Leasing beef cattle on a share basis can provide a way for landowners to use their available resources without the high capital investment. Lease agreements can be set up many ways and each lease is different. When making leasing arrangements, make sure the share of return for both participants is in proportion to what they put in.
"The perception is that the capital invested in the cows is the biggest input cost, but in reality, the total feed cost is often the highest cost of production," says Harlan Hughes, retired Extension Livestock Economist at North Dakota State University.
To develop a an equitable beef cow share lease:
- Determine the costs to be included in the lease
- Determine the costs to be contributed by each party
- Determine the costs to be shared by both parties
- Calculate the percent of costs contributed by each party and share income in the same proportion that costs are shared.
A key thing to remember is keep it simple. The beef cow lease should only include the cows and the bulls. The leasing of other items should be outlined in a separate agreement.
For more information on share leasing, get the "Beef Cow Leasing Arrangements" handbook from the Kansas State University Cooperative Extension Service. The publication, MF-2163, defines lease agreements and provides worksheets to determine the division of cost and returns. It can be accessed on the Internet at www.oznet.ksu.edu/ or by calling KSU distribution at (785) 532-5830.