Aaron Berger, University of Nebraska-Lincoln (UNL), examined these considerations in a recent newsletter unl Beef Watch. Here are three tips for getting a cow-calf action or cash deal that works. 1. The division: 70-30 was recently a joint split, with the owner of the cow receiving 30% of the calves and all the income from the cow. But any agreement is unique. „Discussions begin with identifying the contributions that each party will make in this cow partnership,” he says. From the owner`s (owner`s) perspective, these contributions typically include the cows themselves, as well as an accompanying health program and the strength of the bulls to care for the cows, Krantz says. Inputs are generally cited as tenant contributions and may include forage, pasture, labour, equipment and facilities. Adding the value of each page`s contribution will serve as a guide for an equitable sharing of the calf harvest. Editor`s note: Harlan Hughes offers a CD entitled „How to make the cattle cycle work for you”. For a copy, send $25 to Harlan Hughes, 30 Ramble A Road, Laramie, WY 82070.
4. Number of cows: Is there a „minimum number” of cows guaranteed by the owner in the case of multi-year share contracts? How are replacements treated? We often rely on „ground rules” as mental shortcuts to guide business decisions. Sometimes these guidelines work quite well, but they can also lead to losses, especially when conditions change. Share Leases are a good example. An old rule of thumb for cow shares was a 70:30 split, with the farmer retaining 70%. However, due to a dramatic increase in grazing costs and rising labor costs, it is not uncommon for fair splits to approach 80:20. In addition, agreements should have a start and end date (normally Oct. until October or just before the weaning period) as well as a separate agreement for consideration of background development companies or heifers. For more information about Share Leases and worksheet templates, see Ag Lease 101. 8.
Death review: procedures used by insurance companies to verify that the loss of cow death can be covered and included in the cow share agreement. This usually includes the services of a licensed veterinarian, with the costs normally assigned to the owner of the cow. 11. Method of distribution: in addition to the agreement on the distribution of the value of the calf, the distribution of this share can be seriously examined. If all calves are sold at a public auction, the process is simple mathematics. If the calves are destined for the owner/operator`s property, the process needs to be thoroughly debated while the agreement is being prepared. „By allocating revenues relative to the share of contributions incurred, the lease agreement should be fair to both the farmer and the farmer,” Berger writes. „An electronic spreadsheet using a corporate budget can be a useful tool for this layout.” An agreement like this certainly has its pros and cons, and there are certainly a lot of potential challenges and pitfalls to consider.
A calf or cash equity contract can be beneficial for both parties, but to be successful, there are important considerations to consider. 9. Health programmes: Health expectations for herds, cows and calves should also be set out in the agreement. Unique marketing programs sometimes have limitations in vaccines or treatment protocols, so it is a must to list them so that they can be adhered to. . . .