cow leasing

[Rowdy Ranch]

I know that cow leasing is done,but not familiar with it-What is the going rate dollar wise and calf crop wise? What are the other details?Thanks

 

[Sandhusker]

Most of the deals that I've seen are % deals on the calf crop. Some are 50-50, but it seems more are 60-40 with the owner of the cow getting the 40%.

I'll also add that I don't think I've ever heard of anybody, leasor or leasee really thinking it was a money-making deal.

 

[BRG]

We did it by a % of the cow price when they purchased the cows. Example. The cow was bought for $800, we then leased the cows for a 5 year lease, and we paid the owner 12% of $800 every year. It worked out great for us because we didn't have to come up with the purchase price of $200,000 when we leased the 250 head. Then when their was an open cow or a death loss in the cows we didn't loose that, the owner stood behind it. He liked it because he knew he was getting 12% of his money every year and he new our management was good. 12% is better than most other investments. Our interest payment would have been about half of what our lease payment was. It worked great for both of us. The lease is up this year and the owner is going to make a load of money when he sells solid mouth cows for more than he paid for 3 year olds.

 

[Sandhusker]

How do you handles opens?

 

[BRG]

We took the calf at weaning, then tested the cows a few days later. The opens got hauled to town and the check was wrote out to the owner. Another good thing about it for us was we got to do whatever we wanted to do with the calves. We could sell at weaning or keep everyone if we wanted to.

 

[Northern Rancher]

BRG's deal is the kind that seems to work the best for all involved.

 

[Sandhusker]

If you could change anything, what would it be?

 

[BRG]

I guess probably not anything, except for the cows that we got. They were really good producers, but pretty crazy. They came from real big country, Sheridan, WY. Our pastures are pretty big but they don't compare to the ones they came from. Good thing we handle everything on horse around here because when they saw a person they went nuts. Now that we have had them for several years they are better, but not like our home raised cattle. They didn't even know how to go through a gate. All they would do was stand there and mill around in a circle. Finally one would get pushed through and they they would pile through like sheep. Kind of funny actually.