We provide six examples of cooperative farming/ranching starts below. You can also check out our case studies here. For more information on any of these arrangements, contact Wyatt Fraas, wyattf@cfra.org.

Example #1: Goal: a place of their own on which to raise cattle and three young children.

This ranch couple had been renting a piece of ground and working as employees. The owner/employer wanted to sell. How to work out the purchase?

The young couple got a bank loan to pay for the ranch home. The owners provided a 30-year mortgage on a portion of the operation. Annual interest payments were made during the first 10 years.

This arrangement allowed the beginning farmer to use the initial 10 years to build the cow/calf operation. The remaining acres carried a crop share lease with a long-range plan for a purchase. After 10 years the young couple will start paying on the principal. If the owners do not survive, the payments will go to their estate.

Example #2: A no equity start.

A young couple became employed full-time, received a wage, and a percentage of the calf and wheat crops. This arrangement allowed them to start building equity over the next few years, positioning themselves to be able to look at renting some acres and perhaps following the example of number 1.

Example #3: With limited experience with cattle and some resources to invest, the beginning farmer found a landowner with a full herd of cows and machinery.

The arrangement began with an initial employment period of 90 days to provide guidance and to demonstrate varying techniques by the older person. A rental arrangement followed the 90-day employment period with an option to buy later. The machinery was valued at approximately $75,100, and a rate of return of 8% was decided upon.

An arrangement was also made on the cattle herd. The two parties agreed to a crop share of 60/40. There was room on the ranch for an additional 30 head of cows that the beginner would own and bring to the ranch.

The 60/40 arrangement allowed for a transition of the cow herd. As the older cows were culled, replacement heifers would come from the beginners’ share. The herd would turn over within approximately 10 years.

Example #4: Turnkey lease of a farrow to feeder operation.

The beginning farmer leased the hog facilities including buildings, equipment, equipment storage, and 142 sows. The lease agreement covered a 4-year period with a 6-month trial where either party was provided a window of one week to serve notice to terminate the lease.

The rent was determined, payable on a monthly basis. The first two months rent was set at half the rate of later payments. Besides the cash rental, the tenant agreed to pay the owner 2 pigs per litter for all litters farrowed during the first two months, and 1 pig per litter for all litters farrowed after that.

Payment on all of these pigs was made within 60 days after farrowing on the equivalent value of a 40-pound pig. All delinquent payments were charged interest of 14% per annum on the unpaid principal balance until paid.

The tenant agreed to maintain the farm in as good condition and repair as at the beginning, with consideration for normal wear and depreciation beyond the beginner’s control. All expenses and management responsibilities were borne by the beginner.

Feed was to be purchased from the owner at market value, with payment within 60 days of purchase. The livestock was insured with the owner as the loss payee. The owner was granted a first lien on all livestock to secure the payment of all rents and other resources as supplied by the owner.

The owner agreed to repair the machinery and maintain the premises for 30 days after the beginning of the lease. The owner retained the salvage value of all breeding stock sold. The owner retained the right to give 30 days notice of termination to the tenant if the sow death loss exceeded 5% or the tenant was more than 30 days delinquent on any payment owed the owner.

Example #5: Employment and ownership of hog herd transfer.

A 10-year contractual agreement, transferring a 200-sow farrow to finish operation, provided for a transition from employment to ownership. In the agreement the beginner was employed full time for the first year.

The beginner agreed to provide management of the farrowing operation and necessary labor for the entire farm. The farm included a cattle herd and crop ground. The beginner provided and maintained a complete set of records of the hog operation including production and expenses. The owner provided livestock facilities, housing, and utilities.

The agreed upon salary and rental share of facilities and operations are presented in the table below:

The agreement provided for 10% of the sow herd to be culled each year. The replacement gilts became the property of the beginning farmer. This arrangement allowed the beginning farmer to gain 10% of not only the herd but also 10% of the livestock marketed each year except for the culled sows.

Example #6: Beginning farmer and landowner formed a 50/50 partnership.

The partnership involved a cattle finishing operation and feed crops. The partnership purchased the cattle together and borrowed all operating capital on an annual basis including a cost of living allowance agreed upon for the beginning farmer. The owner supplied all equipment. The agreement provided that all expenses incurred by the partnership would be paid whenever crops and/or livestock were sold, and the proceeds would be split 50/50.

It was further agreed that as income was received, the beginning farmer would reimburse the partnership for cost of living draws taken. Any remaining proceeds from the beginning farmer would go towards the purchase of equipment one piece at a time. A means for determining the value of each piece of equipment and the order of equipment purchases was agreed upon at the beginning.


In consideration of the fifty-fifty split in the first years, with little or no equity investment on the beginner’s behalf, it was agreed that the owner would continue to receive half of the income for an additional two years once all the equipment had transferred.

A sale of the land to the beginner would be considered after the equipment had been transferred.

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