Investment Question

[nkotb]

I have an associate interested in possibly investing in the show cattle business.  He is thinking purchasing a nice heifer and showing her then entering into embryo production and selling embryos is the way he wants to go.  I would be in a consulting role in this operation.  I am thinking the better option for both of us would be to utilize his purchasing power and buy a couple cows/bred heifers and we lease into our herd, and pay some % of calf sales.  The other thought I had was to let him purchase into the flushes we are currently doing/have planned, and give some % of the calf sales.  My questions are:  What % is fair in either the flush or lease options?  Is it a plausible enterprise or is it best to turn him down?  He is used to feeding cattle and large losses don't bother him as long as there is a chance/plan to return the lost funds.

 

[Jive Turkey]

"Investment" and "show cattle" are two words that do not belong in the same sentence.

 

[SimFarmer]

Show cattle is more of a hobby, or a side job, than a business except for a few farms that have been at it for a long time. It can become a business but is very difficult unless you have the perfect formula of reputation, genetics, funds and knowing the right people. However, if you really want try it, I'd say that any percentage is fair as long as the costs are split at the same percentage. Another option would be to sell a flush and guarantee a certain number of embryos, any embryos above that can be split or paid extra for. Good luck!

 

[BroncoFan]

As someone that is pretty new to selling show cattle, its tough to make a go of it if you don't have the right kind of customers. I agree reputation is huge. Success breeds success. The tricky part is getting a calf into a barn that will maximize the calf's potential and be competitive.

 

[nkotb]

"Investment" and "show cattle" are two words that do not belong in the same sentence.

While I asked the question, I feel the same way.  We currently operate as a "hobby" operation with all parties, having off farm jobs.  We sold a heifer last year the saw a substantial amount of success, but even with that, has taken 5 years to get to a point where we are selling most of the calves we feel are show quality.  Said "investor" knows of our success and is looking for an avenue for his money outside of feeder cattle.  I do feel like the amount of money he is talking about is substantially more than what I am thinking of.