Shed rental or B&B arrangements have become more common in recent years. The Irish Farmers Journal frequently receives queries as to how arrangements are drawn up, the important factors to consider and what sums of money change hands.There is no straightforward answer. The reality is that there is a range of factors that will influence agreements. The most important of these, or common factors that continually re-emerge, are discussed below.
Shed rental or B&B arrangements have become more common in recent years. The Irish Farmers Journal frequently receives queries as to how arrangements are drawn up, the important factors to consider and what sums of money change hands.
There is no straightforward answer. The reality is that there is a range of factors that will influence agreements. The most important of these, or common factors that continually re-emerge, are discussed below.
Starting point
When talking to farmers offering or availing of a shed rental or B&B arrangement, a recommendation made by the majority is to come to a clear agreement at the outset so that each party knows exactly what the terms are.
Failing to do so can lead to complications down the line and, in some scenarios, can lead to the collapse of an agreement or, worse still, legal action being taken. Some farmers who have experienced issues in the past will only enter into an agreement where there is a contract signed by both parties, sometimes in the presence of a witness.
Factors to consider
In the case of shed rentals, deals are most commonly done on a charge per bay. Costs reported for slatted sheds range anywhere from €150 to €400 per bay or 20c to 50c per head per day. The main factors influencing the costs and requiring clarification at the outset are as follows:
Age and condition of the shed – costs are higher where more modern facilities such as associated cattle-handling facilities, calf creeps or lie-back areas, for example, are incorporated into the unit or rubber mats are present. Another factor to consider here is who pays for any potential damage to penning, barriers, water troughs, etc.Electricity bill – this is hard to quantify in the absence of separate meters where more than one shed is present in the yard.Water costs – this may be an issue where animals are on a high-concentrate or ad-lib diet and water is metered or the running of a pump needs to be accounted for.Slurry responsibility – in the past, slurry was frequently seen by both parties as having little use and representing an unwanted cost. Some shed owners (especially those also selling silage) value the slurry as an asset (a suckler cow or finishing animal will produce approximately 1,000 gallons of slurry with a typical nutrient value of €30), while others will try to build in a charge to cover the cost of spreading if the owner of the cattle is not taking the slurry to his own lands.Use of equipment – generally relates to use of a tractor for putting forage in the shed.Washing and disinfecting – this may seem like a minute factor, but there is a potential cost in the labour involved or time factor for power-washing the shed after the winter. All sheds should be offered washed and disinfected to reduce the risk of disease. Availability of forage or feeding by the owner – this will be discussed in detail under B&B arrangements below. B&B arrangements
Some shed rental agreements also offer forage for sale, but they are not B&B arrangements. For B&B arrangements, animals move into the herd number of the farmer offering accommodation, feeding and stockmanship. This is done through a recorded movement on the Department’s CMMS or AIM database.
Nevertheless, some of the criteria used to determine prices for B&B arrangements can be used to determine a value for forage traded. Typical costs for B&B movements are calculated on a per-day basis, with animal class having a major bearing on cost.
Costs can vary anywhere from €1.20/day for light weanlings to €1.80/day for heavier store animals. A rough guide going on the value of silage consumed is detailed in Table 1. A value of €35/t is the benchmark often used for good-quality silage (DMD 70+) at 25% DM. Given the higher quantity of silage present on farms this year, some farmers may be offering silage traded with shed rental agreements at a lower value.
It is important not to let the cost per tonne of silage or bale of silage solely dictate decisions. The quality of silage should also be taken into consideration, as it will have a big impact on animal performance and the level of concentrate supplementation required to achieve target weight gains.
An example of the influence of silage quality on costs is detailed in Table 2. As can be quickly seen, there is a 50c to 90c difference in cost between feeding and supplementing weanlings on good- versus poor-quality silage. This is where another aspect comes into place – agreement on animal performance. Both parties need to agree at the outset an expected level or range of liveweight gain of animals over the period.
Other areas that should be clarified are as follows:
Mortality – accepted levels of mortality and who covers the cost of feeding/value of the animal.Veterinary treatments – does the owner of the animals or B&B farm cover the cost of purchasing veterinary medicines? Likewise, if veterinary treatment is needed, who covers the cost of treatment?Don’t forget
Movement of animals under a B&B arrangement counts as a change of ownership for purposes of the Quality Payment Scheme (QPS). Where animals are moved in and out of a farm for winter feeding, this counts as two changes of ownership. A B&B arrangement may also affect the payment of the QPS bonus if slaughter-fit animals are transferred back into the owner’s herd number and slaughtered before they achieve their final 70-day residency period.It is advisable to contact your insurance company when taking animals on to your farm, as you may need public liability insurance for people entering your farm. The owner may also want to contact their insurance company if they wish to take out cover on their animals. Animals need to be up to date with regards TB and brucellosis testing before moving in and out of a B&B arrangement. 
This is a subscriber-only article
SHARING OPTIONS: