Cows on Shares

[Whitewing]

Whitewing, the idea of renting out extra grass appeals to me moreso
than running cows on shares.

However, I have listened to self-made successful ranchers and it
is their opinion that you can graze someone else's pasture cheaper
than you can graze your own. Rent theirs and in a drought year or a
year of other
unfortunate circumstances, use your own grass that has been SAVED
or grazed after the growing season.
That's just something to keep in the back of your mind. I had never
thought of this before, but they were adament about it. Even
just renting SOME extra grass and saving some of theirs was
an idea they used successfully. Again, FWIW, and I'm sure some
here won't agree with what I have just posted. I am just repeating
as food for thought. Besides, I'm sure your pasture conditions are different than ours.

Interesting idea FH and I'll give it some thought.

My neighbor once approached me about grazing my animals on another piece of property he has nearby....within walking distance for the cows....at least to move them. Once there, they'd need to stay for a while and I'd have to put one of my employees watching them on a daily basis. He's got something like 3500 acres but I don't know in what condition it's in right now and don't have a clue how much he'd charge for the privilege of using the place.

Perhaps for the final month or so of the rainy season I could pull my animals off my place and graze them at his leaving my place to reach some level of regrowth for the summer months.

 

[slim 2]

Have leased cows before, Right now I am buying some neighbours cows over time. Bought a small percentage of the cows at the start of the deal and buying the remainder over 3 years interest free. It benefits both, the owner spreads income over 3 years for tax reasons, and the buyer doesn't have to come up with all the money at once. Just make sure to have the finance period no longer than the productive life of the cows.

 

[Frank in West Dakota]

Harris25, here's a few questions you need to ask yourself if you should or should not take cows on shares!
Do I have enough cattle to fill my ranch?
Do I have the type of cattle I want to fill my ranch?
Where and how do I get those type of cattle?

You want cows? Go to a reputation outfit that's been in the business a long time, and ask them if they would want to put cows out on shares. You can't buy those quality of cows. You might have to AI or buy a lot better bulls to keep the quality up, but it'd be worth it.
When you take cows on shares from a reputation outfit, you have marketing options. Calve when they do, sell when they do.

Now the hard part; percentages!

I will not take less than 80% on a share deal! :shock:
Their 20% of heifers go back into the herd as bred.
Their 20% of steers goes to them. They have no other investment, I have all the expenses.

Now, if you don't want cows, use your grass for yearlings!
Guys who bought calves last fall/winter/spring are gonna make a lot of money this fall sellin' yearlings. And most of the time, you will make money, but not all the time.

Good luck with whatever you decide.

 

[RSL]

It is a large cash flow decision as well. Here lease payments would be 100% tax deductible, while only interest is deductible on the purchase of those same cows. The cash cost might be lower on lease cows than on purchase where the demand is for interest and principle payments. As well, depending on the arrangement, share cattle can get you into some situations where you can market with a larger reputation provider of share cattle.
Maybe the biggest question is, do you want to build cash flow, or do you want to build equity in the cow herd, or some combination of the two.
Either way it takes a pretty sharp pencil. :lol:
FWIW...

 

[Whitewing]

So, FIWD, your share arrangement for caring for the cows of others would be something like the following?

80% of female calves stay with you.
20% of female calves go to the cows' owner.
100% of steers go to the cows' owner.
All heifers returned to the herd as bred.
Vet and other expenses are yours.

What's the average length or term of such an arrangement? For those 80% of the female calves that stay with you, who selects which animals stay with which side?

 

[Frank in West Dakota]

So, FIWD, your share arrangement for caring for the cows of others would be something like the following?

80% of female calves stay with you.
20% of female calves go to the cows' owner.
100% of steers go to the cows' owner.
All heifers returned to the herd as bred.
Vet and other expenses are yours.

What's the average length or term of such an arrangement? For those 80% of the female calves that stay with you, who selects which animals stay with which side?

Glad it's a little warm out, and needed a water break!

Some of your analysis is right.
80% of heifers stay with me, of which about 75% of them get bred, some sold, some put into my herd.
20% of the heifers go into the owners herd as bred. So their herd stays relatively the same number.
80% of male calves are mine. Some are bulls that I use. 20% of male calves go to owners, all as steers, all sold in the fall.
All expenses are mine.
So the owners still have about the same number of cows they started with.
This agreement has been in place for 10+ years, I see it ending soon, but it's their decision to sell/take them back, not mine.
I have complete control of everything; breeding, care and marketing. Their input is welcome, but in the end, it's still my decision.

 

[Whitewing]

Thanks for the response FIWD!

And I see with a re-read of your post that you were clear the steer percentage for the cow owner is 20%.

One question though. Do you have control over which heifers/steers/bulls stay with you versus those that go to the other owner?

 

[harris25]

Thanks FIWD for the input. I have plenty of grass available and think that with incurring all the expenses an 80/20 split would be the way to go. Thanks for your input and advice.

So, FIWD, your share arrangement for caring for the cows of others would be something like the following?

80% of female calves stay with you.
20% of female calves go to the cows' owner.
100% of steers go to the cows' owner.
All heifers returned to the herd as bred.
Vet and other expenses are yours.

What's the average length or term of such an arrangement? For those 80% of the female calves that stay with you, who selects which animals stay with which side?

Glad it's a little warm out, and needed a water break!

Some of your analysis is right.
80% of heifers stay with me, of which about 75% of them get bred, some sold, some put into my herd.
20% of the heifers go into the owners herd as bred. So their herd stays relatively the same number.
80% of male calves are mine. Some are bulls that I use. 20% of male calves go to owners, all as steers, all sold in the fall.
All expenses are mine.
So the owners still have about the same number of cows they started with.
This agreement has been in place for 10+ years, I see it ending soon, but it's their decision to sell/take them back, not mine.
I have complete control of everything; breeding, care and marketing. Their input is welcome, but in the end, it's still my decision.

 

[balestabber]

my story is a little different than all the above,but i'll share it anyway,what the heck.

way back in the 1980's i rented 1200 acres of farm ground.mostly row crop but consisted of some hayground and pasture.

the landlord/landowner already had his herd established and some other pasture rented as low as 3 dollars an acre.

i got 1/4 of the calf crop every year for my labor.i had no expences.the forth i received was across the scales every year at the local market.

i didn't get rich but i never lost money.

landlord back then always figured he had the realestate and the tenant had the machine cost,so we put up the hay for half then sold our half.

again,,,short term with no investment in the cows.

the landowner died of luekiemia,and left a widow with 6 school age children.i lost the farm due to the CRP program.times change and things can happen.

good luck,,,balestabber