Questions to Ask When Developing Winter Cow Care Agreements
Given the current drought conditions in the western and north-central United States, cattle producers are increasingly interested in sending cattle to other places, such as Nebraska, where winter forage resources are available. such as corn residue may be available for grazing. This creates a scenario where many people are wondering what a fair deal looks like for wintering cows. This article will provide things to consider when developing winter cow care agreements.
It is important that these agreements are in writing and specify specific responsibilities as well as ownership of risks in order to avoid uncertainties and disagreements. The goal of a good deal is that there are no surprises and that all parties are clear about expectations and roles. It’s easy to forget what was originally agreed upon. Having a written agreement makes it easy to refer to it when situations arise.
A certain number of questions must be asked and answered upstream.
Expected arrival date and departure date. The number and type of livestock (this can be important when establishing the value of livestock as well as performance expectations). How will the animals be identified? Are the cattle marked? The location where the livestock will be managed. Who will pay the trucking costs between home and place of care? Who will pay the local trucking costs, if the livestock must be moved during the period of care?
Have the cattle ever seen an electric fence? If individual cows do not respect the fences, does the supplier have the right to send them home? How will these trucking costs be managed?
How will the loss of life and missing cattle be treated? One option is to define the initial loss per death that would be at the owner’s expense with an agreement that the operator is responsible for the value of livestock above that level. How will the price be determined? It can be useful to set this price in advance to avoid problems. How will death be verified? Procedures used by insurance companies to verify dead cow losses can be adopted and included in the agreement. This usually involves a licensed veterinarian with the veterinarian fees normally allocated to the owner of the cow.
How will the treatment of sick cattle be managed? How will the processing fees be managed? A common option would be to have the supplier notify the owner of any unhealthy or injured animal so that a joint decision can be made to contact a veterinarian if necessary. It is also a good idea for the supplier to provide the owner with the name and contact details of the vet so that they can contact them as needed.
What will the cattle be fed or grazed on? Will extra protein or energy be provided when grazing? How will the need be determined? When grazing, what are the feed expectations when ice and snow restrict consumption? How will the costs associated with the supplemental feed be managed? Will ore / salt be supplied to livestock. Who pays the costs? How will admission be managed? Will body condition be monitored and diet adjusted? What is the acceptable condition? The herd body condition score should be assigned to the cows when care is transferred and a discussion of expectations regarding the condition of the cows during the care period should take place. Having an assigned physical condition before the cows leave the vendor location is also a good idea. The use of a third party (such as a veterinarian) to assist both parties in assessing body condition is recommended.
Will the cows be mixed with another herd? What are the vaccination requirements for mixing?
Will additional services need to be provided, such as calving cows? What would happen if, for example, cows started to calve unexpectedly?
Livestock and facility inspection? What rights and under what conditions does the owner have the right to inspect the livestock when it is under the control of the caregiver?
Termination of the agreement? What would be the conditions that would allow the owner to remove the livestock / terminate the agreement with the caregiver and vice versa. How much notice must be given?
Payment terms. When and how much. It is common for a certain amount of money to be paid to the supplier up front and then the costs to be billed monthly by the supplier. Will full payment be required before the cattle are returned to the owner (see note on cattle lien below).
Some legal issues also need to be addressed
What are the expectations for liability insurance?
Establish whether the livestock owner is responsible for complying with interstate livestock shipping requirements. Typically this would include CVI veterinary inspection certificate for diseases, vaccinations. Allow at least 30 days minimum to obtain approval. This is necessary both when the cattle enter Nebraska and when the cattle leave Nebraska (unless the cattle are slaughtered in Nebraska). The contract must specify who pays for CVI veterinary services necessary for the interstate movement of cattle for cattle entering Nebraska and cattle leaving Nebraska.
If the livestock is loan collateral, the livestock owner is responsible for obtaining permission from the owner’s lender to withdraw the livestock / out-of-state loan collateral. Failure to do so could violate the security agreement, lead to loan acceleration, foreclosure.
Establish whether the livestock owner or care provider will arrange for the owner’s mark inspection of the owner’s livestock out of state livestock entering and exiting Nebraska.
Agister (caregiver): In Nebraska, an agister (caregiver) has a lien on livestock for unpaid bills. Determine if the caregiver will be paid in full before the cattle leave the caregiver’s premises. Depending on the type of payment, determine if the care provider will notify the owner when payment is made so that the owner can arrange transportation to the owner’s premises. Once the cattle leave the caregiver’s premises, it could be legally complicated to create and enforce the caregiver’s privilege outside of Nebraska.
Winter cow care agreements involve a lot of trust on the part of both parties. It is advisable to get references for the other party when working with someone for the first time. Caregivers may find it helpful to speak with the owner’s lender and others who have dealt with the owner. The owner may find it helpful to speak with other owners that the supplier has worked with in the past.
This resource is intended to provide a list of questions and issues to consider when drafting an agreement for winter livestock care. It is intended for educational purposes. The details of any actual agreement are left to the parties involved, and obtaining legal advice from a licensed lawyer is encouraged when crafting the actual agreement.
Watch the September 2, 2021 webinar, “Considerations When Developing Winter Cow Care Agreements,” at https://cap.unl.edu/livestock for a more in-depth look at creating good agreements for all parties.