Beef is raised in three phases before it is processed: calves are raised on pasture and range land, as feeder cattle they feed on pasture, crop residue, and range land, and finally they go to feedlots, where they are fattened for slaughter. Feeder contracts are a type of futures contract based on young cattle that are sent to feedlots in preparation for slaughter. The Chicago Mercantile Exchange first introduced a feeder cattle contract in 1971.
It is important make sure the agreement is clear as to whether a bailment or an actual sale of the animals is intended. In order to constitute a bailment and not a sale, a fattening or raising agreement should provide that the owner agrees to provide the animals involved to the feeder with the owner retaining title to the animals, and the feeder or raiser is to feed or raise them for sale as the owner deems proper. This form is a sample of a sale rather than a bailment.
The Minnesota Purchase and Maintenance Agreement for Cattle — Feeder Contract is a legally binding document that outlines the terms and conditions between a buyer and a seller for the purchase and care of cattle in the state of Minnesota. This contract is commonly used in the livestock industry to ensure a clear understanding between both parties involved in the transaction. The agreement typically includes key details such as the names and contact information of the buyer and seller, a detailed description of the cattle being purchased, the purchase price, and the agreed-upon delivery date and location. Additionally, it will specify the responsibilities of each party regarding the maintenance and care of the cattle during the feeding period. Specific types of the Minnesota Purchase and Maintenance Agreement for Cattle — Feeder Contract may include variations such as: 1. Full Feeding Contract: This type of contract involves the buyer taking full responsibility for the feeding, health, and care of the cattle until they reach a specified weight or condition as agreed upon in the contract. 2. Custom Feeding Contract: A custom feeding contract involves the seller providing facilities, equipment, and feed, while the buyer retains ownership of the cattle. The seller is responsible for feeding and managing the cattle until they reach the desired weight or condition. 3. Yardage Contract: In a yardage contract, the seller provides facilities, feed, and equipment, and charges the buyer a yardage fee for each day the cattle are in their care. The buyer retains ownership of the cattle throughout the feeding period. 4. Gain Contract: A gain contract stipulates that the buyer pays the seller based on the amount of weight gained by the cattle during the feeding period. This type of contract is commonly used to mitigate price risk and can be beneficial if market prices are expected to increase. In all types of Minnesota Purchase and Maintenance Agreement for Cattle — Feeder Contract, it is essential to clearly specify the responsibilities, expectations, and penalties for potential breaches of the contract. This ensures a smooth and mutually beneficial transaction for both the buyer and seller in the cattle industry.The Minnesota Purchase and Maintenance Agreement for Cattle — Feeder Contract is a legally binding document that outlines the terms and conditions between a buyer and a seller for the purchase and care of cattle in the state of Minnesota. This contract is commonly used in the livestock industry to ensure a clear understanding between both parties involved in the transaction. The agreement typically includes key details such as the names and contact information of the buyer and seller, a detailed description of the cattle being purchased, the purchase price, and the agreed-upon delivery date and location. Additionally, it will specify the responsibilities of each party regarding the maintenance and care of the cattle during the feeding period. Specific types of the Minnesota Purchase and Maintenance Agreement for Cattle — Feeder Contract may include variations such as: 1. Full Feeding Contract: This type of contract involves the buyer taking full responsibility for the feeding, health, and care of the cattle until they reach a specified weight or condition as agreed upon in the contract. 2. Custom Feeding Contract: A custom feeding contract involves the seller providing facilities, equipment, and feed, while the buyer retains ownership of the cattle. The seller is responsible for feeding and managing the cattle until they reach the desired weight or condition. 3. Yardage Contract: In a yardage contract, the seller provides facilities, feed, and equipment, and charges the buyer a yardage fee for each day the cattle are in their care. The buyer retains ownership of the cattle throughout the feeding period. 4. Gain Contract: A gain contract stipulates that the buyer pays the seller based on the amount of weight gained by the cattle during the feeding period. This type of contract is commonly used to mitigate price risk and can be beneficial if market prices are expected to increase. In all types of Minnesota Purchase and Maintenance Agreement for Cattle — Feeder Contract, it is essential to clearly specify the responsibilities, expectations, and penalties for potential breaches of the contract. This ensures a smooth and mutually beneficial transaction for both the buyer and seller in the cattle industry.
