Neighbor's cattle profits

[herofan]

I was recently having a casual conversation with a friend about cattle prices and making a profit. He doesn't do it for a living, but has an established 20 cow/calf operation in beef cattle. He cuts and rolls his own hay, but doesn't raise crops or anything else on the farm. He said he recently sold 19 calves, which i assumed were around 500lbs and a mix of steer and heifer, for over $14,000. He said the money was great. He said he had around $500 in hay and around $1000 in all other expenses for the year. So, it appears to me he made $12,500.

We were just talking casually, so I wasn't looking at his books and I wasn't going to drill him for more personal information, but that was what he said. In my mind, I thought even if that was doubled and he had $3000 expenses, he still made $11,000. I can't speak for my own situation because I have heifers and haven't sold any yet. But aside from the cost of buying the heifers and fencing expenses for getting things back in shape, other costs don't seem to amount to much. I've often thought, if i had been going a few years and had the cost of fencing and the heifers out of the way and had about 16 to sell, I'd be sitting pretty.

I know there is always talk about not making much, and I realize there can be unexpected tragedies, but overall, is my neighbor or I missing something? That seems like good profit to me.

[TennesseeTuxedo]

Shhhhhhh...Herofan, don't let anybody find out about your neighbor or before you know it everybody with a few unused acres will be sticking cesspool bred Angus cows on it and doing the same.

[herofan]

Shhhhhhh...Herofan, don't let anybody find out about your neighbor or before you know it everybody with a few unused acres will be sticking cesspool bred Angus cows on it and doing the same.

Hmmm. From what information i have provided, I assume you feel he is doing something wrong?

[TennesseeTuxedo]

Not at all. He's doing just fine.

Now technically he should take his property taxes and other expenses into account but on the surface his math makes sense.

[ALACOWMAN]

thats just talk.... it aint cut and dry... be a few years at these prices, before we can really say were making money.....................

[J&D Cattle]

What's the old saying, asset rich and cash poor?

[shaz]

You really have to go by tax records. That's the only fair comparison. Otherwise is just accounting and he's probably not mentioning infrastructure type stuff. That's where a noticeable amount of my money goes.

How bout Self-Employment tax?

[hooknline]

You really have to go by tax records. That's the only fair comparison. Otherwise is just accounting and he's probably not mentioning infrastructure type stuff. That's where a noticeable amount of my money goes.

How bout Self-Employment tax?

Been paying that se tax for 20 years. Don't even get me started

[shaz]

You really have to go by tax records. That's the only fair comparison. Otherwise is just accounting and he's probably not mentioning infrastructure type stuff. That's where a noticeable amount of my money goes.

How bout Self-Employment tax?

Been paying that se tax for 20 years. Don't even get me started

I think se tax is
I'm paying it and I'm not self employed.
wtf?

[hooknline]

If you don't get w4 from an employer and claim income then that income not from the w4 is self employment income. Taxed at a higher rate of course.

[salebarn junkie]

He forgot the cost of the tractor,hay equip, bull cost just to name couple of things.

[herofan]

He forgot the cost of the tractor,hay equip, bull cost just to name couple of things.

His equipment has all been paid off for several years, so their was no actual money out of pocket recently.

[Caustic Burno]

He forgot the cost of the tractor,hay equip, bull cost just to name couple of things.

His equipment has all been paid off for several years, so their was no actual money out of pocket recently.

There is taxes, fuel, fertilizer, repair's, vet supplies insurance and so on.
I can barely fill a tractor for a 100 dollar bill much less cut rake and bale hay.
Everytime he cranks a vehicle of any kind for the operation it has a cost.
This sounds like another classic case of the guy not knowing his input cost.

[djinwa]

This reminds me of people who go to the nearby casino and brag about all their winnings. The other day it took a few minutes of questioning to get a guy to admit the times he lost money.

I always ask them if everyone is winning so much, how can they afford to build the casino and pay the workers, etc.

Likewise, if cows were such easy money, why isn't everyone doing it?

[hooknline]

How hard can it be to let them eat grass all day?