half to the guy doing the work.

 

[denvermartinfarms]

40% of the calves at sale time, he takes his free and clear. That is going to give him about 18k. I don't see any qualified person doing it for any less.

 

[Nesikep]

Your cattle, his herd to manage.. He gets 100% of the calf crop after retaining X% of heifers, and pays the expenses directly related to raising them, fuel, bale twine, salt, minerals, vaccines.
Depreciation of machinery is on you, as is the monetary cost of improvements like new fences, corrals, etc, he puts the time in to install them. Repairs on equipment are split somehow. You can also include a flat rate for which he 'leases' the land and cows from you... Lets say $10,000/year

The way I look at it is it gives good motivation for a successful calf crop, You don't get money out of it, but you have it well run until you can take it over. Repairs costs being split ensures equipment doesn't get beat to death, promotes fixing it rather than bringing it to the dealer to fix, but also protects him from having to fix stuff that might not have been his fault.

So lets say the income is $40,000 after retaining some heifers, he pays $10,000 for the 'lease', and about $5,000 in fuel, bale twine, and salt, etc., leaving $25,000 for him.. I think that's pretty fair, meanwhile the $10,000 lease income for you will probably just even out the costs of your share of repairs and have some left over for the 'improvements'. Depending on how he does the job, if there's anything left over from the $10,000 just give it back to him.

If you don't make it attractive for someone, you'll have a revolving door of people, each one inheriting problems the other one created, which will finally be yours when you take it over.

 

[Angus Cowman]

Your cattle, his herd to manage.. He gets 100% of the calf crop after retaining X% of heifers, and pays the expenses directly related to raising them, fuel, bale twine, salt, minerals, vaccines.
Depreciation of machinery is on you, as is the monetary cost of improvements like new fences, corrals, etc, he puts the time in to install them. Repairs on equipment are split somehow. You can also include a flat rate for which he 'leases' the land and cows from you... Lets say $10,000/year

The way I look at it is it gives good motivation for a successful calf crop, You don't get money out of it, but you have it well run until you can take it over. Repairs costs being split ensures equipment doesn't get beat to death, promotes fixing it rather than bringing it to the dealer to fix, but also protects him from having to fix stuff that might not have been his fault.

So lets say the income is $40,000 after retaining some heifers, he pays $10,000 for the 'lease', and about $5,000 in fuel, bale twine, and salt, etc., leaving $25,000 for him.. I think that's pretty fair, meanwhile the $10,000 lease income for you will probably just even out the costs of your share of repairs and have some left over for the 'improvements'. Depending on how he does the job, if there's anything left over from the $10,000 just give it back to him.

If you don't make it attractive for someone, you'll have a revolving door of people, each one inheriting problems the other one created, which will finally be yours when you take it over.

Way too complicated the way your trying to break everything up
With 30 cows and an absentee owner it should pay $20 to $30k with owner supplying everything
Because you and I both know that the owner will always want more work done than is necessary

 

[Angus Cowman]

Where is this located at ? ThT makes lots of difference in price and amount of work required also

 

[Nesikep]

If it's too simple, someone will get screwed in the end too. I came up with a way that should give right around what you said is fair, but some protection for both parties.

it is true that location plays a large role in how much work 30 cows will be..

 

[branguscowgirl]

Is there a place for him to live on the ranch? If you are providing the home, that also needs to be figured into the compensation......

 

[denvermartinfarms]

No matter how it's figured it looks like we all agree so far that 20k is the low end and about 20 to 30k is the right range.

 

[bse]

I suppose i dont know much about cattle so my labor is cheap, I did it for 15% of calves, If i understand this right its just a little extra income for a part time job, Id like to work part time for some of you folks.
I checked cows about twice a week,little more when calving, put out hay when needed, and worked them twice a year, so 30 head about 4 hours on 2 saturdays, made about $200 a week for very little actual time.
said arrange for someone to cut hay so a few phone calls.
If it grows to where it is a full time job more would be required for sure.

 

[OldCowhand]

Where is the farm located? How rural/urban? Many, Many variables.

 

[cowboy43]

I re-read his post, I mis-understood the first time I read, thinking he was wanting a full time employee, he is only wanting a part time employee, I think $500 to $1000 a month would be sufficient for what he is wanting. To hire labor to help work cattle will cost $100 a day minumin.

 

[Brute 23]

Your area will effect things the most followed by how far you live away. 30 cows barely needs a part time person.

I have a couple guys that help pick up the slack on things I just can't get to. They get 12$ an hour or an agreed flat rate if it's things like hauling cattle.

If you contract out fence work, most tractor work, spraying, ect it just leaves some day to day feeding and checking on. With a little thought and planning it's nothing you and a good neighbor shouldn't be able to handle.

We got places that go 2 or 3 weeks with out any one checking on. Even now through the winter it's only once a week.

I would not even be considering sharing any percentage of a calf crop. All you need is a person who can count, put out hay, check water, and call if some thing is wrong.

 

[Bigdog13]

First off I truly appreciate the ideas people have thrown out and thought put into this. Location is in east TX, all land is connected, cross fenced, excellent corral, water, all land/equipment is 100% debt free. We get about 1 cow per 2.5-5 acres in the area , depending on pasture, if you fertilize and most importantly rainfall. Yes, it is a total part-time job. The gentleman who I have a handshake deal with has a good job and he is just doing this for some extra income. I do not live anywhere close, as this a vacation place for me, so if there is a sick cow, feeding those are his responsibility's. I spend about 4-6 weeks a year there, when I am at the location, no need for him to do anything. Sounds to me like somewhere around 30%-50% income of the gross calf crop each year would be a in the neighborhood of a fair deal, making it worthwhile for him and gives me enough left over to add a few extra dollars to my pocket.

As I might have mentioned, I do not need any money from this for my yearly income and have intentions of adding about 20K a year or so to the operation to buy/lease more land/cattle but need to get my feet wet for a few years before I go all in.

 

[cowboy43]

Wish you were my neighbor ,I'd jump on that deal quick.

 

[backhoeboogie]

A percentage of the calf crop gives him a stake in the quality of the animal's health. More surviving calves mean more income. Healthy calves mean more income. Etc.