Older
farmers and young farmers strapped for capital are teaming up in increasing
numbers to form livestock lease alliances.
“Leasing
land is common. Why not cattle?” said University of Missouri Extension
agribusiness specialist Mary Sobba.
Young
producers who may not have adequate finances are working with ready-to-retire
producers to share income and profits on cattle by sharing land, machinery,
breeding stock, labor, seed, fertilizer and other costs.
Sobba
suggests that producers and would-be producers test the fairness of a lease by
using a two-column worksheet, one for the landowner and one for the tenant.
Owners
can cash lease beef cows, or the owner could furnish a set of bred cows or
heifers for a predetermined lease price. The operator receives the livestock,
cares for and manages the animals, keeps a percent of the calf crop, and
returns the cows to the owner at the end of the lease.
Ways
to determine cash rental rates are livestock ownership costs, livestock owner
net share, rent and operator’s net return to livestock.
Some
considerations include fence repair, bull expense, how and when cows are culled
and sold, how and when calves are sold, and replacement females.
Owners
and tenants also should decide the length of the lease, incentives for lower
death loss and higher calving percentages, and provisions for drought and
disaster.
To
find an extension agribusiness specialist in your area, contact your local MU Extension center.
(by Linda Geist, MU Writer)
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