Making Livestock Investments with a Self-Directed IRA

Published on November 24, 2025

If you have cowboy dreams, love the idea of being part of the open range, or want to have an actual horse in the race, you can invest in all types of livestock with a self-directed IRA. Including these animals as part of a self-directed retirement portfolio offers investors interesting ways to diversify their holdings by adding a tangible asset that is not directly correlated with the stock market.

Types of livestock for investment

Livestock is an agricultural commodity comprising domestic animals that are raised for food, labor, materials, and more. They are mammals and include cattle, sheep, goats, pigs, horses, donkeys and mules (a cross between a horse and donkey), oxen, buffalo, and alpacas. Poultry is livestock adjacent but generally not considered to be in that category.

Using a self-directed IRA to invest in livestock

Owners of self-directed IRAs can invest in livestock and earn revenues by:

• investing in a ranch or cattle farm
• investing in a fund that trades cattle futures and options
• purchasing livestock at auction and then selling the animals at a profit
• leasing livestock to ranchers
• breeding (animal husbandry)
• wool, milk, meat, and leather production; by-products
• racing and riding (racehorses or stable horses for equestrian enterprises)
• ecosystem management (land and soil maintenance by grazing, manure production for fertilizer)

Related livestock investments are purchasing pastureland and leasing it to ranchers to use for their animals to graze; or investing in a feed company.

Remember that the SDIRA owns the asset and all income returns to the IRA and expenses are paid by the account. Beware of self-dealing activities, such as the account owner personally benefitting from the investment (or animal products), performing work related to the asset, or keeping the animals on land the investor owns. For example, if your IRA purchases a herd of cattle, the account must also pay for a non-disqualified third party (such as a rancher) to manage the herd’s day-to-day needs.

Livestock investments and unrelated business income tax (UBIT)

Depending on how the investment is set up (LLC, corporation, partnership), there may be UBIT, which applies to certain types of income generated from a business that is considered unrelated to the asset in question. The degree of active trade or involvement will also determine if it qualifies for UBIT (passive vs. active investment). We always recommend our clients consult a trusted, qualified tax professional or advisor familiar with the asset class and UBIT rules. IRS Publication 598 provides a lot of information about UBIT.

If you have any questions about self-direction as a retirement wealth-building strategy, the Next Generation team is here to help, at NewAccounts@NextGenerationTrust.com or 888.857.8058