Cattle Business?

[TNhobbyfarmer]

I have a farm that has been used mostly for recreational purposes; hunting, relaxing, weekend getaway, etc. It is about 2 hours from my principle residence. I do lease out some bottom land to a person who grows tobacco. However, the property does not generate much income.

I have allowed a guy who has cows on an adjoining farm to cut some hay at no charge. It just keeps me from having to bush hog. I am thinking about approaching that guy about a possible partnership. Here's what I'm thinking; we buy some cows 50/50. I provide the land to put them on and he provides the labor and watches after the cows. Since he is local, I'm thinking that shouldn't be too much of a burden. Any profit is split 50/50. Does that sound like a workable arrangement? Do you have any suggestions that maybe makes more sense to you?

This is just a thought I have had. Before I approach him with this idea, I would like to hear from folks who have more experience than me in these areas.

 

[MMagis]

You can do a search on cattletoday.com about buying cattle on shares. Also on Agtalk I've seen some discussions. I personally don't think it's a great idea, especially when you don't know much about the cattle business. 50/50 really wouldn't be fair, as he would have much more involvement than you would. Also, determining profit can be a little tricky in some situations. I would suggest renting out the pasture to him.

 

[smstonypoint]

Are you talking about a cow/calf enterprise or stocker/backgrounding enterprise?

Regardless, there's more to it than just buying stock and providing labor. What about the other out-of-pocket expenses -- hay, minerals, vet bills, etc. Here's a site that provides some prototype enterprise budgets for various beef enterprises.

AEDE

Steve

 

[ustmd]

How much land?

I think you would be better off leasing it to him (you would then be insulated against any finance losses/legal issues) or taking it out in trade--he gets to run the cattle on your land, but your get 2 or 4 cows for meat.

 

[texasjohn]

I don't recommend at 50/50 split at all.

You don't understand cattle...and all the things that can go wrong with them.

Lease him the land...and all the maintenance and upkeep is his responsibility.

Fences, water, pens, roads, liability when the cattle get out on a road and get hit.....all these are going to be a BIG down side with little to no upside. By leasing, you get all the ag exemption and stuff along that line without the liabilities, in both $$ and your personal time.
However, lease must limit the number of head he can put on the place and explicitly say who is responsible for running the operation and paying for property maintenance.

WARNING, at least in Texas, leasing the land, unless explicitly stated otherwise, means that the lessee has legal right to all the surface rights...including hunting and income from that, cutting timber, etc...so, be careful in lease wording.

 

[smstonypoint]

How much land?

I think you would be better off leasing it to him (you would then be insulated against any finance losses/legal issues) or taking it out in trade--he gets to run the cattle on your land, but your get 2 or 4 cows for meat.

According to the USDA, pasture cash rents in TN were $19/acre in 2010. http://usda.mannlib.cornell.edu/usda/current/AgriLandVa/AgriLandVa-08-04-2010.pdf I'm sure that the rents vary within and across counties in TN, but it would take a substantial acreage to warrant asking for that sort of payment in kind (cows for meat).

Depending on your equipment costs, how you value your time, and the acreage involved, you might be better off with the current arrangement -- he gets the hay and you don't have to bush hog.

Just my :2cents:

Steve

 

[jlsmith]

If i was the other guy i wouldnt do it. Takes more time and effort to look after them. Its an everyday JOB. Id do like the OP have said and see if he would lease the place, I have lost a good friend over the same case because he didnt want to put forth the effert to help he just wanted the money. JMO

 

[sweettractors]

Not a good time to buy cattle. Prices are sky high. My Oldest Son sold 3 cull Charolais 1825 lb (avg. wt) cows this week for $.7150 per lb and his neighbor sold some 9 weight feeders for $1.15 per lb. 400-500 lb feeders calves could bring $1.70 per lb. Ken Sweet

 

[jlsmith]

Not a good time to buy cattle. Prices are sky high. My Oldest Son sold 3 cull Charolais 1825 lb (avg. wt) cows this week for $71.50 per lb and his neighbor sold some 9 weight feeders for $1.15 per lb. 400-500 lb feeders calves could bring $1.70 per lb. Ken Sweet

WOW your son made a killing on those 3 cows. He can retire now lol:laughing:

 

[clemsonfor]

Not a good time to buy cattle. Prices are sky high. My Oldest Son sold 3 cull Charolais 1825 lb (avg. wt) cows this week for $71.50 per lb and his neighbor sold some 9 weight feeders for $1.15 per lb. 400-500 lb feeders calves could bring $1.70 per lb. Ken Sweet

Im not into cattle or anythig, but at $71/lb id sell the whole heard at that price and then buy those feeder calves and raise them!!!