Cow leasing

[Twin Town]

To all you boys & girls out there far cleverer than I... Could anyone check these figures out for me?
Example.
Purchasing 1 x 7000litre cow for £1100
Lease payment would be £35/month... ish for 36 months
1st lactation would produce 7000 litres and your margins are really good... say 5ppl
7000 x 0.05 = £350 profit from that cow/year
Divide this by 12 months gives you £29.16 profit/month
This leaves you with a loss of £5.83/head/month... is that right??

I know that you've the cow value and calf value to put into the equation but simply on milk values... 36 months isn't a long enough period to make it work?
Please correct me as I'm sure i've gone wrong somwhere !!
Thanks all

 

[jimmer]

Your assuming a £1100 cow will last 3 lactations......

 

[Blue.]

Your profit isn’t enough.........

 

[Twin Town]

Well I'm trying to put some modest numbers down.. sure you can add another £500 on top of that for a goodun... it was just an example.. Does it look right to you ?

 

[jimmer]

What system is this cow going into?

 

[Twin Town]

Your profit isn’t enough.........

I would have thought 5ppl was decent? Just wondering why and how other people are leasing cows.. their margins must be double that?

 

[Twin Town]

What system is this cow going into?

it's hypothetical at the moment.. but I was considering Autumn calving block

 

[Rossymons]

If you cant afford to buy the cow outright then you probably can't afford to lease the cow as the lease company will probably cost more than a bank would.

 

[Milkcow365]

Shouldn’t 5ppl profit be profit so after all expenses including your leasing

 

[Beef farmer]

it's hypothetical at the moment.. but I was considering Autumn calving block

If your a new entrant, dont bank on your heifers year 1 doing 7000l that would be a strong average for heifers. If they did average 7k they would cost more than 1100 quid

 

[Rossymons]

I wouldn't get too excited about heifers in year 1 anyway. Get as many cheap old cows as possible - at least they're used to being milked.

 

[buffalo_soldier]

Wouldn't get too excited about calf/cull value from a 7k cow either.

 

[buffalo_soldier]

Been said above, but don't work out a costing assuming a profit.

 

[jackrussell101]

Does anyone know what percentage of dairy cows are purchased on hp/leased?

There seems to be alot of lease companies for purchasing cows getting about now.

 

[pappuller]

Does anyone know what percentage of dairy cows are purchased on hp/leased?

There seems to be alot of lease companies for purchasing cows getting about now.

Probably more than you think

 

[Beef farmer]

No one on here has ever admitted to it, not that it is a bad thing, but would be intresting to hear some real life costs

 

[som farmer]

Does anyone know what percentage of dairy cows are purchased on hp/leased?

There seems to be alot of lease companies for purchasing cows getting about now.

we have sold, and bought, a lot of cows of an auctioneering group, most of the bigger bunches are all done on leasing, they reckon its the way its going. I also think its one of the reasons why cow trade is high, you go out, and get say £30,000, to buy cows, dispersal coming up, you try and spend in 1 hit, but there are probably quite a few more farmers there with the same view. Buying a few here, and there, or buying in a normal market, it will take a bit of time to get them, and auctioneers today, simply cannot afford to sub you for long. And, when we do sell a bunch, the instructions are very clear, cows do not leave us, until they have, or are certain, the money will be forthcoming, we kept them once, for 5 weeks.

 

[Headless chicken]

No one on here has ever admitted to it, not that it is a bad thing, but would be intresting to hear some real life costs

we priced leasing previously in comparison to cow HP and felt the rate on the leasing was too expensive but I’m told it had tax benefits.

 

[jackrussell101]

I assume leasing company does credit check on farm business first in order to sanction funds, then if ok funds get deposited into farm bank account, then farmer uses monies to buy cows? I.e farmer doesn't buy directly through leasing company? I suppose it's in the farmers interest to get money invested in cows asap as lease payments will fall due?

 

[Cows 'n grass]

I sold 70 earlier this year to someone buying them through a leasing company. The leasing company would only let the farmer buy through a dealer not privately so I had to sell them to Stags.