Farm Table says:
Alternatives to owning livestock include:
- profit sharing
- share farming
- leasing of livestock.
These are more common in the cattle industry, however, can be a successful model for sheep producer as well.
Profit sharing can provide an opportunity for both parties to value add a profit that they might not have been able to do on their own.
- Capital investment for both sides is generally low and usually involves an investment of the item to be value added, as well as labour.
- A risk is shared, but not often in equal amounts.
If you have underutilized grass or forage, agistment provides an opportunity for you.
- As a livestock owner, agistment may be a lower cost option to buying supplementary feed and can give current pastures a rest.
- The risk is usually held with the livestock owner and allows the grass/forage owner to earn additional income for very little risk or outlay.
If you are looking to start a farm business or expand and have little capital, share farming might be a good option.
- It may not be as profitable as leasing for the non-capital owner, but it does have a lower risk.
- For the landowners, it allows greater control than a leasing arrangement.
- Both sides share in upsides and downsides.
Livestock leasing allows an owner to step out of the game without losing their genetic base.
- It appeals to the lessee if they want to develop equity in a livestock enterprise with a large initial capital outlay.
- It can reduce the upfront cost of purchasing land and livestock all at once.