I have been shuffling around ideas for building a herd while I'm in the Army so that when I retire I can take over the operation and have the income from that supplement the retirement from the military. My thought is to do a long term (around 10 years)cash-cow/cow-calf lease where I buy the cattle, and someone else does the operating. Ideally someone who already has a decent herd that I can either add to, or buy a portion of. I would put up the cost of cow-calf ownership and absorb the cost of death/disease etc. They would cover the operating costs/inputs and sale of the calves. I get a portion of the profit and they would get the rest. I would like to start with 4-5 probably and buy 3-10 each subsequent year depending on profits and how much I have been able to set aside from our current income. When I retire, or if I am stationed somewhere where I plan on retiring, I would transfer the cattle to the new property and take over the operating too (again that's probably around 10 years out) Does anyone have experience in that kind of thing or have any advice? I am going to end up in Texas or Kansas most likely, so I would want to do the lease somewhere in the Midwest so that I'm not driving from coast to coast with cattle 10 years from now (currently stationed in Colorado). I have no experience in this kind of agreement, so any help, advice and resources would be appreciated. I know that I need a pretty detailed agreement with everything in writing. I grew up doing cow-calf operating and backgrounding with mostly Herford-angus crosses, but I am open to other breeds. The most important thing to me is finding someone who has a good track record and good breeding/care practices with their herd. Any thoughts on how to go about starting something like that or what percentage of the profit is fair? Also if there is anyone on here interested in something like that I would definitely be open to discussion. Thanks for the advice!
Cow-Calf leasing
- Thread starter Jafruech
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Prob not what you want to hear but I'd recommend saving your money until you get out and then buying the cattle and land when you are settled. Your idea sounds like too big of a headache for little to no reward.
Prob not what you want to hear but I'd recommend saving your money until you get out and then buying the cattle and land when you are settled. Your idea sounds like too big of a headache for little to no reward.
backhoeboogie
Well-known member
There are places that have ag exemptions for property tax. THey want to keep cattle on that property simply to maintain their exemption status. If they know you well, trust you, they may offer a good deal.
poorfarmer
Well-known member
I don't have any experience with the type of agreement you are proposing. Doesn't mean it can't work. I think for the most part cattle farmers are looking to make deals for land which is harder to find. If you knew where you were going to live and were able to buy land, I bet you could easily work out a deal with a local farmer to run a herd together on the land. I think your proposal might be attractive to a young farmer starting out, which has acquired some land and doesn't have the finances to fully stock the property. As far as percentages if I was coming up with an agreement with you I would base it on what each of us had invested, which could change year to year. I would compare the amount you have invested in cattle, to the amount the farmer has in the land to run your cattle. If you have $40,000 invested in 20 head and the land to run them cost the farmer $80,000 then I would think you getting a 1/3 and him getting 2/3 of the profit would be fair, I think it depends on the investment. I would also like to hear if anyone else has experience with these type of deals.
Lazy M":r086iwsd said:
I had thought of that but I believe there are some benefits of doing it spread out vs all at once. Inflation is one. If I can buy as I go and then retain/buyout some of the heifers each year to grow the herd that is a lot cheaper than trying to buy them all outright. Especially if the market goes crazy high. Also it would give me the chance to buy more on the years when the prices are lower. The profits might not be much, but what I make I can "roll over" to buy more cattle and grow. Not counting my initial investment, I should have some money from the sales every year to grow the herd...on good years more than bad obviously...just my thoughts. What do you think?
First thank you for your service .. buying cattle is like buying gold .. you buy when the price is low and sell when it's high.. if it were me I'd watch the gold market and spend my money on gold .. everytime u would had planned to buy cows buy gold .. then when u retire wait until the market is up and sell the gold to buy cows.. gold doesn't die or lose calves etc..
M-5
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In the late 90s me and my brother did a similar deal . we would take possession of 30 bred cows. We would calve them out and run them on our place till fall. We got half of the calf crop. Next spring same deal. Did it for about 4 yrs. It was an easy deal and some decent side cash.
Sir:
The cow lease is a common practice here in Montana but you will not find many successful ranchers who will engage in the practice. It is better if a rancher has pasture to buy cattle and stock his pasture than lease.
Moreover, in my area only the poorer rancher will accept lease cattle.
It will be a sour deal with law suits frequent. Very risky.
ly
The cow lease is a common practice here in Montana but you will not find many successful ranchers who will engage in the practice. It is better if a rancher has pasture to buy cattle and stock his pasture than lease.
Moreover, in my area only the poorer rancher will accept lease cattle.
It will be a sour deal with law suits frequent. Very risky.
ly
