Leasing genetics could prove profitable in numerous ways.
Leasing programs are hardly a new concept in the beef industry, but some experts say current industry conditions are making it more appealing.
“Every producer’s costs are different,” says Trenton Bohling, University of Nebraska-Lincoln (UNL) graduate research assistant. “Depending on feed resources, maintaining a bull for a year can cost up to $1,100. Breeding season costs are likely to be around $350. Leasing a bull for less than $750 may be cheaper than maintaining that animal all year. Plus, older producers also find handling bulls for the breeding season is much easier than caring for them all year.”
In addition to economic advantages, lease programs offer a new range of genetic options each year. Most programs provide a performance guarantee and desired genetics can be more affordable through leasing.
“The increasing use of artificial insemination and embryo transfer makes quality genetics more readily available,” says Darrell Mark, UNL Extension livestock marketing specialist. “It isn’t particularly difficult to find a good bull to lease. However, you can only lease what breeders are willing to make available.
“Sometimes you have to purchase to get the highest quality bulls. I recommend that producers look for foundation operations with lease programs that receive progeny data from their top-end bulls. That may give you good access to the industry’s best genetics,” he says.
In assessing a leasing program’s viability, producers should consider related cash-flow requirements. Cost-effectiveness calculations should include the time and effort involved in identifying bulls with desired genetics.
Bohling advises producers to also consider genetic limitations inherent in leasing programs.
“There are generally more bull sales than leasing programs,” Bohling says. “Your bull accounts for half your calf crop’s genetics. Do your homework to ensure the bull fits your needs. Have a thorough discussion with the bull owner for a genuine mutual understanding of your genetic goals.”
Ask proper questions
Among the questions producers should ask before utilizing a leasing program include: What are my ultimate goals? Do I need better genetics to build my current herd? Am I selling calves at weaning or retaining ownership? Do I have the facilities, time and resources to properly care for a bull year-round, even in the most adverse conditions?
Jorgensen Land & Cattle, Winner, SD, offers what they believe is a unique bull-leasing program that provides producers with in-depth carcass data from their core herd dating back to the 1960s and ‘70s. Greg Jorgensen, who has operated the leasing program since it began nearly 20 years ago, credits his father Martin with the foresight to develop the program’s genetic database and remain on the cutting edge of technology in relation to genetic selection.
“Dad conducted ultrasound evaluations on bulls and gathered carcass data well ahead of other breeders,” Jorgensen says. “That data and how he used it for genetic selection has significantly impacted the development of our breeding program. We’ve selected for early, fast growth and efficiency along with strong maternal and carcass traits. Our leasing program allows commercial cow-calf producers in this region to improve calf quality while maintaining profitability.”
Being located in the heart of cow-calf country helps, too. Nebraska’s Cherry County, which sits just south of Jorgensens’ operation, is the largest cow-calf county in the U.S. Meanwhile, Tripp County, where their farm is located, also has a large cow-calf population. “And, being on the extreme western edge of the Cornbelt means we have affordable feed. All those elements work well in terms of bull development,” Jorgensen says.
When a market analysis revealed that the vast majority of bulls sold each year bring $2,000 or less, the Jorgensens looked for a way to make their genetics available to that market segment. “Through leasing, we expanded our bull sales and were able to get into more pastures,” he says.
“Potential for disease transmission is a major disadvantage of leasing,” Mark says. “Ten bulls coming back to a producer have collectively been in contact with over 400 cows from 10 different producers. Most lease programs take protective measures, but disease potential is always there.”
Since herd health was a major concern, the Jorgensens worked with John Voegeli, a Winner (SD) DVM, to develop a health plan.
“Any time a producer brings an outside animal into his herd there are inherent biosecurity risks,” Voegeli says. “Producers need to do their homework and ask a lot of questions about vaccinations, management and potential risk before leasing. It’s best if they involve their regular herd veterinarian in their decision.”
The Jorgensens’ strict health program includes vaccination for IBR, PI3, BVD, BRSV, vibrio, lepto and hardjo-bovis. Because anthrax is endemic to the region, they vaccinate for that as well and cows receive a scours vaccination. Annual Johne’s screening has yet to yield any positives.
Bulls are ear notched for BVD persistent infection at the same time they undergo a breeding soundness exam. No positive ear notches have been found so far, however. All non-virgin bulls are trich-tested, though it’s yet to turn up, either.
“These bulls go all over the country and vaccination needs vary between geographic regions,” Voegeli says. “The Jorgensens routinely visit with their customer and his veterinarian to tailor individual vaccines.”
The Jorgensens identify customer needs to determine whether leasing or purchasing is most advantageous. If producers aren’t comfortable with a bull used in another herd, they have the option to select a virgin bull.
Jorgensen notes that the work involved in operating a high-quality leasing program probably explains why few beef producers opt to develop the service.
“Bull leasing has some negative connotations,” he says. “Some programs don’t offer their best genetics. We have 35 years of diligence and strategy behind our program. Our cooperator herds also have genetic history and data to verify production results. People want value for their dollar. When they realize the economic advantages of a leasing program with strong genetic qualities, it’s an easy sale.”
Loretta Sorensen is a freelance writer based in Yankton, SD.