Share cropping cattle. Is this a fair deal?

[RanchMan90]

I would think you could come out better buying the cattle and paying someone for care. I know of a couple outfits that will do it for $25 per cow per month, everything is included in this price. This is how I came about my reasoning for half the calf crop. By giving him 2/3 calf crop your leaving about 15k on the table each year. That would sure help pay those girls off a lot quicker.

1. Buyer paying for care
Assume 100 hd.
100x25x12= $30,000 per year for care and you get 100% calf crop
Assume 95% calf crop
100x.95x700 = $66,500 from calf crop
66,500 - 30,000 = 36,500 profit

2. Buyer receives 1/3 calf crop
Assume 100 hd.
Assume 95% calf crop = app. 30 calves
30x700 = $21,000 from calf crop

3. Buyer receives 1/2 calf crop
Assume 100 hd.
Assume 95% calf crop = app. 47 calves
47x700 = $32,900 from calf crop

Does $25 a month include winter feed, hay, and mineral?

Includes winter wheat grazing and mineral.

That's a great price. I don't know how they do it so cheap over there. I would be happy to pay that.

 

[Craig Miller]

Nope I wouldn't, but then again I am opposed to going into cattle business with anyoneINCLUDING my Dad.

I fixed it for you

My dad and I have done cattle before and we work well together. He has gotten out and I miss having him involved. If he ever wanted back in I would welcome him with open arms.

I'm glad it worked out for you.

 

[cjmc]

Who's land? fencing?

Wait!
This is a GREAT question.

Obviously the other guy who op said is paying 100% of all expenses otherwise op would have mentioned the
$ he receives currently from leasing out his land ect.

He just wants to know... is it fair?
That's how I judged it to be Fair... not great for him, not greedy by the other guy...just mediocre for all... Fair.

Son of a Butch hit the nail on the head. Its 100%, he fences, his land or rented ground. I just buy the cows.

 

[cjmc]

Not going broke is the most important thing.

How will open cows be marketed and replaced, and on who's nickel?

How will dead cows be replaced and on who's nickel?

Who decides when a cow is sold? What if cows are open and you want to sell, but your guy wants to give them another chance? Or vise versa?

What if some heifers get retained? Who's heifers are those?

And a big one ... who decides what cows to buy to start?

...etc.

A suggestion ... you buy the cows and lease them to him for a fixed $ / head / day rate ... he covers feed, mineral, vet, transportation, etc ... and he gets all the calves. Open cows are sold and the money goes to you. Home raised heifers are retained by this guy to replace opens and death loss and they are his cattle.

Set the day rate so you make money regardless of the commodity market.

I'd also consider telling him that you get to pick 2-5 of the best bull calves to keep back as home raised bulls to replace the bought bulls so as to reduce your cost. If your selection criteria is good, the herd will get better and you'll save money.

Open cows will be sold at the barn, I get the money. If a cow dies because he wasn't taking care of them he pays me the going rate for a cull cow & I buy a new cow to replace her. I make all decisions on what heifers to keep, what cows to buy when to sell cows. I decide on what cows to buy at the start.

 

[littletom]

Get everything in writing make it all legal. And What happens when someone wants out. And what happens if one of you die.

 

[WalnutCrest]

Not going broke is the most important thing.

How will open cows be marketed and replaced, and on who's nickel?

How will dead cows be replaced and on who's nickel?

Who decides when a cow is sold? What if cows are open and you want to sell, but your guy wants to give them another chance? Or vise versa?

What if some heifers get retained? Who's heifers are those?

And a big one ... who decides what cows to buy to start?

...etc.

A suggestion ... you buy the cows and lease them to him for a fixed $ / head / day rate ... he covers feed, mineral, vet, transportation, etc ... and he gets all the calves. Open cows are sold and the money goes to you. Home raised heifers are retained by this guy to replace opens and death loss and they are his cattle.

Set the day rate so you make money regardless of the commodity market.

I'd also consider telling him that you get to pick 2-5 of the best bull calves to keep back as home raised bulls to replace the bought bulls so as to reduce your cost. If your selection criteria is good, the herd will get better and you'll save money.

Open cows will be sold at the barn, I get the money. If a cow dies because he wasn't taking care of them he pays me the going rate for a cull cow & I buy a new cow to replace her. I make all decisions on what heifers to keep, what cows to buy when to sell cows. I decide on what cows to buy at the start.

So all retained heifers come out of your 1/3rd of the calf crop?

