Investing in Cattle

3 posts
Sun, 10/06/2013 - 11:11 #1

Member for

12 years
MooCow Man
Last seen: 03/08/2018 - 21:05
Joined: 10/28/2012 - 16:05

Investing in Cattle

Hi All,

I have been asked to invest in some Blonde Charolais cattle where I buy a certain amount and they are looked adfter on property by  a stud owner.

He does everything on farm and I pay costs per head per year and get a return every year from the sal of the bulls at 2 yrs old. Each year our stud

grows with the birth of new calves, just wondering if anyone has heard of or done something like this as it seems a great idea to be part of the cattle stud

business without having to own a property, any help would be greatly appreciated

Regards

Andrew,

 

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Sun, 10/06/2013 - 20:08 #2
barb
Last seen: 09/17/2019 - 18:07
Joined: 11/23/2011 - 09:38

Hi Andrew,

Sounds good in theory, but I have been breeding cattle for years and the majority of the calves born here are Heifers. Annual upkeep, vaccinations, vet fees, feed, hay, grain etc can cost a lot of money. For instance the feed bill for hay, feedlot mix, lick blocks, stock salt etc, for three months, cost me over $10,000.00 in 2007. This was for 20 head of cattle and 200 stud Boer goats.

 Did he tell you what he will do with the heifers? Do you share them 50/50 or does he just get to keep them? Maybe Rob or Charlton have heard of an arrangement like this, but personally I haven't. I would be a little cautious about this arrangement if I were you and of course get everything on a written contract. An old saying goes,'a verbal agreement is not worth the paper it isn't written on.' It was a solicitor who told me that years ago.

my advice is  to be very, very, careful and if you decide to go ahead, have the contract drawn up by your solicitor, not his and don't share the same solicitor with him. Doing the latter cost me and my late husband thousands of dollars and a trip to the Supreme Court to get our property back.

Regards,

Barb

 

 

 

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Tue, 10/08/2013 - 15:11 #3
rmcpb
Last seen: 03/08/2018 - 21:05
Joined: 10/22/2012 - 11:13

Andrew,

Barb hit the nail on the head! I would be VERY cautious with this one. Anything that sounds too good generally is too good and will cost you.

You would need to establish the annual costs up front, how many heifers are kept to add to your herd, disposal of excess heifers and steers (not all will make the cut as bulls), how long these are kept for growing out (you will be paying for this), who gets the money for the excess stock and, of course, the proportion of the bull sales you get to keep. Also, do you have to keep paying for the upkeep of any unsold bulls?

Actually wouldn't mind starting a business like that myself. Not dependent on the market value and an agreed income.

Take care!!

Cheers
Rob.

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