AN S 226 Lecture Notes - Lecture 30: Market Risk, Liability Insurance, Weaning
2 May 2019
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Non-feed cost considerations: examine labor needs, financing options, tax considerations to beef producers, compare leasing options. Objectives: students should be able to : describe 3 categories of leasing arrangments, distinguish benefits of each to owner and operator, calculate cost of ownership and lease break even for each. Identify placement of risk: total investment per cow was 738. Small increases in all areas are responsible: note that the investment cost per cow is really a large part of the investment cost. One option to control is not to invest so much . Just like the auto industry, this brings up the idea of cow leasing options . Joint ownership: custom hire, used versus new purchase. Why lease cows: wants to start cow-calf enterprise, has experience, time, facilities, wants to cooperate (as long as owner doesn"t want too much direct control) Inefficient management yields lower returns terminated agreement might create problem in selling cows short notice.
