leasing cows

[dfarms11]

anyone here lease any cows? What is a profitable rate? From what I've heard 70/30 is the going rate, but I'm starting to wonder if this is profitable! If that calf is only worth $600 @ 70% is $420, not much room for profit assuming %100 calf crop.

[ivbinconned]

Did it for many years. Started out at 60/40...was a slow learner, but got smarter and went to 75/25 and then to 80/20 but would never ever do it again for any "share" arrangment.

The only way I would do it now is by giving the owner a set return on his investment comparable to deposit rate.

Or else run a cow camp and charge a daily rate!!

Most investers that I know are in it for the tax write off and should be happy with a "fair return" as a percentage of their investment. If they are not interested...keep looking
for someone who is!!

[cswilson]

Yeah I think a cash lease is far better than a calf share arrangement-I have a neighbor might let some cows out if you are interested.

[PureCountry]

I worked out a deal with my Dad to take his last Angus heifers when I'd bought his cows. I didn't want the heifers, but he wanted to keep them, so we valued them at $1,000, and I paid him 6% on his "investment", per year, after selling the calves. These were papered bred heifers.

One thing to keep in mind is that with any investment, there is an eventual sell-off, so I'd agree on a depreciated value at the end of a 5-year term or something like that. That way a guy can plan what you're going to do with the cattle and the money in that timeframe.

If the heifers in my deal had been what I wanted, I'd have squirreled away a bit of money from each calf to go towards the purchase of the cows at the end of term. It's alot cheaper than borrowing institution money to buy cows. The key is just being smart with your money.

[dfarms11]

Thats kind of what I got thinking about, the cows I saw were maybe worth $500 bred. at 10% thats $50 even generously 20% for $100 which is more than enough I think.

[FRENCHMAN]

Some guys here have leased cows in a different arrangement.The owner gets 150 lbs of average 500 lb steer price per cow.

That to me is lots considering some of the cheap cows around.