Renting pasture & cows

[callmefence]

http://extension.missouri.edu/aginfocus/Jan2014-feed-cost.aspx
http://beefmagazine.com/cow-calf/what-s ... t-keep-cow

Here's a couple of samples of how much it cost to carry a cow. Somewhere between the two is the sweet spot. IMO

Correct me if I'm wrong I think those are including land / feed cost.
30 cows on 150 acres of good country should require very little feed. And that cost is included in the 3500.00

I agree it's basically leasing the land with the cows thrown in.

 

[callmefence]

How much can you lease land for in your area? Seems like the old boy is leasing the land and just throwing the cows in. You can't find fenced pasture here for less than $25.00 per acre.

It will go 7 to 20 dollars here.
I have a 500 acre pasture I pay 7.00 on . Never run over about 20 head on it. Usually get buy feeding zero hay. Maybe some tubs in the winter. Haven't penciled it , But should be well under 300 per head.

 

[Supa Dexta]

I ask with due respect. How in the world do you figure 500 a cow.?
If the place is understocked

Because its a middle of the road figure. Some say they can run cattle for 300 a yr and others say its closer to 800.. Just throwing out bare basics numbers on the deal.

 

[ChrisB]

But as CMF stated, the majority of that 300-800 per year to keep a cow is feed and pasture. He's covering most of his feed and all of the pasture for $110/head. I don't know how much hay he will feed or the cost of hay in his area, but I'm guessing his costs will be closer to the $300 end of the spectrum. So I would think you could drop 6500 off Supa Dexta's numbers and the break even would be around 550. But I would add another heifer calf or two for replacements and figure a 90% calf crop myself. So 29 calves, 4 replacements, = 25 sold. So maybe a $600 break even. But also don't forget the income from the cull cows too.

 

[TexasBred]

Never rented any beef cows but use to rent a young man dairy cattle for $2 a head per day. If one of them needed culling for any reason he hauled it to the sale barn and sold it in my name and I'd let him pick up a fresh replacement. He was responsible for all feeding, upkeep, meds and deaths but got the milk and a calf every year as income. You can figure out his cost.

 

[midTN_Brangusman]

Be hard to lose at that price! Cost $5,000 plus just to lease the land without the cows in my country.

 

[bigbull338]

thats a strange deal to me.if anything it would be best to buy the cows and lease the land.

 

[callmefence]

Maybe his angle in keeping ownership is to let someone else maintain the herd while cattle are on a low swing
End the lease if there is a boom. Either take over or liquidate the herd.
Shrewd businessman maybe. As long as you have lease written properly it's still a good deal.

 

[rollinhills]

I think he is a really good business man. He is locking in a rate of return and the value of his herd with little risk.

There are 3 benefits to cattle in my mind.
1) the value of the cattle herd
2) maintaining or improving the land they are on
3) the revenue from them

With this deal you have lost 2 of the 3 and the only benefit will be the revenue left after rent. IF there is a little money to be made it will probably not be worth the hassle.

I under stand what you are saying, I was thinking that I could put my cows on one of the pastures and increase my herd, the big thing its just across the road from my place. The pasture is under stocked as of now.

Got ya. If that is the case then I would jump on it.

How many cows did the former farmer have on it?

The current farmer has about 25 or so of his running there also

 

[jerry27150]

I see no way you could lose, if it was near me I would have it

 

[farmerjan]

Maybe his angle in keeping ownership is to let someone else maintain the herd while cattle are on a low swing
End the lease if there is a boom. Either take over or liquidate the herd.
Shrewd businessman maybe. As long as you have lease written properly it's still a good deal.

Why end the lease if there is a boom? Then the person doing the leasing is coming out way ahead because the calves would be worth more when are sold, and there is no increase in the lease costs. To me, I am of the thought that you are leasing the land and getting the income from any calves sold for free, which would cover the lease cost plus. Around here a minimum of $25 to as much as $40 per acre to rent decent pasture that has fences and water on it. We pay $1,000 a year for 25 acre pastures with all the same requirements; keep up fences, bushhog once a year.... with no cows thrown in to help pay for it. Sure wish it was across the road from us.... If the other farmer was doing it for 20 years and is only giving it up due to his health (cancer) then it had to have been working through the ups and downs.

 

[boondocks]

Isn't another way to look at it what the lessor is getting out of the deal? He's just getting 3500/yr, the status quo on his cows, and some pasture upkeep. As long as the lease is for a period of time that you're happy with....I'd check the fences very well, against the off-chance you put a bunch of work in on them and then he pulls the plug as soon as prices rebound..
My novice 2 pesos....

