Protecting Your Rights When Selling Livestock

Updated May 7, 2024
9 min read
steps to sell livestock

Livestock is essential to many economies worldwide. From the nomadic herders to the cowboys of the American West — people have been buying and selling livestock for profit for generations and hundreds of years. However, before entering the world of animal trading, it is crucial to understand the various legal factors that affect this industry.

This comprehensive guide covers essentials to protect you when selling livestock, common mistakes made during the process and how to avoid them, and an FAQ section that covers all aspects of the purchase process. 

Whether you're an experienced trader or just getting started, this guide is a must-read for anyone involved in the livestock market.

3 Steps To Protect Yourself When Selling Animals

Livestock plays a vital role in the agricultural industry as it provides food, clothing, and other products. According to the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS), there were approximately 89.3 million cows on U.S. farms as of January 1, 2023. The data emphasize the importance of livestock to the economy.

While buying or selling livestock may seem like a profitable investment, several factors must be considered. Learning how to protect your rights when selling livestock can help you get the best return on your investment.

To sell livestock safely, there are three essential steps that you need to follow:

Step 1. Have a Business Plan

Understanding your livestock business goals can help you figure out the possible profit you might make. Your business plan should describe the industry and, more specifically, the niche market. 

Record in your plan information where to buy and sell livestock in your area. This is important because you will likely work within a limited geographical space with specific business connections. Your business plan should include the following:

  • Mission statement

  • Marketing strategy

  • Financial statistics

  • Type of business ownership

  • Responsibilities of essential staff members if any

Lenders and investors might ask for this business plan before engaging with you. Therefore, having a sound business plan can help ensure your business stays on track.

Step 2. Livestock Care

Animals are living creatures. They need to be taken care of for them to grow and flourish. If you neglect your livestock, they can become sick or die. Livestock should have the following:

  • Enough fresh water every day
  • Enough food
  • Proper supplements (if needed)
  • Sanitary living spaces
  • Necessary grooming
  • Plenty of room for exercise, including fencing
  • Companions for herd animals
  • Regular human interaction
  • Health checkups

These are the basic necessities for caring for your animals. Paying careful attention to performing these duties may save you time and money.

Step 3. Create a Livestock Bill of Sale

A livestock bill of sale form can help to protect your rights when you sell livestock. The bill could also prevent hardship in the future, as it can be referred to if there are disagreements. This contract can be used to record the parties’ rights and responsibilities and may, therefore, help prevent a dispute.

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Following these steps can protect you when you sell animals because they help ensure you get the best return on investment. Also, refer back to your plan and ensure that every business decision you make is in line with the objectives of your business.

Common Mistakes When Selling Livestock

When selling livestock, there are many factors to consider. Mistakes in judgment or miscalculations can be costly. However, learning from common mistakes others make can help you avoid them and set you up for success. By educating yourself on best practices for selling livestock, you can get the most value for your animals and avoid costly errors that may harm your business.

Underestimating the Overall Cost

You may know the cost of buying an animal, but are you prepared for the costs of keeping it? Before buying or selling small livestock, research how quickly an animal will finish a bag of feed. This information varies across species and other factors. 

If you invest in a goat, horse, or cow, you will need to add the cost of hay, for example, which needs to be changed frequently to prevent illness. 

Depending on the circumstances, water might also need to be added to the overall costs. You might save on the cost of water if you have a well. Still, the electric bill could be considerable, especially if pumping additional water for the animals throughout the winter.

Medical expenses must also be factored in. Veterinary checkups cost money. Supplements and other natural remedies can come at a significant price. A vet might also need to be consulted if an animal is seriously ill or injured; the prescribed treatments or medical procedures can be expensive.

Not Inspecting Animals Before Buying Them

Buying or selling livestock from an auction or an agricultural store can be risky. An animal might appear to be healthy, but that might not be a reflection of its current state. If you aren’t experienced or knowledgeable enough, you might be swayed to make a purchase that should have been avoided.

Selling livestock from a local breeder may be optimal, as a prospective buyer can generally inspect the parents of the offspring on the premises. Again, if you are not knowledgeable, you will be forced to rely on the seller’s recommendations and risk making a wrong purchase.

Not Researching Legal Issues

Living in a right-to-farm state does not automatically give a person the right to keep any animal, any breed, or any number of animals. Farming regulations can differ significantly and sometimes depend on official authorization from a local governing body or be affected by neighbor grievances.

Also, remember to ensure the bill of sale is correct before signing. As with any contract, you should consult a lawyer to ensure the document has all the required information. 

Alternatively, a template may be a good option for drafting a livestock bill of sale. A template can be helpful to ensure that the parties include all the fundamental terms and conditions.

Conclusion

Any business endeavor, regardless of size, requires significant effort and resources to succeed. If you are not proactive in ensuring that your rights are protected, you might find yourself at the center of a dispute. 

Creating a legally binding template that outlines the business transaction details and protects your interests is essential. Such a document can help the parties quickly create the agreement, ensuring that both parties are aware of the terms and conditions of the transaction. It only takes a few minutes to make an agreement that will protect you from disputes in the future.

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Frequently Asked Questions

Why do I need a livestock bill of sale?

A livestock bill of sale is a vital legal document that officially transfers ownership of farm animals. The agreement allows farmers, purchasers, and sellers to formalize selling livestock. A livestock bill of sale warrants the security of a livestock transaction and establishes a legally binding record of what is agreed upon when you sell or purchase livestock.

When should I use a livestock bill of sale?

You can use a livestock bill of sale to formalize transactions when farm animals are bought or sold. These agreements provide the buyer and the seller with legal evidence of the transaction. They show that ownership has been transferred from one party to the other. This becomes important if there is ever a dispute over ownership.

What happens if I don’t have a livestock bill of sale?

Buying or selling livestock without a legally enforceable bill of sale carries significant risks. First, the omission deprives the buyer and the seller of possible recourse. Second, it is difficult for the parties to report the new ownership with the proof provided in a bill of sale. This could result in fines and problems when preparing tax returns.

Do I need vaccination information in my livestock bill of sale?

There are some essential pieces of information to include in a livestock bill of sale. There must be a description of the livestock that is being sold. Included in this description should be the animal’s vaccination information, which is necessary if any future disputes regarding the animal’s health arise. This would help to prove that the animal was vaccinated properly. It would also increase the probability that the animal was in good health before the sale.

Do I need witnesses for a livestock bill of sale?

The buyer or a third party should inspect the animal to ensure that it is healthy from the agreement date to the date of sale. Once any health issues have been ruled out, the sale can be finalized. This happens after the animal has been handed over and the bill of sale is authorized. This may be done in the presence of two witnesses or a notary public.

Will a handwritten livestock bill of sale be legal?

You must adhere to all applicable state laws. Like any legal agreement, a bill of sale may be handwritten. Ensure the writing is legible and free of errors and that the document contains all the necessary information.