Building up stock numbers without any land?

carrollsno1

Well how ye going i was just wondering what ye think of a notion im after getting to buy dairy heifer calves (norwegian red x) getting them contract reared and leasing them to another farmer when they calve down
Thanks in advabce lads

trixi2011

carrollsno1 wrote: »

Well how ye going i was just wondering what ye think of a notion im after getting to buy dairy heifer calves (norwegian red x) getting them contract reared and leasing them to another farmer when they calve down
Thanks in advabce lads

would probably cost you in the region of 1300 to get them to calving a lot of lease agreements only pay 10% of the stocks value per year. you would be better off selling them at calving and buying maidens again

frazzledhome

trixi2011 wrote: »

would probably cost you in the region of 1300 to get them to calving a lot of lease agreements only pay 10% of the stocks value per year. you would be better off selling them at calving and buying maidens again

But what's wrong with a 10% return?

carrollsno1

trixi2011 wrote: »

would probably cost you in the region of 1300 to get them to calving a lot of lease agreements only pay 10% of the stocks value per year. you would be better off selling them at calving and buying maidens again

Thanks but my main aim is to hold onto stock and build up cow numbers

trixi2011

frazzledhome wrote: »

But what's wrong with a 10% return?

Noting wrong with it but could you not grow numbers quicker by selling and buying in a larger number of younger heifers with the proceeds.

Sam Kade

trixi2011 wrote: »

would probably cost you in the region of 1300 to get them to calving a lot of lease agreements only pay 10% of the stocks value per year. you would be better off selling them at calving and buying maidens again

So if they cost €1300 and you get €1300 when you sell them, where's the profit? I bought maidens for a few years hard to make profit out of it.

trixi2011

Sam Kade wrote: »

So if they cost €1300 and you get €1300 when you sell them, where's the profit? I bought maidens for a few years hard to make profit out of it.

hope for 1500

frazzledhome

trixi2011 wrote: »

Noting wrong with it but could you not grow numbers quicker by selling and buying in a larger number of younger heifers with the proceeds.

The cows he's leased out are his and he's getting good return, what's to stop him buying more and continuing with the same. Could be milking a lot of cows without milking

trixi2011

carrollsno1 wrote: »

Well how ye going i was just wondering what ye think of a notion im after getting to buy dairy heifer calves (norwegian red x) getting them contract reared and leasing them to another farmer when they calve down
Thanks in advabce lads

I see from the newbies tread your currently working on a dairy farm would there be any scope to build stock within the farm your working on?

Sam Kade

trixi2011 wrote: »

hope for 1500

That's what I used to do never happened, 2013 killed it.

Panch18

frazzledhome wrote: »

But what's wrong with a 10% return?

I might be interrupting this wrong but if it's 10% per annum a cow would have to milk 10 lactations to cover her cost? Or how do you mean??

trixi2011

Panch18 wrote: »

I might be interrupting this wrong but if it's 10% per annum a cow would have to milk 10 lactations to cover her cost? Or how do you mean??

Afaik if you lease out a heifer you will receive a heifer back of the same ebi/ type as you leased in

Sam Kade

Panch18 wrote: »

I might be interrupting this wrong but if it's 10% per annum a cow would have to milk 10 lactations to cover her cost? Or how do you mean??

I thought with leasing you have to give back the same age of cow you lease eg. if you lease first calvers next spring then the man leasing the cows must give you back first calvers the following year.

frazzledhome

Panch18 wrote: »

I might be interrupting this wrong but if it's 10% per annum a cow would have to milk 10 lactations to cover her cost? Or how do you mean??

He leased a cow to me for 5 yrs
I return the same genetic merit cow in 5 yrs as he gave me iykwim

Panch18

trixi2011 wrote: »

Afaik if you lease out a heifer you will receive a heifer back of the same ebi/ type as you leased in

Forgive my ignorance lads as I have zero experience in this leasing craic

So what you are saying is if I lease you a cow in first lactation, you milk her for 5 lactations say, paying me 130 per lactation, and if she dies at end of lactation 5 you give me back a first calver of similar quality??

Panch18

Thanks lads, I'm with ye now

frazzledhome

Panch18 wrote: »

Forgive my ignorance lads as I have zero experience in this leasing craic

So what you are saying is if I lease you a cow in first lactation, you milk her for 5 lactations say, paying me 130 per lactation, and if she dies at end of lactation 5 you give me back a first calver of similar quality??

