Share cropping cattle. Is this a fair deal?

[cjmc]

So I have the opportunity to share crop cattle with a guy. The deal he is proposing is pretty simple and straightforward. I buy the cattle & the bulls. He provides the labor & pays for 100% of everything. He then takes 2/3rds of the calf crop every year & I get 1/3. I am guaranteed 1/3 calf crop so if I had 100 cows calving 100 calves and one dies that's out of his pocket, I still get my 33. If a cow dies from his negligence I get weigh up price, if its an Act of God I take the hit.

I trust the guy, known him all my life & i would see the cows probably at least twice a month. I"m not worried they wouldn't get taken care of I'm just seeking your opinion if that's a pretty fair deal.

 

[bbirder]

Who's land? fencing?

 

[callmefence]

Rough and quick.
100 first calf behind em cows x1300= 130000
3 good bulls at 3000=9000.00
Call it 140000.00
30 calves at 650.00=round-up 20000.00
7 years to make back on calves.

Now do you own the cows? Do you get payed for culls. If so I'd say 50 percent return in 7 years. Salvage value of herd. Not bad. ...But there is tons of pitfalls I can see. I would approach with caution.

 

[melking]

It seems to me that only question here is the share each party brings to the table. In the long run, he might add more value to the deal but the deal would not happen if not for your money in advance

 

[Bigfoot]

30 years ago, I tended a couple of herds for half the crop. It actually wasn't that great of deal, but I was young enough, that I went ahead and done it. I remember thinking, even as a young man, that the owner could have made more money some other way. I don't believe I'd front the herd of cattle, for a 1/3 of the calf crop.

 

[RanchMan90]

The going rate here is 80¢ per day per cow= $292 per year for full lease and care, customer covers all consumables. I think y'all would both come out ahead with you paying him lease and care while covering consumables. He gets paid and you should be able to cover the note and make maybe $100 per cow :2cents:

 

[Craig Miller]

I see him getting tired of giving away a third of the crop every year and wanting out in about 3-4 years. Probably want half the herd when he does too.

 

[Jogeephus]

If I trusted the guy I'd do it.

 

[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.

 

[WalnutCrest]

Who's land? fencing?

Wait!

This is a GREAT question.

 

[wacocowboy]

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

 

[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

 

[midTN_Brangusman]

I would do it for half the calf crop, no less!

 

[pdfangus]

what are your goals?

why are you inclined to consider this high risk venture?

 

[Son of Butch]

If I trusted the guy I'd do it.

:nod:
Sounds like he is a trusted good guy not afraid of work that can't get his own financing to buy the cattle himself.
Since the OP just wants to know... is it a fair deal?.. I vote yes.

 

[Son of Butch]

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.

 

[wacocowboy]

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.

 

[midTN_Brangusman]

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

 

[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?

 

[midTN_Brangusman]

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.