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Share Cattle

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rem_243

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Joined
Jul 16, 2011
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Location
The Dakotas
So does anyone have any experience with share cattle? I have my thoughts and opinions, but I was wondering what everyone else thought. I had a guy call me wondering if I would take in 100 head. He was thinking a 65% 35% split, and he would like to buy the calves in the fall. He wants to determine calf price by averaging the price at 4 closest sale barns. The cows are older, in the 9 to 12 year old range. He would provide replacements and bulls. The cows were at a neighbors this year and I think they averaged just over 500 at the beginning of October with no creep.
 
Sounds like a good deal to me. I have done 65-35 or 70-30 splits in the past. With your potential partner offering to provide replacements and bulls that's better than most deals I've seen.

500lb calf average is fine if the cows are moderate. If they're 1400lbs and weaning 500lb calves that's not great.
 
rem_243 said:
So does anyone have any experience with share cattle? I have my thoughts and opinions, but I was wondering what everyone else thought. I had a guy call me wondering if I would take in 100 head. He was thinking a 65% 35% split, and he would like to buy the calves in the fall. He wants to determine calf price by averaging the price at 4 closest sale barns. The cows are older, in the 9 to 12 year old range. He would provide replacements and bulls. The cows were at a neighbors this year and I think they averaged just over 500 at the beginning of October with no creep.
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I am just getting my cows back from a share deal that was 70% 30%split. I was not real happy with the end result as the cows were not taken care of as well as I would have liked and then he tried to move their calving up almost a month so I lost a few cows that probably should have bred back but I still own them which was in doubt until I put them with him. My cows were all under ten except 1 and the steers averaged 680 and the heifers 644 born after the 20th of march and sold the first of november with no creep and poor feed both last spring and this summer.
When I had the ranch I had an opportunity to take a herd on shares. I would have made more money that way but I needed cash flow worse so took them on a year to year basis where he paid for pasture and care and also bought the hay from me. I think in the end we were both a lot happier with the arrangement and I kept his cows for 9 years until my lease was taken from me.
In your situation I would first talk to the neighbor to find out what went on that he doesn't want them anymore. Then do they match your calving situation. I would be a little bit worried about the age of the cows and how uniform the calves would be in the fall. If he wants to buy the calves back in the fall perhaps he would be better off to just pay you to take care of them for him. That way you have the cash and he still has the cows and calves however they turn out.
 
Rem coming from a young rancher. And I am not in anyways trying to be a smart a$$ or a know it all. My question is, why would you want to calve out someone else's "older cows" and deal with all that comes with them, then go and give part of it away. IMHO the only person that wins on a share deal is the guy who is giving them not taking them.
 
Bar M said:
Rem coming from a young rancher. And I am not in anyways trying to be a smart a$$ or a know it all. My question is, why would you want to calve out someone else's "older cows" and deal with all that comes with them, then go and give part of it away. IMHO the only person that wins on a share deal is the guy who is giving them not taking them.
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Why??? - Debt vs: no debt.
 
Shortgrass said:
Bar M said:
Rem coming from a young rancher. And I am not in anyways trying to be a smart a$$ or a know it all. My question is, why would you want to calve out someone else's "older cows" and deal with all that comes with them, then go and give part of it away. IMHO the only person that wins on a share deal is the guy who is giving them not taking them.
Click to expand...

Why??? - Debt vs: no debt.
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Just cant see doing all the work and giving 35% of it away. Interest is reasonable in stead of doing to work for 100 go buy 65 of our own take a little risk and take home 100% of the calf check.
 
We lease 2 different herds while running our own. We do the leases the same way...the cattle owner gets a third of 85% of the calves. The remaining 15% is built in for death loss and if we have a good year it's basically a bonus. They provide the bulls and decide if they will preplace the cows or not. One guy does and the others guy doesn't. When we sell our calves in the fall we average what they bring and that's how they get paid. We get to keep really good replacement heifers and have been able to build our herd that way. We were just starting out and couldn't afford to buy that many cows initially.
 
We have leased cows out on an 80:20 basis with the lessee putting back replacements and we took our 20% in heifers. It worked pretty well for a while and would have continued and grown except we found the wrong lessee. Expensive lesson learned.
We currently run some cows for a neighbour for a straight $ per year deal and it also works well. We rent his place and run some cows for him. We pay full rent and charge him full looking after price. It secures the rented ground for us and lets him stay in the cow business. It is no extra work to look after his few when we are doing our own. The deal is that everything is on the same health program, rations, and the cattle are not run seperately. We don't sort his calves off specifically, we just take the average of the calves. Eg: for every 10 cows he gets the average price of 5 steers and 5 heifers. We provide bulls as I don't trust anyone to pick bulls that are breeding our cows, so he actually winds up with a lot better cows over the long run.
I think a lease can work really well if you find the right partners. While you don't grow the equity in your cowherd as quick, it can cash flow a lot better than a loan that is due out over a shorter period of time, and the lease payment is 100% deductible expense, as opposed to purchase where only the interest is deducted (at least in Canada).
 
I would look at what the average cost for you to run a cow if it's $700 a year and your selling $1000 calves average thats $300 a head profit on a 100% calf crop. Starting to lose it's appeal already. Now throw in death loss and a few opens and some dink calves that for some reason did'nt make it in the sell pen. I ran some cows on shares one time and it was like spinning my wheels I was working but was'nt getting anywhere. I'd figure it more in a 90% to a 10% split. Normally these lease deals are abundant when cows are cheap someone with money buys cows gets 30 to 40% of a calf crop while you feed the cows for a year or two and then a year like this comes along and his cows value have increased 25 to 35%. And the cows get sold he made most likely 30% interest on his money over a 2 or 3 year deal. I can borrow money at 3.75 to 5% to buy cows so I would look at it that way I'd much rather have full control of the cows at 5% interest. No way would you pay 30 to 40% interest on a loan that in the end you did'nt own anything so why would anyone do this. Leases make no sense unless your the one leaseing them out than you make 30% interest on your investment. Rates as high as a credit card.

Sell the hay and rent the grass would be the other option. I myself am interested in being the guy that leases them out same profit or more without the work.That's my retirement plan own 300 cows and lease them out at 30% that would keep me comfortable.
 
90/10 split here........what a waste of time and effort no one really gets ahead and like one previous post said we are giving away 10percent of our check....but I guess it makes the owner feel like he is a "rancher"..................You can't pick your family. unfortunately. :roll:
 
PureCountry said:
Sounds like a good deal to me. I have done 65-35 or 70-30 splits in the past. With your potential partner offering to provide replacements and bulls that's better than most deals I've seen.

500lb calf average is fine if the cows are moderate. If they're 1400lbs and weaning 500lb calves that's not great.
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That all depends on when they calve. If they are May calves, not to shabby, but if they are March, then not so good.
 

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