At regular intervals, I get a call asking what a fair cow leasing agreement would be. Normally, one partner wants to own the cows and the other the cow partner. Your question is general: how should they share the calf harvest? I have recently received several requests for the leasing of cattle cows. Some came from owners interested in renting their cows. Others came from people who wanted to rent cows. The question of all was: What is a beef cow leasing just for my unique situation? Breeding herds should be treated as capital investments, as should land, machinery or buildings. The ownership documents of each animal must be carefully kept for tax documents. Proceeds from the sale of slaughter cows, bulls and dyers should go to livestock owners, regardless of how calves are shared. Similarly, the herd owner should provide replacement bulls and dyeing. These can be acquired from the outside or from the herd owner`s share in the calf harvest. 11.
Method of distribution: in addition to the agreement on the distribution of the value of calves, the distribution of this share can be seriously taken into account. If all calves are sold at public auction, the process is simply mathematical. Where calves are intended for the owner or operator`s property, the procedure must be discussed in depth in the preparation of the agreement. 9. Health programmes: health expectations for herds, cows and calves should also be set out in the agreement. Unique marketing programs sometimes have restrictions on vaccines or treatment protocols, so it is essential to list them so that they can be met. In addition, veterinarians on both parties should be consulted for their introduction, particularly when the new environment is very different from the one that currently exists. xls file Use this decision tool to estimate the costs and revenues for each party in a beef action agreement. The good thing about a stock market rental is that production costs can be distributed in several different ways as long as the calf harvest is divided into the same ratio as the costs. Many other combinations are possible and can be evaluated by simply adding up the estimated cost of each party`s contribution and converting it into a percentage of the total. Typical budget costs as included in the Ag Decision Maker Information File B1-21 Livestock Enterprise Budgets can be used to formulate a new agreement.
However, actual costs should, where possible, be replaced by typical costs. If calves are transported at a higher weight, additional costs for food, health and work should be included. Here are three steps to establishing a fair lease. A fair agreement should be based on projected full-rate production costs, including two components. The first is the direct operating cost plus annualized overhead. The second is the opportunity cost of the resources used by the working farmer`s family, plus the investment costs of both parties. 4. Number of cows: is there a “minimum number” of cows guaranteed by the owner for multi-year stock contracts? How are replacements treated? A good written business plan documents in detail how the contract is terminated – things like the return of cows, the condition of the cows at the end, how to manage death, who feeds the animals last year, etc.
Most of the legal and financial problems encountered during termination can be avoided by a well thought out, well thought out and written business plan at first. 2. Start/End Date: Typical action agreements run from October to October, but must be recorded in writing, regardless of what it is. This schedule should also include a date on which the owner must assume responsibility for his share in the calves. 1.