If we use the age-old math that herd bulls should be worth five to six times a feeder calf, then get ready for $10,000 to $14,000 bulls this winter/spring! With cow numbers at all-time lows, do you gamble that bulls will be plentiful and cost less? Is it time to consider leasing a bull? The only cardinal rule that applies to bull rental or lease agreements is that no two agreements are the same. This guide will help you walk through several steps to consider, whether you are looking to lease a bull or considering renting out some or all of your own bull battery.
The most important part of any agreement is trust. While a firm handshake is often enough for many cattle enthusiasts, keep in mind half of a herd’s genetics is hopping on the trailer when a lease is agreed upon. That said, a written document signed by both parties is certainly a safer way to make sure the finer details are understood.
Step 1: Insure the bull
This step is critical for high-value herd sires but generally a good idea for both parties. Things happen: Reproductive failure, injury, illness, lightning strikes, etc., can end a bull’s career. Be sure the insurance policy covers the bull regardless of his address, and consider liability should something go wrong. Unfortunately, short-term insurance policies that only cover a breeding season are rare and expensive. The lessee may end up insuring the owner’s bull for 365 days as part of the agreement. The bull’s owner will have to establish a value for the bull on the policy. This should not be the original sale price of the bull if he was purchased but rather a current replacement value.
Step 2: Ensure the bull is reproductively healthy
Even if a mature bull just came off cows, a breeding soundness exam is a wise investment prior to turnout. If leasing a yearling or virgin bull, a breeding soundness exam performed within the last 60 days would be ideal. While the vet is collecting the semen sample, swab any non-virgin bull for trichomoniasis. The test costs roughly $30 to $40 plus any sample collection fees. Since false positives can occur, it would be wise to test him again for trich prior to turning him back out with cows. Additional health history like negative test results for both Johne’s disease and bovine viral diarrhea persistently infected (BVD-PI) are good insurance policies for both parties. These conditions can be economically devastating if allowed to persist undetected.
Step 3: Determine the general lease terms
Basically, how many cows/heifers will the bull cover and for how long? As a general rule, a bull can service one cow for every month of age up to 4 years. Example: A 15-month-old yearling bull should be able to cover 15 cows in 90 days. Don’t overwork a bull that needs to cover a second set of cows immediately after the lease ends. If the bull is following an estrus synchronization and artificial insemination (A.I.) program, the cows that did not conceive A.I. will all be in heat within a week. Extreme heat and humidity during that week could be problematic, especially for a young herd sire.
Step 4: Determine the value of the lease
There are countless ways to do this, but some cowboy math can usually help both sides reach a number that makes sense. The producer wanting to lease a bull has three options: Buy a bull, use continuous A.I. or lease a bull from someone else. Obviously, they have not chosen to buy a bull, so pricing your bull at the equivalent of A.I. is a logical starting point. If a producer uses A.I. at a cost of $50 per cow, they could expect a 70% conception rate. If you assume the leased bull will breed them all, then the following math works: $50 ÷ 70% = $71 per cow. If the actual conception rate is less than 100%, consider a discount, but in most cases it’s not the bull’s fault a cow didn’t conceive. Labor and time savings alone should have value to the lessee.
Another method is to determine the daily cost for a bull standing idle, either in a bull pasture or a barn lot. In any case, the bull costs money to feed, plus the time necessary to do chores and make sure he is on the correct side of the fence. If the bull costs $3 per day to feed, plus $5 worth of time and fuel to check on him, then an $8-per-day lease agreement makes sense. For a 90-day mature bull lease on 35 cows, that’s $720, or only $20 per cow. Keep in mind, the bull won’t be pushing on gates or tearing up feedbunks and hay rings while he’s on lease! Some producers are just happy to have them off the feed bill.
Step 5: How the lease ends is as important as how it starts
The most important factor here is the condition of the bull when he is removed from cows. Make sure both parties understand the expectations and any costs associated with getting the bull back in shape. During summer breeding, long periods of inclement weather can really take weight off a bull. Most bulls will bounce back in short order, but if you want the bull returned to your farm in a body condition score (BCS) of 6, make sure there is ample time for the bull to recover before the trailer door opens to his next set of females.
Also consider the genetic value of the bull; if the bull offers enhanced growth or carcass merit, then the lease price should reflect that. Likewise, if the lessee has a desirable set of cows, maybe lease the bull for a pick or percentage of the calves at weaning. All said, bull lease or rental agreements can be beneficial for both parties, as long as the terms and details are well understood in advance.
More information and a free example lease can be found on the Iowa State University Extension store.
