Drought and its impact on grass production and feed availability are
affecting where and how producers are feeding cattle. When the decision
includes custom feeding cows, there are issues the producer and the
landlord need to consider.
Initial matters
- Date of the agreement.
- Who are the parties in the agreement.
- Prepare a statement that sets out the intent of the agreement that
both parties agree to. For example, the agreement could be for housing,
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feeding and caring of cattle as a result of a drought situation faced
by the owner of the cattle.
“It’s important to include a description of the cattle being housed in
the agreement,” said Graham Gilchrist, business risk management
specialist with Alberta Agriculture in Vegreville.
“This may be outlined on a separate schedule detailing the number of
animals, type of animals, tag numbers, brands and condition score for
each animal.”
The following questions need to be addressed in an agreement.
- How many animals will be housed?
- What form of identification is required – branding, ear tagging – to
identify the cattle in question? If the cattle owner is looking just
for lodging, then all appropriate forms of identification would be the
responsibility of the owner unless otherwise agreed.
- What is the location of the cattle? The agreement should outline
where the cattle will be housed. The agreement should also outline the
right of the owner to inspect his cattle and their condition.
Breeding of females
- Will the females be bred while being housed?
- Who provides the bulls?
- What will be the exposure period?
- What warranties come with the bull if the landlord provides it?
- Who will pay for the cost involved?
“This section would not be needed if the cattle arrive after the
breeding period,” said Gilchrist. “Should it be agreed that the
landlord has the responsibility for this service, then the fee would
take into account bull depreciation, labour and health costs directly
associated with the bulls being used.”
Herd health
- What constitutes a herd health program?
- Who pays the costs?
“Agreement will need to be reached on what condition score the cattle
will be in when the agreement is fulfilled. Associated feed costs to
achieve a desired score should be included within the agreement.”
Veterinarian services
- What latitude will the landlord be given to engage the services of a
vet?
- Who then covers the cost of service and pays for the treatment?
Unless otherwise agreed to, the landlord would be given the latitude to
call the appropriate resources and the owner will pay the costs.
Feed, water, pasture and care
“Feed, water, forage and pasture represent a good majority of the costs
in this agreement. Therefore, this agreement will need to determine the
cost for the direct inputs into the cattle and a return to the landlord
for the use of the facilities,” said Gilchrist. “Use the herd health
section as a guide to build the feeding program.”
Since the cattle owner is lodging the cattle, the cost of replacing
feed, pasture, water and care is the landlord’s. Should the landlord
not be able to provide these items, the cost to find suitable
replacement will be the responsibility of the landlord.
Culls and replacements
There would not be a clause about this unless management of the cattle
was transferred to long term.
Death, strays and insurance
The owner of the animals assumes the death loss unless otherwise agreed
to. There are additional considerations that could be included in the
agreement, such as:
- Should the landlord carry insurance to cover his risks as a landlord?
- Should the landlord require the cattle owner to carry mortality
insurance?
- Should an animal stray and be killed, damaged or put down by a vet or
officer of the law, does the owner assumes the loss unless otherwise is
agreed to?
Disputes and arbitration
“In the case of a dispute, disagreement or issue not addressed in the
agreement, and the parties cannot agree on an outcome suitable to both
parties, the agreement needs a mechanism to resolve the issue,” advised
Gilchrist.
- Should the landlord and cattle owners ask their respective neighbours
to be involved?
- Should the two named neighbours chose a third person and then hear
and decide the case?
- Does the loser pay all costs?
- Do the landlord and the cattle owner agree to live with the decision
and not go to court to overturn the three-neighbour decision?
Terms of agreement
“It is assumed that both parties trust each other or the agreement
would not be entered into in the first place,” said Gilchrist.
Normally the lodging will be for a period of time and the agreement
would outline specific conditions that would allow the landlord or the
cattle owner to leave the lease early.
Subcontracting the care and feeding of the animals should also be
addressed in the agreement. There should also be the option for
extending the agreement and what changes would need to be made at that
time.
The agreement should address whether the death of the landlord or the
cattle owner constitutes an immediate termination of the lodging.
Payment and security
- How will the payment for the lodging be made? When and in what form?
- Should the owner of the cattle provide a non-revocable letter of
credit to secure payment?
- If the cattle owner doesn’t pay, what next? Do the cattle become
collateral in the event of nonpayment?
- What happens if a cheque is returned due to insufficient funds.?
Legal stuff
Which provincial laws (unless both parties reside in the same province)
govern this agreement?
Both parties should consult a lawyer before signing any legal or
contractual agreement.
“These are just a few of the issues involved with setting up a custom
boarding arrangement for cattle,” said Gilchrist. “The issues range
from covering basic production practices to more complex business
considerations.
The key point is that the producer and the landlord share a common set
of expectations.
Should the two parties move from just a lodging agreement into one that
has some degree of shared ownership, a new set of issues would need to
be outlined and incorporated into the agreement.
