Leased Land ?

[BubbaG]

I ran across an ad for pasture lease and full care, up to 300 head, for 1/2 calf share. So that got me thinking and questions came from that.
1) Is that a typical deal (good/bad/average). (Let's assume that the people know what they are doing and we get good legal documents done)

OK the real question is this. Why won't this work (or will it)? It seems unlikely to be this easy-hence the question.
2) I buy 40 head (assume the calves are 50/50). Next year I keep 20 heifers and they get their 20. End of year 1 I have 60.
End of year 2 I have 90. End of year 3, I have 135. End of year 4 I have 200. End of year 5 I replace the 1/2 the mommas with calves still have 200.

I don't need any money out of the cattle operation (for 5 years +) and can payoff or cash the 100k+ to get started. Let's grow it 1 more year and keep 300 head going. At that point I sell 150 each year
Landowner is making good money 100k+, I'm making good money. Even if beef cuts in half--still pretty good yield on original 100k investment.

Thanks for the input.

 

[Craig Miller]

Your paying too much for paature rent

 

[Toad]

So they do all the work? Make hay, feed hay, do all the work in calving season, handle all sickness and vet bills, pay all costs except the initial cost of the cows? If you just drop off the cows and leave maybe that makes sense, if not you are nuts.

 

[Bigfoot]

It'd be easier to marry a girl who's daddy had a lot of land. My plan may not work for you, but financially it's fool proof.

 

[Brute 23]

If I understand it correctly your expenses would have to be less than 50% of the gross calf sales for you to make money. On a $600 calf you'd have to spend less than $300 per head to produce it. That would be pretty tough IMO.

Seems like a great deal for them though.

If they are negotiable a 30-40% cut might work.

 

[BubbaG]

Let me clarify a little.
I don't lift a finger or write another check. They take care of all the work and the bills...vets, feed, transporting, insurance, etc...

I buy the cows and get 1/2 the calves and they get 1/2.

Still a bad deal?

 

[jerry27150]

your forgetting all the losses from death , breeding failure & culling due to poor performance. if they are feeding & caring for 365 days might be alright. may not get many heifers if that is what you want

 

[Angus Cowman]

Another thing is your math dont work on the expansion of your herd
#1 1/2 of the calves may or may not be hfrs and MAYBE only 1/3 of the hfrs will be replacement quality

#2 even if you had 50% hfrs a yr you would get No return on them hfrs for 2 yrs

 

[Kingfisher]

Only thing good about this deal is 70 acres for 1400$. I wonder if it has any deer?

 

[Brute 23]

Let me clarify a little.
I don't lift a finger or write another check. They take care of all the work and the bills...vets, feed, transporting, insurance, etc...

I buy the cows and get 1/2 the calves and they get 1/2.

Still a bad deal?

It doesn't make sense. Now that deal is too good to be true. I don't see how they can pay all the expenses and only take 1/2.

There just isn't enough margin in cattle to do a 1/2 and 1/2 deal like that. If your lucky... your expenses are 80-90% of the calves gross sales.

I must be missing some thing. :???:

 

[Tim/South]

The math seems wrong to me.
Say you split the calves on 40 head. You add 20 heifers. Those extra 20 now become part of the herd. Once the 60 cows calve, half of those will belong to the land owner/care taker, 30 each. They are not going to raise and tend to the heifers until they calf for free.
You are only getting 1/2 of your crop. The other person is getting 100% of theirs. Plus they are getting the more valuable bull calves each year.

 

[bigbull338]

the only 1 making any money is the 1 providing the full care.the man providing the cows is the 1 loosing his shirt.heres why as cattlemen providing the full care provides all the salt minerals meds hay protine tubbs.all of that can get costly for 2 reasons hay fed year round along with tubbs.i also forgot full care is $60 to $90 a hd a month or or $720 to $900 a cow pre year.so wheres your profit comming from.

 

[RMCDUFFEE]

With Leases the devil is always in the details. Here is a good article in Beef Magazine about Leases: http://beefmagazine.com/blog/3-steps-ne ... -cow-lease

In the article the author believes a 40/60 (40% to the owner, 60% to the Rancher) is a equitable split. The one part of your plan that may need some analysis is that the replacement heifers would run for free. Since you won't see any income from them until they are 2 year olds it would seem unlikely the rancher would be willing to feed them for free for you until then. I personally would like to see the vaccination and vet protocol spelled out in the lease. That just assures the rancher doesn't try to cut corners that will cost you in the long run.