Spot on

carrollsno1

Thanks for the replys im hoping to finish working on the farm im on in spring 2017 and head on to the next farm after wherever that is so i wouldnt like to ask about keeping stock here and they are all autumn calving here too i was thinking of paying a famiky member to rear them and i know a good few lads from college getting into cows or expanding so i would hope to lease to someone i know anyway i wont be coning home to farm for a few more years so i wouldnt have a huge problem with 10% return if it meant that i had 100 cows if not more before im 30 without having to do any work with them

frazzledhome

carrollsno1 wrote: »

Thanks for the replys im hoping to finish working on the farm im on in spring 2017 and head on to the next farm after wherever that is so i wouldnt like to ask about keeping stock here and they are all autumn calving here too i was thinking of paying a famiky member to rear them and i know a good few lads from college getting into cows or expanding so i would hope to lease to someone i know anyway i wont be coning home to farm for a few more years so i wouldnt have a huge problem with 10% return if it meant that i had 100 cows if not more before im 30 without having to do any work with them

Can't beat thinking outside the box

mf240

Why would someone lease cows. Surely yould just get a loan and buy them.

carrollsno1

mf240 wrote: »

Why would someone lease cows. Surely yould just get a loan and buy them.

Lads might already be to heavy in debt they might not have assets to put up against a loan and plus if your starting up for the first time you probably already have a loan taken out for a parlour and housing

keep going

a question or two,do you wantr to build up a herd of good genetic merit or do you want to build value in stock.my own preference would be a partnership somewhere rather than the arrangement youre suggesting as you are bringing more varibles into the equation-buying price,rearing cost,leasing price andbringing more people into the equation.if you do deal with a farmer for x number of cows at the end of a year he takes all the varibles out of it for you.suitable partners are hard got but so are are heifer calves rearers and leasers.nothing wrong with a low cost calf to 18 month beef system if you want to just build stock value but i think its not the route for you as it would limit your working radious

Willfarman

The cows have to go into the herd number of the lease farmer? What's to stop him leaving you high and dry?

stretch film

Willfarman wrote: »

The cows have to go into the herd number of the lease farmer? What's to stop him leaving you high and dry?

A legal contract.

Its a lease agreement after all . In theory the leasee doesnt own .

stretch film

Nice bit of initiative op..

You will need a nice bit of capital upfront to have an animal fit for leasing

The variations in the market might squeeze your returns to the point where you cant replenish stock when the market is at its lowest and your returns similarly.

When your end goal is to build stock no.s you might find slow years will delay this because you might have only one option and thats to sell at min profit or a loss even.

Solid arrangements with rearer and customers would be vital imo.

kowtow

Are there many takers for leased cows, and do they want to hang on for a whole five years?

frazzledhome

kowtow wrote: »

Are there many takers for leased cows, and do they want to hang on for a whole five years?

Yes and yes

Limited market but not many doing it

Panch18

Knowing very little about it and it seems like a decent idea to me

but I would have one concern. If a dairy farmer is going around leasing cows then the chances are that his finances aren't great to begin with and could be getting worse. I think that most farmers if they had the finances would buy cows or heifers etc.

so the credit risk to me would seem quite large, how would you get your cows (equivilant to what your first leased him) if the farmer went to the wall? And I think more and more farmers will go to the wall than have done in the past.

Timmaay

Panch18 wrote: »

Knowing very little about it and it seems like a decent idea to me

but I would have one concern. If a dairy farmer is going around leasing cows then the chances are that his finances aren't great to begin with and could be getting worse. I think that most farmers if they had the finances would buy cows or heifers etc.

so the credit risk to me would seem quite large, how would you get your cows (equivilant to what your first leased him) if the farmer went to the wall? And I think more and more farmers will go to the wall than have done in the past.

Agreed on the caution here, however this is where you have to have a good nose for sussing out which lads are full of sh1t and which farmers actually have their heads well screwed on, with a good efficient farming system that is robust enough to withstand milk price fluctuations. 2bh you'll get a very good picture of what sort of system a farmer is running after say a 30mins chat with him while walking around his farm.

Greengrass1

Panch18 wrote: »

Knowing very little about it and it seems like a decent idea to me

but I would have one concern. If a dairy farmer is going around leasing cows then the chances are that his finances aren't great to begin with and could be getting worse. I think that most farmers if they had the finances would buy cows or heifers etc.

so the credit risk to me would seem quite large, how would you get your cows (equivilant to what your first leased him) if the farmer went to the wall? And I think more and more farmers will go to the wall than have done in the past.

In that case the said farmer wouldn't own the cows so I'd just take them back I assume?

JeffKenna

Panch18 wrote: »

Forgive my ignorance lads as I have zero experience in this leasing craic

So what you are saying is if I lease you a cow in first lactation, you milk her for 5 lactations say, paying me 130 per lactation, and if she dies at end of lactation 5 you give me back a first calver of similar quality??

This is quite an interesting topic.

Had a look at the draft lease on the Teagasc website and it seems to state that in the event of the animal being culled/dying during the lease the operator has to replace her with a similar animal in age, condition score and EBI. Could see potential issues here in what people classify as similar animals.

carrollsno1

Going into partnerships a definite no because then im losing out on my young farmer top ups in the future when i do go farming plus i cant see much people wanting to go into partnership with a 20 year old thats intending on travelling for the next few years i would be hoping to build up genetically good cows but ive been told norwegian red crosses have lower ebis anyway so i could lease a top norwegian red and get back a bad frieisan at the end of the lease on the tooic of farmers leaving me high and dry that would be a major concern but i suppose all you could do there is take my own cows back and maybe a few of his along with it

Panch18

Greengrass1 wrote: »

In that case the said farmer wouldn't own the cows so I'd just take them back I assume?

