300 AU pasture lease

[firestormboergoats]

There is a 300AU pasture lease available for 41 months w/ the option of another 36 months about 4.5 hours from where I live. The question is if I have to borrow money to pay for the cattle will I make any money before the end of the lease when I have to sell the cattle? General consensus is that average profit from a cow is $150 to $250. My math shows me making enough to pay the note and lease and that is about it. A little math help please!

Thanks

 

[novatech]

There are not enough figures here to do the math.

 

[firestormboergoats]

Here is what I have so far

$11 per animal per month--$36k year
300 head--cow/calf pair=1 head
1 bull per 20 head cows

Looking at having to borrow at least 300K on a short term note just to cover livestock, using my own cash to pay for portable pens, meds, etc. Lease length is 41 months w/ a possible 3 year extension.

My thoughts--buy pairs or 3-n-1's to get some positive cash flow as soon as possible. Lease payments are due yearly. Plenty of pasture so feed should be minimum. At 95% weaning rate (280 cows--266 calves) at $550 dollars a head I come up w/ $146300. This is where I lose the math. With the numbers I read on here you only make $100-250 if you know what you are doing so $26600 to $66500. Minus the lease payment and on the low end no money? I understand that I still have the original cattle to sell at the end so I see a profit there just not during the terms of the lease

 

[tncattle]

There is a 300AU pasture lease available for 41 months w/ the option of another 36 months about 4.5 hours from where I live. The question is if I have to borrow money to pay for the cattle will I make any money before the end of the lease when I have to sell the cattle? General consensus is that average profit from a cow is $150 to $250. My math shows me making enough to pay the note and lease and that is about it. A little math help please!

Thanks

How much are you leasing the land for?

 

[MikeC]

With the numbers I read on here you only make $100-250 if you know what you are doing

According to Oklahoma State research:

The national average cow cost per year ranges between $320 and $566 between lowest cost and highest cost producers.

All expenses included.

Consider this......If you happen to fall in the "High Cost" bracket for a year or two, could you pay that note out of your own pocket?

 

[Horticattleman]

Man that sounds a bit risky to just go out and do for the first time. IMHO

 

[Aero]

when making financial plans, you might want to stay on the conservative side; if you make more it will be a bonus. say $100 profit for a well managed herd, if you dont think you will be a good manager in your first years (likely the case) reduce it a bit. as the cattle cycle heads down, so will your profits.

and 4.5 hrs away is pretty far when half of the calves have to be pulled.

 

[sidney411]

The rest of that money will go to:
feed
hay
vet bills
vaccinations
fertilizer
diesel - lots of diesel to drive 4.5 hrs
equipment
equipment upkeep
taxes
fencing
water
supplies
ans that's just a start - the list is might near endless.

 

[bigbull338]

Here is what I have so far

$11 per animal per month--$36k year
300 head--cow/calf pair=1 head
1 bull per 20 head cows

Looking at having to borrow at least 300K on a short term note just to cover livestock, using my own cash to pay for portable pens, meds, etc. Lease length is 41 months w/ a possible 3 year extension.

My thoughts--buy pairs or 3-n-1's to get some positive cash flow as soon as possible. Lease payments are due yearly. Plenty of pasture so feed should be minimum. At 95% weaning rate (280 cows--266 calves) at $550 dollars a head I come up w/ $146300. This is where I lose the math. With the numbers I read on here you only make $100-250 if you know what you are doing so $26600 to $66500. Minus the lease payment and on the low end no money? I understand that I still have the original cattle to sell at the end so I see a profit there just not during the terms of the lease

looking though your figures i see some expenses you missed.an those are your feed hay an mineral costs.as well as repairs on the lease land an vet bills.now lets do your known expenses.280 cows will cost you roughly $252,000.you need 20 bulls cost $35000.900 rolls of hay a yr cost min $27000 a yr hay cost.90 days of grain feeding.say 45 tons of feed at $180 a ton is $8100 a yr.salt an min $2000 a yr.all mine are rough figures.so lets add them up roughly my figures show expenes of $37100 a yr up keep on the cows.on top of that you have to add in your lease payments.pre calf cost is $140 a yr.this leaves you with $106,000 a yr to service your debts.now lets figure your debt payments.im gonna use you have a 4yr lease to figure your bank payments.im using 12% bank int.1st yr int is $36000 a yr.1st yr payments would be $111,000 bank note payment.a loss of $6000 plus loss off lease payments.2nd yr payments $102,000 plus your lease.3rd yr payment $93000 plus lease payment.4th payment $84,000 plus lease payment.so in 4yrs youll pay out $390,000 over 4yrs.as well as $168,000 cattle expenses in 4yrs.resale of cows 280hd $196,0000 resale 20 bulls $20,000.so your sale would be $214,000.now your cows would be 7yr to 10yr at resale.

 

[Aero]

that's an interesting way of doing math.

 

[bigbull338]

that's an interesting way of doing math.

ive been doing math like that all my life.an im seldon wrong doing it that way.when i know most of the variables i can pen it down pretty good.if i knew the lease payment i could really pin it down.

 

[plbcattle]

with it being that far from your home, you will have to hire help or you are going to lose money,calves, and some cows with out tending to them. Find something closer. If you are looking to park your money somewhere, cattle isn't it if you are that far away.

 

[KMacGinley]

What will your total yearly cow costs be?


How many months per year can you use the pasture?

You will have to have a herdsman on site.

How much will your cows cost you to purchase?

 

[firestormboergoats]

Thanks for your answers. Seems like I need to look for something closer to home, just my luck. I found a 2K acre ranch for lease for goats about 5 hours the other direction. I had to make the same decision on that one. In case anybody closer to it who has 300 head and can get in w/ out any outputs (seems like the only way to make money) and wants to make a bid on the lease, here is the link to the bid request

http://www.tpwd.state.tx.us/business/bi ... /services/

I still don't think I totally understand how to make any money with cattle, but I will keep reading and learning and one day it will be right for me to jump in.

 

[Aero]

I still don't think I totally understand how to make any money with cattle, but I will keep reading and learning and one day it will be right for me to jump in.

the easiest way is to start with a few cows and let ma nature grow your herd, stay on the moderate to low input side of operations, and figure out where your product sells the best.

of course, if you arent willing to wait for a decade or 2 to get your herd to the size you are talking about, you can take on huge loans with tons of risk and maybe come out good or bad or maybe right where you were.

it takes lots of time or lots of overhead/risk.

 

[3MR]

Doesnt Ft Hood Still have open range? Used to be if you were a member of the Cattlemans association you could range them there, about 10 years ago. You might check on that.

 

[TLCfromARK]

Plenty of pasture so feed should be minimum. At 95% weaning rate (280 cows--266 calves)

It'd have to be really good pasture for 300 acre to carry that many pairs with minimum feed to suppliment the grass.

;-)

 

[IL Rancher]

300 AU would be animal units not acres.. Looking at the listing it is 2000 acres with 300 animal units a month possible to be grazed...

 

[TLCfromARK]

300 AU would be animal units not acres.. Looking at the listing it is 2000 acres with 300 animal units a month possible to be grazed...

My bad, I just glanced at the header. Thanks
;-)

 

[firestormboergoats]

I know somebody grazes on Ft Hood, all I can find is 10 year old links and none of the locals I have talked know anything about it. I am still looking and asking for lease opportunities locally at the feed stores and morning coffee hangouts. Thanks again for everybody's help and opines.

Shawn

TLC-from what I understood from the listing it is 2 pastures at 2K acres apeice.