there was a thread here last year I think on someone who invested in cattle and shared the profit/loss with someone else who looked after them. cant for the life of me find the thread. any clues what to search for?
thanks
thanks
funding someone elses stock
- Thread starter Neddy flanders
- Start date
Some auction marts might still do this but most are now too wary of exposing themselves to risk.
But I suppose the more street-wise marts would retain the passports if they did not have complete confidence in their customer. And they would also have control of how the cattle were eventually marketed to their best advantage.
But I suppose the more street-wise marts would retain the passports if they did not have complete confidence in their customer. And they would also have control of how the cattle were eventually marketed to their best advantage.
- Location
- Caithness
I think i remember the thread you are talking about, was the chap buying calves to rear he supplied the calves and feed and the other chap provided the labour and buildings?
The passport legally has to be with the keeper, the owner can't retain it.
d williams
Member
Can't see where there's enough profit for two people hard enough for one to profit
Two (or more) people take a living on any farm that employs labour. More than one take a share on any farm using borrowed money to buy livestock or feed. Two take a share on any rented farm. On a large tenanted farm with employed labour and an overdraft four parties are taking a cut of profit. Why is a share farming model any different?
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d williams
Member
Yep agree with that there's usually a few around the the table I just don't think the margins are there for to many to be involved
Willie adie
Member
- Location
- Aberdeenshire
us that right. ? well i know this isnt the case in several instances
Agreed, my only point is if the livestock owner is just replacing the bank or landlord at the table, it is a different rather than extra mouth. The difference is that whilst they may take a larger chunk of profit, they will also share any loss. The bank or landlord are less likely to do this. Same if the keeper is replacing employed labour.
little_p
Member
- Location
- Powys / Herefordshire
Did you manage to find the thread after?
If so, I would appreciate if you posted the link.
Thanks.
Daniel Larn
Member
We have plans to use a similar system to fund the purchase of livestock and feed. I'd be interested in seeing this other thread too.
I would say that for it to work well, you have to have a really well organised system.
If you are interested in such a scheme we would love to talk to you about it.
I would say that for it to work well, you have to have a really well organised system.
If you are interested in such a scheme we would love to talk to you about it.
- Location
- Scottish Highlands
Daniel Larn
Member
It looks like they are running a similar idea to us.
It can work really well, but again, it's highly dependant on the system you have. It will work at a small scale, but not likely to be as lucrative.
It can work really well, but again, it's highly dependant on the system you have. It will work at a small scale, but not likely to be as lucrative.
- Location
- Owaka, New Zealand
Reasonably similar to what we do here as well, but our partner is the main stock firm.
They provide finance and the stock, and help with sales - we farm the animals as best we can.
It is much easier than wooing a bank for a term loan based on a bunch of unknown variables, and they make roughly 8.8%pa on purchase cost as a "duration adjustment", this and the purchase price is subtracted from what the stock sell for.
We keep the margin, they own the stock.
They provide finance and the stock, and help with sales - we farm the animals as best we can.
It is much easier than wooing a bank for a term loan based on a bunch of unknown variables, and they make roughly 8.8%pa on purchase cost as a "duration adjustment", this and the purchase price is subtracted from what the stock sell for.
We keep the margin, they own the stock.
- Location
- N.Lincs
Nice one @Highland Mule. I tried to find that thread when the OP started this one, but with no success
I know this is totally off topic but did you use the search facility on here? I've never had much joy with it, either the forum specific bit or the wider Google option.
Daniel Larn
Member
That's a nice way to go about it, and not a bad return for them.
We have a route for crowd funding, they buy a bond that will cover the cost of the calf and everything inbetween, up till the age of 13mo.
When the animal is sold we pay them out at 8.5% aer, we take the rest of the margin and use it to gradually buy our own stock. They love it and so do we, can't give them enough stock.
It helps to guarantee a return on it as well.
- Location
- Scottish Highlands
Nice one @Highland Mule. I tried to find that thread when the OP started this one, but with no success
I know this is totally off topic but did you use the search facility on here? I've never had much joy with it, either the forum specific bit or the wider Google option.
Didn't search, no. I knew I'd replied to the thread, so I went back through my old posts until I found it. Luckily, I'm not as prolific a poster as some...
- Location
- Scottish Highlands
Curious regarding the interest you pay out - it seems high for you to be borrowing money vs. the banking system. Does the lender hold some of the risk of stock death?
Daniel Larn
Member
It is in reality so incredibly low cost.
We are never burdened with debt, as there are no repayments to make in the meantime, we only pay after we have sold the animal and made our money. You don't get that at the bank.
Borrowing nearly £850k over 1 year is very expensive in terms of monthly repayments, and it wouldn't work at even at 4% apr (£73k per month). We would effectively be able to borrow that same amount for about £70k per year all said and done. So it is an awful lot cheaper for us.
It is about as close to a risk-free investment as you can make, for us and them, as we guarantee the return by factoring in the cost of mortality into the rearing cost.
- Location
- Fife
I'm guessing this is dairy replacement heifers?
So you're the farmer or the financier?