Reviewing Cow-Calf Share and Cash Lease Agreements

By Scout Nelson

Cattle markets have experienced major changes over the past year, affecting the value of beef cows and the costs of raising calves. Higher input costs and changing cattle prices can make it difficult for cow owners and operators to decide what is a fair lease agreement.

For the upcoming 2027 production year, Aaron Berger of the University of Nebraska Lincoln Center for Agricultural Profitability encourages cow owners and cattle operators to review their cow-calf share and cash lease agreements. The review can help both parties understand their contributions and agree on fair compensation.

A cow lease agreement determines how the owner of the cows and the person managing the cattle share costs, responsibilities and returns. Agreements can use a cash payment or give the cow owner a percentage of the calf crop.

Several factors can affect what is considered fair. Four major factors for cow owners are the average value of the cow herd, the value of cows when they leave the herd, the replacement rate, and the expected rate of return on the value of the cows.

The average market value of weigh up cows and bred cows starts 2026 at strong levels but becomes somewhat lower after reaching highs earlier in the year. These changes can affect the amount a cow owner expects to receive through a lease.

Drought conditions in several major beef producing states also affect lease decisions. Dry conditions can reduce forage supplies and increase the need for purchased hay and feed. Hay prices are also higher than they were in fall 2025, while hay and grain costs are expected to remain higher this fall than they were a year earlier.

These changes are important because the cost of keeping a cow is a major part of a cow-calf operation. When feed and other costs increase, both parties may need to review how income and expenses are shared.

The relationship between the value of a bred cow and the value of a weigh up cow is another important part of the calculation. Cow owners need to consider how much value they have invested in the herd, while operators need to consider the costs of caring for the cows and raising the calves.

A cash lease gives the cow owner a set payment, while a share lease gives the owner a percentage of the calves produced. Each method has different benefits and risks. The best choice depends on the responsibilities and resources provided by each party.

The University of Nebraska Lincoln Center for Agricultural Profitability hosted a webinar in fall 2024 called “What is Fair in Cow Leasing: Cash vs. Shares.” The webinar explains differences between cash and share leases and discusses important topics for cow owners and operators to consider before signing an agreement.

The UNL Beef website also provides resources for developing fair lease arrangements. These include the Beef Cow Share Lease Agreements Extension Circular 841 and a video explaining the Cow-Calf Share Lease Cow-Q-Lator. The Cow-Q-Lator is an Excel-based tool that can help users compare lease arrangements and estimate fair returns.

Annual reviews are useful because cattle prices, feed costs, cow values, and other expenses can change quickly. An agreement that was fair one year may not provide the same balance when market conditions change.

A successful lease should clearly explain each person's responsibilities, costs, and expected returns. Cow owners and operators should discuss who provides feed, labor, veterinary care, breeding services, pasture and other inputs. They should also agree on how calves and other income are handled.

Reviewing an agreement before the start of a new production year gives both parties an opportunity to make changes. Clear communication can reduce disagreements and help create a long-term business relationship.

Cow owners and operators with questions about cash or cow calf share agreements can contact Aaron Berger at 308-235-3122 or aberger2@unl.edu to discuss their situation.

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