Cow-Calf Share or Cash Cow Leases - What is fair?
Cattle prices today are at historic highs. Beef cow numbers in the United States are at historic lows. Beginning cow-calf producers are looking for opportunities to get started in the business. Many older ranchers would like to slow down, but still retain their investment in their cowherd and participate in the current and projected good times ahead. Cow-calf share or cash leases can be used as a way to share the revenue and expenses associated with a cow-calf enterprise when multiple people are involved. To determine what a fair and equitable lease is, it is important both parties accurately determine their level of contribution to the total costs involved in cow-calf production enterprise.
A webinar identifying things that cow owners and operators should consider when developing a Cow-calf Share/Cow Cash Lease Agreement was recently recorded. The presenter for the webinar utilizes an Excel® Spreadsheet titled "Cow-calf Share Lease Cow-Q-Lator" that is located on the West Central Research and Extension Center Ag Economics Decision Aids page. This spreadsheet takes into account the contributions of all parties involved in the cow-calf enterprise and then calculates both a fair cash lease value as well as what would be an equitable share arrangement.
For a brief overview on cattle lease agreements and things that should be considered see the "Cow Leases" article.
Due to the current volatility of inputs as well as cattle prices, evaluating a lease on an annual basis to revisit what is an equitable arrangement is in the best interest of all people involved.
Aaron Berger, Extension Educator
Panhandle Research & Extension Center
University of Nebraska