Consolidation

[naker]

Two of my neighbours and myself were kicking around the idea of combing our cow-calf operations into one. Whereby we would incorporate combining cattle and machinery into one operation and pay rental on the land therbye keeping it out of the company. Any thoughts or ideas. Has anybody done this before?. thankyou

[cdunbar]

I think it is a good idea to try, although I have no direct experience.
You may be able to negotiate better prices for your supplies if you combine three herds.
One caution I would have is that you should have clear written roles for everyone after the "merger".
You should also have a written agreement for a mechanism to separate again if it doesn't work.
Good luck.

[ianben]

Happening quite a bit over here in UK.All sorts of combinations. Usually one or more partners retires from active farming or diversifises in some way.
Everone knowing what they want and is expected is, I believe, the basis for success.

[tdarling]

I think this is a viable option that smaller operations should pursue. There are many different ways of working together ranging from owning a piece of machinery together to forming a joint operating company (as you suggest). Some of the key issues will be: keeping your agreement simple, making sure you have an exit plan, and deciding whether or not to pool production.

You might want to do some research on joint ventures or look at a couple of Alberta Ag. publications: Business Arrangements, and Operating as a Joint Venture. You can get them by calling 1-800-292-5697