He writes: “The average market value of raised cows and the value of cow farming is considerably lower than two years ago. This dramatic change in market value affects what is “fair” in terms of the amount of barleasing that would go to cow owners or the percentage of calf harvest that a cow owner should receive. This change is due to the current market value of a farmed cow relative to the value of the farmed cow in the fall of 2015. This radical change in the value of cows means that the person who owns the cows may have to expect a smaller cash payment or a percentage of the calf harvest to better reflect what a “fair” lease is. As the country`s drought worsens and worsens, I am receiving more and more calls for profitability to move a herd of cows to another ranch next year. As a general rule, people want to know what a fair share lease is when one party owns the cows (and maybe even the bulls) and the other party provides winter and summer food, labor, etc. for the herd for more than a year? This indicates that the owner of the cow should receive 26% of the calf harvest and 74% for the working breeder. Remember, the cow owner also receives the cow`s income, but the cow owner is responsible for all pre-verified replacement sows that could be reintegrated into the herds. Berger says it`s important to consider the costs of feed, veterinary care, services, winter pastures and pastures, services, equipment, labour harvest revenues and calves, to determine the best way to allocate expenses and income. To create a cow calf budget for your operation, enter your numbers into Decision Tool Beef Cow Share Agreement Analysis. An agreement like this certainly has its pros and cons, and there are certainly many challenges and pitfalls to consider. A cow-calf portion or a cash lease agreement may be beneficial to both parties, but to be successful, there are important considerations to consider.
If there is a good working relationship between the parties, all management decisions can be made by mutual agreement. The person who provides the work is generally responsible for day-to-day management decisions regarding feeding, breeding and treating health problems. However, more important decisions, such as the purchase or sale of livestock or the definition of general feeding, livestock and public health programs, should be discussed in due course. Some goals related to management areas such as calf percentage and weaning weights can be set in advance. The nature of the registrations required to revise these objectives and the system to be used should also be discussed and agreed upon. The key to a fair agreement is first to calculate the total cost of production of the herd to be divided and allocate that total cost – one post each – to either partner. The costs of the owner of the cow and the costs of the working breeder are then added up and their share in the total cost is determined.