So, pretending for a second ...

100 cows ... 90 get bred ... 10 opens are sold and you keep the money

87 calves are born (three are aborted or die during birth, the dams are subsequently sold and you keep the money)

44 heifers and 43 bull calves ... 29 cakes are due to you and 58 to your partner

If you have 12 open spots, can you elect to make (say) 18 of your 29 calves the nicest heifers (in hopes that 12 get bred the next year)? Does he take care of them for no cost to you (since they won't calve for two years)? And if that's going to work, which of the other 69 calves are your 11 final calves?

Who gets the dinks?

Who gets the best calves?

Or maybe all calves are marketed at the same time and the money is simply split 1/3 ... 2/3 ... and, out of your piece, you buy replacement cows?

Not trying to be a PITA, just trying to encourage you to make sure you've thought about everything that needs thinking about.

Good luck!

 

[cjmc]

Not going broke is the most important thing.

How will open cows be marketed and replaced, and on who's nickel?

How will dead cows be replaced and on who's nickel?

Who decides when a cow is sold? What if cows are open and you want to sell, but your guy wants to give them another chance? Or vise versa?

What if some heifers get retained? Who's heifers are those?

And a big one ... who decides what cows to buy to start?

...etc.

A suggestion ... you buy the cows and lease them to him for a fixed $ / head / day rate ... he covers feed, mineral, vet, transportation, etc ... and he gets all the calves. Open cows are sold and the money goes to you. Home raised heifers are retained by this guy to replace opens and death loss and they are his cattle.

Set the day rate so you make money regardless of the commodity market.

I'd also consider telling him that you get to pick 2-5 of the best bull calves to keep back as home raised bulls to replace the bought bulls so as to reduce your cost. If your selection criteria is good, the herd will get better and you'll save money.

Open cows will be sold at the barn, I get the money. If a cow dies because he wasn't taking care of them he pays me the going rate for a cull cow & I buy a new cow to replace her. I make all decisions on what heifers to keep, what cows to buy when to sell cows. I decide on what cows to buy at the start.

So all retained heifers come out of your 1/3rd of the calf crop?

So, pretending for a second ...

100 cows ... 90 get bred ... 10 opens are sold and you keep the money

87 calves are born (three are aborted or die during birth, the dams are subsequently sold and you keep the money)

44 heifers and 43 bull calves ... 29 cakes are due to you and 58 to your partner

If you have 12 open spots, can you elect to make (say) 18 of your 29 calves the nicest heifers (in hopes that 12 get bred the next year)? Does he take care of them for no cost to you (since they won't calve for two years)? And if that's going to work, which of the other 69 calves are your 11 final calves?

Who gets the dinks?

Who gets the best calves?

Or maybe all calves are marketed at the same time and the money is simply split 1/3 ... 2/3 ... and, out of your piece, you buy replacement cows?

Not trying to be a PITA, just trying to encourage you to make sure you've thought about everything that needs thinking about.

Good luck!

I would get first pick out of the entire herd for heifers to keep back. So out of 100 (33 being mine) I could keep back more than I need for replacements. The rest of the herd is sold together & money is split. I would have to pay him to develop the heifers. I haven't ran the numbers yet, I may get a chance to this weekend, but I don't think its a good deal, well not for me at least. I think its a great deal for him because summer grass isn't too expensive here (200/hd) then after that they go to crop residue for 2-3 months which is basically free because he owns that ground. Then he will feed them for 90 days. I will try and put together a complete list of expenses for an operation like his (calculating a cost/hd/yr). Then I'll look at how much we both would make off this venture.

 

[cjmc]

Nope I wouldn't, but then again I am opposed to going into cattle business with anyoneINCLUDING my Dad.

I fixed it for you

This is one thing I didn't give full thought to before I posted this... I'm a nutritionist, so I know how much the little things matter, dewormers, fly control, BCS prior to calving, heifer development. There is a good chance I wouldn't get along with most people in this area of the world as a partner.

 

[bbirder]

Nope I wouldn't, but then again I am opposed to going into cattle business with anyoneINCLUDING my Dad.

I fixed it for you

This is one thing I didn't give full thought to before I posted this... I'm a nutritionist, so I know how much the little things matter, dewormers, fly control, BCS prior to calving, heifer development. There is a good chance I wouldn't get along with most people in this area of the world as a partner.

Back to your first post:
You have known the man for years and trust him.

Fair deal or not, I would forget about a partnership and "Stay Friends" :2cents: