dun":1h3qjltd said:
We're just renting out pasture for much the same reason.
I like Dun's answer best.
I've never been one to get "in and out" and try to outguess the cattle market. Especially at this time of record cattle prices, things can go downhill by this fall.
IMO there is a lot of similarity between investing in livestock and investing in the Wall Street stock market. In the short term, a person can possibly make a killing. OTOH, in excess a person could go broke.
My strategy for both livestock and Wall St stock is to buy quality, hold for the long term, and likely be financially rewarded down the road.
I have 60, possibly a few more pairs coming soon for summer. On average, it takes 15 acres to graze a pair for a 5 month grazing season.
Calves will be gone in late October or early November. Depending on weather, cows will possibly stay until after Christmas.
I always tell the guy to use his own judgement and take the cows home when he thinks it is no longer worth it. 4" of light snow is not a problem for grazing cows but the pasture is tough to get to if wind drifts the road shut. When it's cold enough to make the 12' tire tanks ice over, the ice has to be chopped every day.
Pasture "here" brings in around $30/AUM. I don't charge for bulls which are pulled after breeding. My renter takes care of the fence with supplies I provide. I pay the electric bill for the water system.
When calves are on the cows, each month is paid in advance. After the calves leave, pasture is paid at the end of the month. Works for us.
Renting out the pasture might not be as lucrative as owning cattle right now, but OTOH with reliable renters who pay on time your friend won't go in the hole either. Your friend will have some nice cash flow going through the grazing season. :2cents: