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Ownership and Marketing Agreements for Custom Fed Cattle

By Steve Boyles
Last week in the OSU Beef Team Newsletter we had an article on Custom Cattle Feeding; a Retained Ownership Option.  A cattle feeder and reader of the article shared this valuable, additional information on ownership and marketing topics.
Having fed in several custom lots, I would not deliver cattle without having a Bailor/Bailee Agreement in place. This is different than a lien. The banks put liens on you, the cattle are collateral. They don’t care if they get paid from the sale of cattle or a load of turnips.
The Bailor/Bailee Agreement shows all parties involved (cattle owner, feedlot and should it get to this, banks, stockyards, packers, sheriff, courts) who is/are the owner(s) of the cattle. Without this it’s one person’s word against another’s regarding who’s cattle they are. I could tell you some real horror stories and unfortunately, possession is 9/10ths of the law. This is also for cattle being placed on another person’s grass as stocker cattle. As always, the cattle owner must do her/his due diligence in checking reputation, tagging, describing, third party verification, etc.
The cattle owner needs to understand when their cattle will be marketed.  If the cattle owner wants to be consulted on when the cattle will be sold, make sure that is part of the agreement.  Make sure that the feedlot knows that you are to be consulted before fat cattle are sold, this is not always the case. Some feedlots have deals with the packers to just load and send cattle and get paid on the previous weeks average.
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