Reviewing cow-calf share and cash lease agreements
Cattle prices over the last year across all classes of cattle have been volatile. These changes in market values, as well as escalating input prices, are impacting beef cow share and cash lease agreements in determining what is “fair” to both cow owners and those who are leasing the cows.
For a cow owner, the following are the four major drivers that determine what is “fair” in terms of a cash lease or percentage of the calf crop the cow owner should receive.
Those factors are:
- Average cow herd value
- Cow value leaving the herd or weigh-up price
- Replacement rate
- Expected rate of return (interest rate) on cow value
The average market value of weigh-up cows and bred cows started the year exceptionally strong but has softened slightly from the highs set in the early months of 2026. Many of the states that are leading in beef cow numbers are currently gripped by drought, and hay prices are significantly higher than they were in the fall of 2025. Hay and grain prices will for the most part be significantly higher this fall than they were a year ago. These changes in market value are affecting what is “fair” regarding the amount of cash lease expected to go to cow owners, or the percentage of the calf crop a cow owner should receive. This change is due to the price relationship of a bred cow versus a weigh-up cow as well as the significant increase in feed prices and other input costs as compared to a year ago.
REVIEW LEASES
For the upcoming 2027-year, cow-calf share leases or cash leases should be reviewed. The lease should accurately reflect the value of what each person will contribute to the production of weaned calves in 2027 and what their compensation should be either in cash or in a percentage of the calf crop.
The Center for Ag Profitability hosted a webinar in the fall of 2024 titled “What is Fair in Cow Leasing: Cash vs. Shares,” which highlights the differences between these lease agreements. The webinar also presents key information that cow owners and operators need to discuss before entering into, or when reviewing, an agreement. The University of Nebraska-Lincoln Beef Watch website has additional resources that can help both cow owners and those leasing cows in determining what a “fair” lease arrangement should be. Two resources are: the Beef Cow Share Lease Agreements Extension Circular 841, and a video explaining the use of the Cow-Calf Share Lease Cow-Q-Lator, an Excel-based spreadsheet found at https://agecon.unl.edu/decision-aids/.
Annually reviewing cow-calf share or cash cow lease agreements is prudent under fluctuating market conditions. For cow share or lease agreements to be successful long-term, it must be equitable for all parties involved.
Have questions about cow-calf share or cash lease agreements? Contact Aaron Berger at (308) 235-3122 or aberger2@unl.edu to discuss your situation and what may be “fair” given your circumstances.
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