| Progressive
BUSINESSMEN HAVE long
used leasing as a
means
to conserve capital while
maximizing business
flexibility.
Assets that have been leased include land, office space, heavy equipment,
farm equipment, tractors and automobiles.
Consider the opportunities
- Lease the
Same High Quality bulls that
you are currently
BUYING
-
Reduce breeding service
Costs
-
Eliminate Wintering of bulls
-
Eliminate Fertility Problems with
your bulls
-
Run More Cows on existing feed
resources
- Have
More Flexibility to change
breed and trait
emphasis
While
bull leasing has been used by some commercial
cattlemen for a number of years, it HAS generally
had an unsavory
reputation among professional cattlemen.
Concerns have centered
around
not having high quality bulls available to lease and making sure
that leased bulls do not introduce
health problems.
The PMB Professional Cattlemen's
Bull Leasing
Program offers the
same high quality bulls for lease that we have been
selling for the past 19 years.
All
bulls that have
previously seen service will
have been re-vaccinated for lepto and vibrio, and
will have had 2 negative Trich Tests before they are sent out for service.
Cost of Service
COST OF SERVICE IS
the TOTAL COST that
ranchers incur TO GET their
COWS BRED.
Many ranchers consider their annual cost of service
to be Purchase Price less Salvage Value divided by the number of years the
bull was used. For example, if a bull was purchased for $2000, used
for 4 years and salvaged for $800, the annual cost of service would be
calculated as $2000 less $800 = $1200 divided by 4 years = $300 per year.
This calculation
LEAVES OUT SIGNIFICANT additional
COSTS. To obtain the
REAL COST OF SERVICE, one must
ADD the
OTHER DIRECT COSTS:
- ANNUAL INTEREST
on the purchase price.
-
MAINTENANCE COSTS - feed,
pasture, mineral, supplement and Vet. costs.
-
PREMATURE LOSS FROM SERVICE
due to injury, infertility or death.
-
ANNUAL FERTILITY TESTING.
-
LOSS OF REVENUE - Instead of
maintaining bulls for the 9 months that they are not in use,
RUN ONE MORE COW - the
PROFIT FROM the
ADDITIONAL CALF should be $100
or more.
The following COST
OF SERVICES TABLES INCLUDE these
OTHER DIRECT COSTS.
Comparison of Cost of Service
Purchase -vs- Leasing a $2,500 Bull
|
Annual Cost |
Purchase |
Lease |
|
Maintenance while not in use
9 months @ $40 per month |
$360 |
|
| Annual Interest @
8% - $2,500 x .08 |
$200 |
|
Loss of Use $2,500
Bull 10% per year
x Purchase Price Less Salvage |
$136 |
|
|
Lost Profit from Not Maintaining
one more cow instead of a bull |
$150 |
|
|
Semen Testing |
$30 |
|
|
Total Annual Cost |
$876 |
$966
(a) |
|
Assume 4 Years of Use Annual Cost x 4 |
$3,504 |
$3,864 |
| Plus Purchase
Price |
$2,500 |
$0 |
|
Less Salvage Value 1900 lbs. @ $.60 |
($1,140) |
$0 |
| Fences -
Facilities |
??? |
$0 |
| Total Cost |
$4,864 |
$3,864 |
| Lease Vs Ownership
Savings per Bull |
|
($1,000) |
| Bull Battery of 30
Bulls |
|
($30,000) |
|
| Basic Lease Cost
is 1/3 of $2,500 |
|
$833 |
| Insurance is 10%
of the Basic Lease |
|
$83 |
| Freight, 10 Bulls
200 Miles Each Way |
|
$50 |
| Total Lease Cost
(a) |
|
$966 |
More Opportunities
- Conserve Capital for Other Pressing Needs
- Increase Uniformity - Lease Groups of Full, 7/8,
3/4 or 1/2 brothers.
- Utilize Market Opportunities Developed by the
PMB Integrated Vertical Cooperative
- Participate in the
PMB Customer Genetic
Evaluation Trials
- Utilize the Cow Power of More Than 3500
Registered Angus Cows in the PMB Genetic Alliance.
- Delivery and Pick Up of All Bulls
- Sight Unseen Satisfaction is Guaranteed
- Performance Data, EPD's and Ultrasound Data are
Available for your Selection
For More Information, call or e-mail us today! |
