Alternatives to Owning Livestock

Grain and Graze 3 - Grain and Graze 3 Risk and Decision Making

Type: PDF
Knowledge level: Introductory

Farm Table says:

We often don't think there are alternatives to owning livestock, particularly sheep. But, there are! Read about profit sharing, agistment, share farming and livestock leasing options. Great examples and case studies.

Alternatives to owning livestock include:

  • profit sharing
  • agistment
  • 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.
Australia - Grain and Graze 3 - Grain and Graze 3 Risk and Decision Making
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