Buying vs. Leasing

Cattle business can be a tough business. But it needs to be looked at as just that, a business. No matter which way you look at it the bottom line needs to be productive or your business is not sustainable. 

Is it best to buy a place or lease it? This question depends on so many factors. Buying is optimal for many reasons. The obvious being an investment that will appreciate. But the down side to so many individuals trying to make a living on running cows is affordability. It is very difficult to buy a place when you do not own the cows outright. With places being listed from anywhere from $9,000 an animal unit to $16,000 an animal unit and selling, the place just won't pencil. The cow alone will not support the ranch. How can ranchers survive in such a marketplace? Diversification. Depending on the ranch, it may offer multiple other sources of income including, mineral, hunting, recreation/lodging, guest ranch, etc. But when you just want to run cows it is hard to look at it from a different perspective and to put the time into other resources (or have the time!)

Leasing can be a great option for many individuals especially for those just starting out or do not own all their cattle outright. Prices on animal unit vary from area and feed value. But a cow can usually support your lease payment and operating expenses if you are running a lean operation. It is a tough market for lease ground and generally pretty competitive. The ability to network and reach out to individuals in the industry is crucial. 

With a little creativity, will power and a lot of work ethic the cattle business can be a profitable and sustainable business.