Ruralmissouri":3gy9l3uh said:
I'm in a very similar situation to the original post. I own and live on 200 acres I own free and clear in southwestern Missouri. The land has been leased for a couple of years at $65/acre/year, but I am not satisfied with various aspects of leasing. Although the man leasing my place has good intentions, he falls short of his commitments every year. My land is good and produces a lot of grass, plenty of access to water, and is cross fenced. I figure I can stock the place with 50 cows and still keep 30 acres back exclusively for hay production. I have a tractor and bushhog, barn, etc. My plan is to purchase second period cows in about 6 months so they'd calve in the spring of 2018 or possibly purchase third period cows asap. I'd like to borrow the money from FCS to purchase the cattle and use a portion of the property as collateral. If they won't loan the money, I could draw out half of a retirement fund to pay cash for them. Additionally, I've got enough cash on hand to carry me a couple of years until I can sell some of the offspring. I've been out of work for 18 months so I've come to a crossroads - either get my own cows while the prices are down and run a cow/calf operation or sell the place and move on to where there are more opportunities. Thoughts? Ideas? :bang:
Couple of thoughts; have you been involved in the actual day to day of raising cattle before? Seems like you have a fair idea of things knowing that the price of cattle are down and owning some equipment and the land free and clear. Since you have been out of work for 18 months, and still figure that you have enough cash on hand to carry you a "couple of years", then to me the whole thing hinges on; "Do you want to have your own cattle???"
Me, I would do something like get 25 bred cows asap. Then pick up say 25-30 feeders to give you a return on your money a little sooner. May not make much on them, and no one knows what the prices will be in 6 months. The price of feeders has leveled out a bit now. It's not great and we all liked that 2.00 to 3.00 lb stuff ALOT, but they have settled here VA in the 1.00 to 1.40 lb range for 5 wts for steers. Heifers are cheaper, avg in the .90's for anything from 4 to 8 wts.; and so many are talking about retaining alot of their heifers so they may get cheaper. How you would finance them would be your choice to make. Can you borrow against your retirement? That might be an option at a better interest rate. Here, I'd buy something in the 6 wt range; our market around here seems to not favor that size and they go a little cheaper; then feed them up to 8-900 lbs and sell them. If you bought @ 1.25 lb @ 600= $750. Then sold @ 850 lbs @ 1.10 = $935. Even at 1.00 lb that would be 100 per head more than what you paid in only say 4-5 months. I am trying to be very conservative on time/weight gain. That is with very little inputs/grain and mostly all grass/hay. Which yes, does cost something. What I am getting at is since you are not working, you aren't putting a money value on your time right now. While you are turning over these steers or even heifer feeders, your smaller cow herd will be having some calves to get you to a place where you can sell their calves at 6-7 months next year.
There was a bred heifer sale here last week, just commercial and most were pretty decent and they didn't go over 1200 head. I don't like to buy heifers, only older cows, as we raise most all replacement heifers out of our own cows, but we buy and sell some cows to help keep up with the various places we rent. And I don't buy the "best" cows, mostly the avg or below and we do okay. Make some, lose some, but mostly pretty okay.
We are not set up that well to keep alot of 4-6 wt stuff due to fences and the greater requirements of feed and where we can keep them. So we sell mostly feeders in the 4-550 range and keep 20-30 heifers to raise up; and concentrate on the cow/calf operation. But we do dabble in a few small groups of feeders when we can buy them at a reduced price on an off week. Everything we have is rented, except for a 75 acre farm, that is mortgaged, that we just bought. So we have to pay out rents and mortgage payments and some equipment payments. We make all our own hay, sell a couple thousand small square bales to help pay haying costs, and do some custom bushhogging too. Both my son and I work full time jobs although I am close to retirement.
The thing is, WE WANT TO DO THIS. We'd have to be crazy to do this to get rich - well maybe we are just crazy anyway. :deadhorse: :bang: . But if your place is paid for, and you don't have to put out alot of money except for the animals, I think you could do it and make a modest living at it. If it isn't what you like, then NO don't do it. Do you want to move? Do you have any friends that are farming that you could just sit down with and see the nitty gritty of the day to day expenses? You are going to have some losses, cows get sick, calves die....the market isn't good but I think it is near bottom, although it may sink a bit more. I don't know if we will see the highs we saw for a long time, IF EVER AGAIN in my lifetime, but I think that there will be a leveling out. If you can buy right, them you should be able to get back what you have invested, if you decide to sell out at pound prices if you also have at least one calf crop to sold. The import market is a big IF, but with Trump in there I think that it might not be as wide open as it might have been. That might hurt our exports too...so it's a wait and see game. Most farmers that I know, and most on here, seem to think we will be better off with Trump in, so we will just have to see how it goes. Also, the drought conditions will dictate whether there will be a sell off of breeding stock and that might boost prices. If the prices in the store would reflect the lower prices we are receiving then there would be an increase in consumption and help to stabilize the prices too.
WHAT DO YOU WANT TO DO????
