Livestock Market Update: Financing bulls with no upfront cost
Defer-A-Bull helps South Otago sharemilker meet bull team cashflow challenge.
Through September and October with hybrid bidr® and on-farm sales, the yearling bull sale season is a prompt for many farmers to apply for a PGG Wrightson Defer-A-Bull purchase agreement. Defer-A-Bull is a proven winner, providing an ideal opportunity to finance a bull team with no upfront cost and no re-payments until the bulls are sold.
Some farmers have subscribed to Defer-A-Bull for ten years and longer. It offers an ideal opportunity to secure capital to fund annual bull purchases. With Defer-A-Bull farmers can invest in a bull team when they need it, without putting pressure on funds when cashflow can be tight.
Kevin Louw is a 50-50 sharemilker with 650 cows, farming in Paratai, South Otago. After a recommendation from PGG Wrightson Livestock Central Otago Dairy Representative Paul Anthony, Kevin has used Defer-A-Bull for several years, and is fully sold on it.
“As a sharemilker, running a team of bulls each year can be challenging. I’ve tried going AB exclusively, and the empty rate was much higher than I wanted, which leads to lost productivity.
“To use a full complement of bulls, with separate teams alternating night and day, ensuring they have enough rest and can do their job properly without going lame or becoming exhausted, is expensive. As a sharemilker that throws up a cashflow problem that is impossible to budget for. I need 20 bulls to maximise my in-calf cows, which requires a cash outlay of around $50,000, and there is no way I could do that.
“We looked at Defer-A-Bull as an option. With PGG Wrightson behind it, you know they will source stock from reputable buyers, which mitigates the risk of buying inadequate bulls.
“After they’ve finished, the bulls come out for two to three weeks, we freshen them up, then send them off to the works. PGG Wrightson takes their money, and you get an account for the balance. It’s never a major shock, and you end up with a far lower empty rate, which of course helps profitability.
“Defer-A-Bull allows me to follow best practice managing my bull teams. I want to do that properly: for cashflow reasons I wouldn’t be able to do it any other way.”
For more information on Defer-A-Bull talk to your local PGG Wrightson rep.