Leasing Dairy Cows
“There are very few items that lend themselves as well to leasing as dairy cows,” says Al Keith, president, Dairy Farm Leasing, Minneapolis. “They provide income immediately and produce calves.”
The company has men covering 19 states looking for good, high producing cows, and hunting for dairy farmers that need additional cows. About 99% of the cows leased out by the Minneapolis company are Holsteins, and about 20% of them are registered cows.
“When a farmer asks us to lease him cows, we furnish the kind of cows he wants whether they’re springing heifers or mature cows half way through their lactations,” says Keith. “The farmer also has final approval of the cattle before he takes them. After he gets them, the farmer is totally responsible for their well being. We tell him to treat them just like he would his own cows, because in a sense they are. If a leased cow dies, the farmer has to replace her. If he decides to cull a cow for poor production or other reasons, which he can at anytime, he must make up the difference between the slaughter price, and the price of a new cow.”
“The dairyman would have these same problems had he purchased the cow,” Keith points out. “Our service is to help him find the kind of cows he wants, without him having to go to the bank to borrow the money to buy the cows.”
A farmer can lease cows for two to five years, depending upon his need. At the end of the lease, he has first option to buy the cows or can renew the lease at a reduced rate. All calves the cows produce belong to the leasing dairyman. The charges depend upon the type of cow the farmer desires whether purebred or grade, her age, plus length of the lease. For example, on a 48 month lease the dairyman would pay $3.30 per month for every $100 the cow sots -- a $500 cow would thus lease for $16.50 per month.
The company buys most of its cows in Minnesota and Wisconsin, explaining that these two states produce larger cows, which dairymen in other states seem to prefer.
Keith adds that acceptance of cow leasing has been very good:” About 65 to 70% of our business is with repeat customers. Also, there are pockets where we have many farmers leasing cows from us, indicating that a dairy farmer who likes the service has told his neighbors and they, in turn, became customers.
For additional information, contact: FARM SHOW Followup, Dairy Cattle Leasing, 25 Groveland Ave., Minneapolis, MN 55403(ph 612 377-1489).
1977 - Volume #1, Issue #2|