Wouldn't they be in the dairy farmers herd number who you had leased them to??

I'm not sure if this risk is a valid concern or not - It seems to me that it is but just trying to tease it out

kowtow

Panch18 wrote: »

Knowing very little about it and it seems like a decent idea to me

but I would have one concern. If a dairy farmer is going around leasing cows then the chances are that his finances aren't great to begin with and could be getting worse. I think that most farmers if they had the finances would buy cows or heifers etc.

so the credit risk to me would seem quite large, how would you get your cows (equivilant to what your first leased him) if the farmer went to the wall? And I think more and more farmers will go to the wall than have done in the past.

I might be wrong but can't you register an interest in a herd number simply as an owner (rather than the farmer)?...

Would be better if you could do it on a per cow basis? Not difficult either.

But the legal position is perfectly clear, the lessor remains the legal owner and the lessee is the keeper. The lessee has no right to sell the animal, in fact (as with cars) there may even be a duty on the buyer to ensure that the "title is clean..".

Many people over the years have unknowingly bought things with HP / leases outstanding and ended up having to return them.

keep going

carrollsno1 wrote: »

Going into partnerships a definite no because then im losing out on my young farmer top ups in the future when i do go farming plus i cant see much people wanting to go into partnership with a 20 year old thats intending on travelling for the next few years i would be hoping to build up genetically good cows but ive been told norwegian red crosses have lower ebis anyway so i could lease a top norwegian red and get back a bad frieisan at the end of the lease on the tooic of farmers leaving me high and dry that would be a major concern but i suppose all you could do there is take my own cows back and maybe a few of his along with it

hold it up there a sec,whats this travelling stuff about.not that i have any problem with travelling its just that if you want to succeed at this you need to be around minding your business

carrollsno1

keep going wrote: »

hold it up there a sec,whats this travelling stuff about.not that i have any problem with travelling its just that if you want to succeed at this you need to be around minding your business

Im working in england at the moment and i want to head to new zealand and saudi arabia after im finished here the whole idea of getting the heifers contract reared and leasing the cows is because im not around at the moment

keep going

carrollsno1 wrote: »

Im working in england at the moment and i want to head to new zealand and saudi arabia after im finished here the whole idea of getting the heifers contract reared and leasing the cows is because im not around at the moment

how will you, source the calves,rearers,do the deals.have you someone to act as an agent while youre away.how are you going to finance the two years from buying the calf to leasing the heifer.what happens the calf in the heifer.not being negative just getting more detail

carrollsno1

keep going wrote: »

how will you, source the calves,rearers,do the deals.have you someone to act as an agent while youre away.how are you going to finance the two years from buying the calf to leasing the heifer.what happens the calf in the heifer.not being negative just getting more detail

Im planning on getting a family member to rear them and i know fair few farmers locally that are planning on expanding in the coming years i heard somewhere before that the owner of the cows owns the heifer calves i stand to be corrected on that though as regards financing i have some money put aside and i have a contract until 2017 for work so id be hoping finance it all myself

porter shark

You sound like a good young fella to save money. Do just that, save a few quid and buy the cows when you want them. There's too many loopholes in that leasing craic and if one hooky ould farmer screws you over the whole thing will be a wasted exercise and you'll be off on the wrong foot.

carrollsno1

porter shark wrote: »

You sound like a good young fella to save money. Do just that, save a few quid and buy the cows when you want them. There's too many loopholes in that leasing craic and if one hooky ould farmer screws you over the whole thing will be a wasted exercise and you'll be off on the wrong foot.

Not the best at saving money but i am saving a bit just have a feeling if i do save up enough money ill end up buying a 110-90

Bullocks

carrollsno1 wrote: »

Not the best at saving money but i am saving a bit just have a feeling if i do save up enough money ill end up buying a 110-90

I know it's a bit different to what you're thinking about but would it be simpler to buy beef heifers and put them to the bull , then sell as springers or with calf at foot ? I reckon it's as good a way to make a pound and a fair bit simpler than all that's going along with rearing , calving ,leasing and hopefully collecting your money .
When you're fit to come home then you will either have a nice herd of sucklers to sell or cash from the sales

carrollsno1

Bullocks wrote: »

I know it's a bit different to what you're thinking about but would it be simpler to buy beef heifers and put them to the bull , then sell as springers or with calf at foot ? I reckon it's as good a way to make a pound and a fair bit simpler than all that's going along with rearing , calving ,leasing and hopefully collecting your money .
When you're fit to come home then you will either have a nice herd of sucklers to sell or cash from the sales

Were suckler farming at home at the moment and as much as it is nice to have "grand looking" cattle around the place i have no time for it for the money there is out of it as a neighbour over here who has sucklers albeit a different system using galloway cows and rearing 4 calves per cow on marginal land he says all you get out of sucklers is an appettite