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Herd Leasing - Pricing

What does it cost?
If CowBank purchases a cow for $1,700 to lease to a client:
  • The monthly rental is $38.25 and is fixed for the 5 year term of the lease
  • The price to buy the cow at the end of the lease is $340 (20% of original purchase value)
  • The monthly rental is equivalent to 7.0 cents/litre for a cow producing 6,500 litres per year
The table below shows indicative rental, setup and monitoring fees for herd leases of different sizes.

Herd Purchase Value $100,000 $200,000 $300,000
Setup fee $1,500 $1,500 $1,500
Herd monitoring fee (monthly) $125 $125 $125
Herd rental fee (monthly) $2,250 $4,500 $6,750

 

With the rental payments being fully tax-deductable, the finance cost after tax is equivalent to a normal mortgage rate of ~10% p.a. (where the farmer's average tax rate is around 25%). Applicants should obtain professional advice for their own situation.

(The herd monitoring fee covers the cost of annual NLIS scanning of the herd)

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