Cattle investment

[onesiedale]

"Are you suggesting that Bob be paid a rate for his time, assets etc AND receive a share of the profits? An interesting view."

This is how it should be surely. Bob should be paid for the labour and a return/ depreciation on any of his assets. Also land rental be cgarged. then the profits after this are split on an equitable arrangement .

 

[Jon75]

If it's not all about money........ I would be interested to know what the minimum return required on the stake would be before it is all about the money?

That's a very interesting question. Obviously the very real risk of losses is a big factor and one that must not be undertaken lightly. Then you have the auction price factor. I spent considerable time identifying patterns in historical auction sales data (A concept alien to Bob) to look at worst and best case scenarios. My 'calf calculator' spreadsheet details returns of a range of sales prices from £450 to £900 per animal etc with several rows shaded as a 'target'. My hopes were for a minimum of 8.19% but as this was all new to me and I didn't know what to fully expect I'd have been pleased with slightly less and no losses, which were obviously my biggest concern.

 

[caveman]

"Are you suggesting that Bob be paid a rate for his time, assets etc AND receive a share of the profits? An interesting view."

This is how it should be surely. Bob should be paid for the labour and a return/ depreciation on any of his assets. Also land rental be cgarged. then the profits after this are split on an equitable arrangement .

Under such an arrangement.
Surely Jon should make a charge for his capital, equal to what he could of obtained elswhere, before the "profits" are split?

 

[unlacedgecko]

"Are you suggesting that Bob be paid a rate for his time, assets etc AND receive a share of the profits? An interesting view."

This is how it should be surely. Bob should be paid for the labour and a return/ depreciation on any of his assets. Also land rental be cgarged. then the profits after this are split on an equitable arrangement .

Really? If that was to happen, why wouldn't Jon merely rent some land and employ a stockman. That way he would still be bearing all of the cost, but would get to keep all of the profit.

BQP pay most of the cost for pig finishing, but the finished provides labour, buildings and straw. They are paid a flat fee for this, no profit share.

Share milkers provide stock and labour, but receive no management fee just half the income. In my mind it has to be one or there other...

 

[Jon75]

So, scheme B. The purchase of heifers in calf for investors....

What are peoples thoughts on that? lol

 

[gone up the hill]

So, scheme B. The purchase of heifers in calf for investors....

What are peoples thoughts on that? lol

Well as your figures are so one sided and you only made a profit because your business partner didn't ( or rather wasn't allowed ) to charge a sensible figure for his sheds/ time etc etc then anyone getting into business with you will come off badly.

 

[Poorbuthappy]

I don't see the problem with what Jon has told us. Basically a share farming agreement where 'Bob's getting the bigger share of the profits for providing everything but the capital.

 

[massey765]

Well... at least Bob will be left with the muck

 

[Jon75]

I don't see the problem with what Jon has told us. Basically a share farming agreement where 'Bob's getting the bigger share of the profits for providing everything but the capital.

There are no issues. The negativity is to be expected on an internet forum. Whatever subject a forum discusses the same attitudes always surface. Sadly it highlights why the UK economy isn't doing as well as it could. The negativity, lack of creative thinking and other negative aspects all rearing their ugly head.

In the meantime though we'll just get on with it. The heifers in calf idea is loosely based on what someone else is doing and I'm certain will work very well too. Thanks for all the input.

 

[Alicecow]

Just caught up with this thread. Found it very interesting. Would be interested to hear how you got on with the bulls, and also if you did similar again (with a few tweaks if necessary) to see how the two compare to each other.

 

[Jon75]

Just caught up with this thread. Found it very interesting. Would be interested to hear how you got on with the bulls, and also if you did similar again (with a few tweaks if necessary) to see how the two compare to each other.

Hi Alice. The bulls should be gone next wednesday and all the 'tweaks' have been agreed and so yes, this will be being repeated. I've just started purchasing replacements as I type.

I won't be updating the thread again though I don't think. I'm happy to discuss matters with sensible and positive people via PM though.

 

[Gatehouse Farm]

I won't be updating the thread again though I don't think. I'm happy to discuss matters with sensible and positive people via PM though.

That's a shame, it's a interesting thread.

 

[Guiggs]

Don't let the usual negative moaners put you off... they'll happily criticise anything and everything a little different that people try, after all they know best because their hand me down farm has been ran the same for 3 generations so their way is the only way!

 

[wilber]

I won't be updating the thread again though I don't think. I'm happy to discuss matters with sensible and positive people via PM though.

That's a shame, it's a interesting thread.

+1

 

[pellow]

Very interesting reading this thread, some criticism is good for the debate and you answered it all well

 

[Jon75]

Don't let the usual negative moaners put you off... they'll happily criticise anything and everything a little different that people try, after all they know best because their hand me down farm has been ran the same for 3 generations so their way is the only way!

I've spent many hours reading various sections on this forum. It's very apparent to an outsider looking in that there are two big glaring issues with UK farming. The first is people being stuck in their ways and the second is a lack of understanding when it comes to economics. I've had conversations with other people that don't keep records as basic as purchase price, costs and final sales figures etc. I'm genuinely unsure how you can run a business without doing that.

Anyway, I've just read my last message, it does come across as too negative!! The last animals from the initial purchase were sold today. They did 10% better than the heifers in the ring so all good here. I'm happy we pulled it off. Onwards and upwards now. Lots of new ideas need testing.

Thanks to all those who offered constructive feedback.

 

[Highland Mule]

I've spent many hours reading various sections on this forum. It's very apparent to an outsider looking in that there are two big glaring issues with UK farming. The first is people being stuck in their ways and the second is a lack of understanding when it comes to economics. I've had conversations with other people that don't keep records as basic as purchase price, costs and final sales figures etc. I'm genuinely unsure how you can run a business without doing that.

Something we most definitely agree on.

Thanks to all those who offered constructive feedback.

I suspect that this doesn't apply to me, but whilst I stand by my opinions, given in good faith but with hindsight clouded by not knowing the whole picture, I sincerely wish yourself and your business partner all the best.

 

[Tom_o_m]

I'm annoyed greatly when i read a report that we need to cull more deer in the UK one day and then see imported venison for sale in the supermarkets!

There isn't a great deal of incentive from the game dealers, we eat a lot of venison but sell excess to cover some of our costs. We really don't get a great deal, despite the eye watering numbers wild venison commands in butchers.

 

[dannewhouse]

when you sold the heifers you said one cost 130% more than another but made the same at the end, they may have sold them as a pen of say 5 you bid per head but as a buyer I value them up individually and work it back to an average so its not strictly true that they all made the same price ...

looking at our cattle from years gone by sometimes we have bought animals and sold them 2 months later for 4-500 more! yet others we've kept 6 moths for 200! it can be many factors including market trends how they grow etc everyone would say only buy the 4-500 yielders but it doesn't work that way they don't come with a prediction on sale day!.

as for the in calf heifer idea I would like to hear more of that as money is wats restricting my suckler herd, I'm not sure I want someone else having profit share in that way though.

all in all glad it has worked for you and glad you are repeating the experiment and haven't fallen out etc. I do just wonder would you have been happy if you had lost 1 or 2 < just run this costings through to see how you would feel then?

 

[dannewhouse]

its not uncommon for similar ideas in milk herds whereby you "rent" cows in?