Good grazing and available cash don't always arrive at the same time. You might have room for another mob while money is committed to the rest of the farm. Farm working capital is the money that keeps the business operating between payments coming in. When you're considering a livestock purchase, the useful question isn't simply whether you can pay for the stock. It's whether the farm can carry that purchase and its ongoing costs until the sale. This guide sets out a practical way to think about the decision, whether you're using your own funds, discussing borrowing or considering a grazing partnership.
Start with the timing of cash
Put the proposed purchase on a calendar alongside the bills your farm already expects to pay. Mark the likely sale window and when you expect the money to reach your account. Those may be different dates. A plan that looks comfortable over a full year can still leave a difficult gap in one month.
Use your own records as the starting point. Separate payments you've already committed to from estimates that could change. A cash flow forecast helps you see when money is expected to arrive and leave. Business.govt.nz provides a free forecaster if you'd like a structured place to start. Keep updating your plan as actual figures become available.
Look beyond the purchase price
The price of a mob is only one line in the decision. Write down the other costs you expect to pay before the animals leave. Depending on your arrangement, these might include transport, selling costs, animal health inputs or additional feed. Ask for quotes where you can instead of treating every cost as a rough allowance.
Your existing resources matter too. Grass and management time have value even when they don't create a new invoice. Keep cash costs separate from the wider question of whether this is the best use of your farm. That makes it easier to see both the funding requirement and the practical trade-offs.
Compare funding arrangements on the same basis
Using your own cash, borrowing to buy livestock and grazing animals owned by someone else create different obligations. Before comparing them, write down who owns the animals, who funds the purchase and how your farm gets paid. Then compare the same mob, grazing period and expected costs under each arrangement.
If you're discussing finance, ask the provider to explain the total cost, payment dates, security requirements and what happens if the sale is delayed. If you're discussing a partnership, ask how the proceeds are calculated and which costs fall to you. Don't assume that two offers with similar headlines leave your business in the same position.
Decide what cash needs to stay available
Before allocating money to more livestock, decide what the farm needs to keep available for its existing commitments. That discussion should include the people who help you manage the business. There's no single cash buffer that suits every farm, so avoid copying a figure from an operation with different costs or seasonal demands.
Be specific about what would happen if an expected payment arrived later. Which commitments still need to be met? What decisions could you make early? The point is to understand your options before cash becomes tight. A bigger mob isn't automatically a better outcome if it leaves you with less flexibility across the rest of the operation.
Test a less favourable outcome
Build a second version of the proposal using assumptions that are less comfortable. You could look at a later sale, higher agreed costs or lower sale proceeds. Change one assumption at a time first so you can see what matters most, then consider how several changes could affect the same cycle.
You don't need to predict the season perfectly. You need to understand which assumptions your decision depends on. Record the points at which you'd review the plan and who would be involved. Discuss these scenarios with your advisor or funding partner using the same figures, rather than relying on a broad assurance that things should work out.
Make the feed plan part of the capital decision
Available capital doesn't create grazing capacity. Before choosing how to fund another mob, check how it would fit alongside the animals already on your farm. Consider the proposed arrival date, likely grazing period and the commitments you've made for that land. Keep those details beside the cash forecast so the two plans tell the same story.
A purchase that needs an optimistic feed outlook deserves another look. Discuss what you'd do if the mob couldn't stay for the intended period. Would an earlier sale be possible? Who would arrange it? The aim is a plan you can actually manage, with a clear process for dealing with change.
Where a livestock partnership may fit
A grazing partnership can be worth exploring when you've got suitable capacity but would prefer to keep purchase capital in your business. With Tayb, we fund the lamb purchase. The farmer provides grazing and management, with sale proceeds split 50/50 under the farm agreement. It's a different arrangement from borrowing to buy your own stock.
That doesn't make the farm's contribution free or remove every risk. Tayb sets out the 50/50 calculation, costs, feed, freight, mortality and timing in each farm agreement. Ask for the full terms and compare the payment you might receive with your responsibilities. The existing guide to lamb grazing partnerships explains the ownership and agreement questions in more detail.
Bring a clear proposal to the conversation
Gather your likely stock numbers, arrival window, grazing capacity and expected costs before talking to a provider. Add your existing commitments and the questions your forecast has raised. You don't need a polished presentation. A clear account of your operation gives everyone a better basis for discussing whether an arrangement fits.
Take written terms to your accountant, lawyer or farm advisor before committing. Ask them to check the proposal against your wider business, not just the expected livestock sale. A useful outcome is a decision you can explain: why the stock fits, how the costs will be carried and what you'll do if the cycle changes.
PUT THE NUMBERS ON THE TABLE
Could it work for your farm?
See how the partnership works, read common farmer questions or have a conversation with Tayb.
Let's talk about your farm