Expanding the herd

[sassafras manor]

Good morning, we are planning to expand the herd with financial help from my parents as investors. What would be a fair method to pay them back in regards to percentages of the calf crop over what period of time? Also how does the salvage value of the cow come in to play? Thanks

 

[BC]

Set it up like a loan to be paid back with yearly payments. Pay out over a 3 to 4 year period. Pay your folks interest on their money.

 

[ClinchValley86]

As a typical loan. Keep it simple. Agree to an interest rate and make the payments.

Can be done a couple different ways. Pay them when you sell calves, or monthly, or however yall could agree.

Salvage value of a cow... what do you mean? You could use the money from a culled cow to buy a replacement or pay down the loan.

 

[Warren Allison]

If they are investors, then they would own a percentage of the business, and receive a percentage of the net income each year. Paying them back, interest etc., would be if they were loaning you the money , not investing.

 

[Silver]

Investing sounds like a 'on shares' situation. Around here a share deal is generally in the area of 2/3's to you (you paying all expenses), 1/3 of annual calf crop to the investor.

 

[wbvs58]

How many cows do you have now and how many are you aiming for?
I know some of you think this is a rude question but the answer may help us to give advice.

Ken

 

[sassafras manor]

How many cows do you have now and how many are you aiming for?
I know some of you think this is a rude question but the answer may help us to give advice.

Ken

Ken, you have my respect so no worries. We had 7 head and sold calves and 4 bred cows this past week. We are changing breeds with the hopes of increasing the herd to 12 to 15 in the next year or so. We have been renting bulls from a neighbor for the past 10 years and plan to add our own herd bull at some point soon.

 

[Josher]

I would rather stay away from calf share if possible just too many variables. I'd suggest a loan instead. If u just come up with a price per animal and figure out term of the loan your both happy with. Here the longest loan u can get on cows is 5 year. And add interest. Done.

 

[wbvs58]

Ken, you have my respect so no worries. We had 7 head and sold calves and 4 bred cows this past week. We are changing breeds with the hopes of increasing the herd to 12 to 15 in the next year or so. We have been renting bulls from a neighbor for the past 10 years and plan to add our own herd bull at some point soon.

Fair enough, I was just wondering whether some other strategy such as an AI program might be a suitable strategy to breed up to what you want however cashing in the existing have then buying in good quality of the breed you are after is a faster strategy and probably pay dividends in the future. All the best with your purchases.

Ken