Yesterday on Superior

[Big Muddy rancher]

I just caught the end of the bull sale yesterday but the bulls were selling for $1,000 or less. What was the deal?

 

[Faster horses]

They were selling LEASES on bulls. I hadn't seen that before either.
The early ones were selling for $2300 or so. They were older bulls,
like fall of '09, some of them. I wonder if they had been used.
Surely not.

 

[Justin]

Profit Maker has been selling the lease on those bulls for quite awhile now. you do have the option of buying the bull for 3x the lease price.

 

[Horseless]

How does a typical lease work.? Who is responsible for getting bulls back and is there a deadline to get them back? How is a death or an injury handled?

 

[Howdy1]

the older bulls have all been used, I believe. You lease them for the season then you have to bring them back andthey are tested for disease, repro tests, etc. Then they are re-leased the next year. Sounds dangerous to me but there are getting to be more of these types of deals all the time.

I can't figure out how people can pay such high rents for these bulls.
I.E.

Say you need to run 25 bulls a year.
Ave lease price $2000/yr
Equals $50,000/yr on bulls

If you bought your bulls and say you need to buy 7 bulls a year on ave.
Ave purchase price $3500
Equals $24,500/yr on bulls (you also could minus salvage value on retired old crancky bulls.)

$50000-24500=$25500

I know I can keep those stupid bulls around here for the rest of the year they aren't breeding for way less than $25500.

Maybe I am missing something else. I usually do!

Howdy

 

[Faster horses]

My math was like yours, Howdy1, as I wondered the same thing.

 

[per]

$2.00 / day for feed and yardage on 21 bulls for the 10 months you don't use or have the bulls $12,600.00.

Not having bulls around breaking things.... priceless

 

[Faster horses]

Mr. FH would totally agree with you, per. He always said running
cows would be a lot more fun if you didn't have to put up with
bulls.

 

[Justin]

i think alot of the bigger outfits that use alot of bulls would rather lease, use and take back. by not keeping 40-50 or more bulls around they can save that feed and run more cows. i've never put the figures to it, but i'd guess thats what they are thinking.

 

[Justin]

250 bulls were leased for an ave. of $1774, top lease was $2600

41 bulls were sold for an ave. of $5253

 

[mn]

Jorgenson leases yearlings for 950.00 for the summer

 

[cleland]

If you take the same pasture that would hold 50 bulls and put 40 pairs on it it would probably pay for the difference in leasing

 

[Just Ranchin]

Isn't this an open invitation to getting trich in your herd?