NuWireInvestor.com, a Web site that proclaims it provides up-to-date investment news on a wide range of investments not effectively covered by traditional media sources, included a story today about investing in purebred beef stock. For information, reporter Beth Anderson contacted UC Cooperative Extension livestock and natural resources advisor Glenn Nader.
The article says the growth of artificial insemination as a tool for improving the genetics of cattle herds has opened up new opportunities for agricultural investors. Investors can purchase a bull and sell "semen units," which the article says go for a few dollars to $50 each.
Cliff Lamb of the University of Minnesota told the reporter that the most popular bull now sells about 100,000 units of semen a year, and if you value his semen at $20 per unit, gross income is about $2 million.
Nader said bulls can be purchased for less than $10,000, but he recommends heading for a slightly higher price point in order to get the highest quality bulls, whose semen will generally be in higher demand and thus command a higher price.
“To capture the kind of genetics that is worth semen collection, in beef cattle...$10,000 or more needs to be expended,” Nader said in an e-mail interview, according to the article. “Also remember that they can get sick and die the next day, so...purchase livestock mortality insurance.”