Grazing Arrangement Value - Sheep

[jd24]

Hi Im am trying to put a price on this arrangement.

Landowner Duties - Having Single farm payment
-Productive fields
-New Leys of grass and clover 76 acres in 7-10 acre field
-Cutting Hedges
-Applying fertiliser in spring
-Moving sheep into next field to manage grass
-Twice weekly check
-Option to apply second dressing of fertiliser included in arrangement
-Paddocks available for drenching and shearing including power
-Good access and water

Grazier Duties
- Bring sheep
- Pay

Herefordshire

 

[salers]

£150/acre.

 

[Robertollie]

If he wants to go bankrupt

 

[jd24]

If he wants to go bankrupt

The grazier?

 

[Tim W]

Sounds like the grazier is doing nothing but investing cash in livestock & wonders what return he/she can expect?
Short term (annual) ...somewhere between 3% & -20%
Long-term (over 5+ years ) I would say capital loss of 30%
(all guess work of course)

 

[jd24]

This is my thinking
£65/acre base price
£20/acre for the fert and 150kg/ hectare of 20-10-10 spreading in the spring ( based on £240/ tonne)
£5/acre extra dressing of fert (grazier buys) including hassle of unloading bags( no equipment needed to be brought to site. Thats worth 1 days labour on its own
£10 / acre topping

Moving on it my benefit as much as the grazier to prevent damage - Free

65+20+5+10 = £100???

 

[jd24]

Thinking again SFP pays effectively for topping .... so £90/acre

 

[jd24]

Sounds like the grazier is doing nothing but investing cash in livestock & wonders what return he/she can expect?
Short term (annual) ...somewhere between 3% & -20%
Long-term (over 5+ years ) I would say capital loss of 30%
(all guess work of course)

Why such a big loss??

Likewise you can see it from a landowners angle 76 acres easily £760,000 @ £10000/acre
at £90/acre you are looking at a takings(not profit) of 0.9%
Add in SFP and you at £160 which leaps to 1.6% takings . Again not profit

Farming numbers are ridiculous aren't they ?

 

[Formatted]

This is a really strange arrangement; why not just pay per ewe per week?

 

[BELOWAVERAGE]

At £150 an acre its £11,400, 7 ewes + 1.6 lambs per acre is 851 lambs, put them at £65 apiece is £55,328, I think the grazier is going to have to try really hard to lose money or go bankrupt, and I'd have thought it would carry more than that, but then most on here seem to think land owners should give their ground for free so I must be wrong.

 

[jd24]

Why is this strange? The per acre bit? Nobody that has been over has said they want to do it per head which is how I initially wanted.
As for the other things in trying to add value to the arrangement and not just sit here taking a fee for the grass. My aim is to produce highly productive grass, get paid for it and the grazier also make money.

 

[jd24]

The per head option doesn't seem to make sense either. I give the farmer 76 acres of grass and only puts two sheep on it.....not good for me.

 

[Formatted]

As for the other things in trying to add value to the arrangement and not just sit here taking a fee for the grass. My aim is to produce highly productive grass, get paid for it and the grazier also make money.

Are you the land owner or grazier?

If landlord:
Why are you checking their sheep for them, moving them from field to field and not getting paid for the labour for it?
Why are you not offering an FBT?
Why don't you go and buy your sheep?

 

[jd24]

Are you the land owner or grazier?

If landlord:
Why are you checking their sheep for them, moving them from field to field and not getting paid for the labour for it?
Why are you not offering an FBT?
Why don't you go and buy your sheep?

Landowner... Some of the enquiries I have had have had specifically asked for checking due to distance. Grazing licences are the way forward for us for many reasons.

 

[S J H]

Why not just let the grazier farm it, I have an arrangement where the fertiliser is paid for with the rent, and it's a pita. I can't graze it when I want and I don't know what they're putting on.

 

[jd24]

These articles pretty much explain things

http://www.countrylife.co.uk/property/need-to-know-grazing-licences-9050

https://www.taxation.co.uk/Articles/2014/09/23/331141/where-there-s-muck

 

[Poorbuthappy]

Why not just let the grazier farm it, I have an arrangement where the fertiliser is paid for with the rent, and it's a pita. I can't graze it when I want and I don't know what they're putting on.

Land owner wants to be seen to be farming it in order to claim sfp/ tax reasons?

 

[jd24]

They are two of many reasons.

 

[jd24]

They are two of many reasons.

But we are not just 'being seen' to be farming. We are establishing, producing/ managing a grassland. Not just sitting on our backsides taking money. We also have environmental reasons why we want to graze the farm but we don't have the capital for the sheep right now.

 

[jd24]

Anyway it seems it's debatable the value and I'm no wiser lol