 

[bball]

This is a fascinating proposition. A few things i keep considering: he wants same number of COWS kept (not necessarily a heifer replacement) If a cow dies, he is going to want a cow back in its place; not wait 2 years on a heifer to produce. Meaning, you will have to purchase a cow should that unfortunate circumstance occur. Now consider the bull. What happens if he comes up lame, or breaks his tool? You replace with a new bull. What are his expectations/stipulations about the cows or bull you are required to replace in an unfortunate event? I would want clarification. That could get pricey depending on his expectations. As several have pointed out, there is potential here. Many positives. I would also be cautious about stocking the pasture too heavily. Fence is on the right track with his example of understocking and not feeding hay/supplements. Not for sure where its located, but a dry year could get real tight if you stock it too heavy. If its close to your place, rotational grazing may be an option to boost productivity/profitability. I would wantto chat with previous renter to find out his input on feeding in winter, drought, replacing cows/bull, etc.

 

[callmefence]

Maybe his angle in keeping ownership is to let someone else maintain the herd while cattle are on a low swing
End the lease if there is a boom. Either take over or liquidate the herd.
Shrewd businessman maybe. As long as you have lease written properly it's still a good deal.

Why end the lease if there is a boom? Then the person doing the leasing is coming out way ahead because the calves would be worth more when are sold, and there is no increase in the lease costs. To me, I am of the thought that you are leasing the land and getting the income from any calves sold for free, which would cover the lease cost plus. Around here a minimum of $25 to as much as $40 per acre to rent decent pasture that has fences and water on it. We pay $1,000 a year for 25 acre pastures with all the same requirements; keep up fences, bushhog once a year.... with no cows thrown in to help pay for it. Sure wish it was across the road from us.... If the other farmer was doing it for 20 years and is only giving it up due to his health (cancer) then it had to have been working through the ups and downs.

Hello Jan . I meant the landlords angle and it was just a thought. . I fully agree great deal.
I was responding to Dex and brute questioning the landlords angle.

Maybe I should have said ." And the landlord ends the lease" I apologize for my poor grammar.

Edit to add. If there is another boom with the ridiculous high prices of last year's. I will consider selling almost out. Had I done so at the high I could buy back in right now x2.

 

[farmerjan]

Maybe his angle in keeping ownership is to let someone else maintain the herd while cattle are on a low swing
End the lease if there is a boom. Either take over or liquidate the herd.
Shrewd businessman maybe. As long as you have lease written properly it's still a good deal.

Why end the lease if there is a boom? Then the person doing the leasing is coming out way ahead because the calves would be worth more when are sold, and there is no increase in the lease costs. To me, I am of the thought that you are leasing the land and getting the income from any calves sold for free, which would cover the lease cost plus. Around here a minimum of $25 to as much as $40 per acre to rent decent pasture that has fences and water on it. We pay $1,000 a year for 25 acre pastures with all the same requirements; keep up fences, bushhog once a year.... with no cows thrown in to help pay for it. Sure wish it was across the road from us.... If the other farmer was doing it for 20 years and is only giving it up due to his health (cancer) then it had to have been working through the ups and downs.

Hello Jan . I meant the landlords angle and it was just a thought. . I fully agree great deal.
I was responding to Dex and brute questioning the landlords angle.

Maybe I should have said ." And the end the lease" I apologize for my poor grammar.

No apologies necessary, I can't see how he could go wrong unless the cows are all ancient great grandma's and not producing any calves, then he would be replacing them all in a year or two. Even then, there would be some cull value. And unless it is mostly scrub, he can run 25 plus cows and still have to do little or no feeding. Maybe the landowner just wants to have some cows that are his and can't take care of them. There's one guy up here who manages a guy's cows, cuz the owner can't due to age/health; and he gets half the calves and has built up a fair herd of his own over the 10 or so years. That'll end as he has gone in a nursing home and the kids are just waiting for him to die so they can sell it and get their money.....HATE THAT.

 

[ez14]

How much can you lease land for in your area? Seems like the old boy is leasing the land and just throwing the cows in. You can't find fenced pasture here for less than $25.00 per acre.

It will go 7 to 20 dollars here.
I have a 500 acre pasture I pay 7.00 on . Never run over about 20 head on it. Usually get buy feeding zero hay. Maybe some tubs in the winter. Haven't penciled it , But should be well under 300 per head.

im not real good at math but for the land it looks like your paying about $175 per head

 

[rollinhills]

The pasture has good grass on it, it need some spraying to get rid of some weeds but for the most part it's in darn good shape. I haven't checked the fences yet but I don't think they are too bad. I will see.

 

[farmerjan]

So "ENQUIRING minds want to know".....What did you do? Did you rent the pasture with the cows??????

 

[Ky cowboy]

I have almost the same deal but instead of cash rent he gets half the calfs my half is made up of all the heifers which I get to keep on the place. I also am in charge of bull purchase mainly bc his was junk. I do good on the deal but have no long term lease or a lease in writing at all, it's all on a hand shake, soon to be in writing though

 

[rollinhills]

So "ENQUIRING minds want to know".....What did you do? Did you rent the pasture with the cows??????

Yes we made a deal with him we are going to take over somewhere around thanksgiving. The current farmer has to come up with another bull, and I have a registered angus yearling that I am going to trade for a bunch of gates, a tub and other handling equipment. Haven't figured it all out just yet but I think I may have got lucky for a change. The famer and the land owner both are really good people. the land owner is getting a contract drawn up.