Q. Who determines the market value of the herd when we purchase it?
A. We will agree on the value with you or engage an independent valuer as required.
Q. How is the cull value determined?
A. We will agree on the cull value with you at the start. We anticipate that value will be 40-50% of the original purchase price of the herd.
Q. How are deaths dealt with in the lease?
A. The lease payments are calculated assuming 2.5% deaths per year. You are expected to maintain herd numbers.
Q. Who owns any calves born from the herd during the lease period?
A. You do.
Q. Do I still make the decisions around herd management?
A. Yes, you continue to manage genetics, replacement policy, feeding etc.
Q. Aside from paying down debt, what can the money from the sale of the herd be used for?
A. You can use the money for whatever makes sense to you, subject to any agreements you have with your bank. For example, you could use the money for, infrastructure improvements, share purchases or additional land purchases.
Q. Why is this only available to Fonterra farmers?
A. Currently it is a requirement from our funding partners.
Q. How can I be certain on the tax treatment of the lease?
StockCo Capital has obtained a Product Ruling from Inland Revenue to provide absolute certainty to farmers of the tax benefit of herd leasing. The ruling provided by Inland Revenue states lease payments are deductible. View IRD ruling letter
Q. How will my current bank feel about this?
A. We’ve spoken with most of the major agri-lenders. On the basis that you are better off utilising the lease, banks are welcoming this as another source of capital.
Q. What happens if there is a material change in my circumstances during the lease, can I repurchase the lease cows?