Beginning rancher update - Long

[bullred]

I've gotten plenty of great advice so far off this board, so I wanted to say thanks to everyone, and give a little update on the progress of my reentry into the cattle business. As I've mentioned before I was raised around cattle until I graduated high school and left home for college. The only business lessons I picked up on however, dealt with the "sweat equity" I contributed everyday. My dad subscribed to the philosophy that "there's dang few problems that can't be solved with enough want-to and hard work." As a result, myself, and my two brothers were no stranger to the discount labor market. However, at the time I didn't realize the true value of the lessons he was imparting on me. I've enjoyed a successful career in the oil industry, and until recently, never thought I'd miss those days on the ranch.

Now I've got to small kids of my own, and can't help but remember another of my dad's sayings, "It's hard to raise good kids if you plant 'em on concrete." So the combination of nostalgia, the need for some tax relief, and most importantly the desire to have my children learn the same lessons I did has led me to get back into the business.

So, I purchased a place, on the foolish assumption that it would be the "big expenditure". Boy was I mistaken! Since then things have gone like this:

Well you gotta have a tractor, and don't make the mistake of buying one that's not going to be big enough to get the job done. So, $37,000 later I'm a proud new tractor owner, front end loader, bale spear, pallet forks, box blade, and brush hog.

Have to have a way to transport that tractor from point "A" to point "B" – new trailer $3000.

Load the tractor on the trailer and realize that a 9,000 lb. tractor on a 12k lb. capacity trailer, behind a half-ton pick up is not a very good combination. Getting from point "A" to "B" was pretty hairy!! But Ford's got some really good pricing, and hey those things sure look good. Bam! New crew cab, 4x4, F350, diesel, and for only $37k. What a coincidence, same price as the tractor!

Now I can get that $6k gooseneck, and the $5k stock trailer. Thank goodness!

Let's get the barn and pens built - no problem. Barn builders should be here in about 4 weeks (must be a lot of barn building going on) and will leave me a nice new pole barn for only $15k. Man, I'm getting plenty of those tax write-offs huh?

Note from the power company – "Since you're not building a home right now running electricity to your place will cost $6k". Well come on! After all, I gotta have lights!

Can't raise cows without water. New well - $5k.

Note from wife – "Honey, it sure would be nice to have one of those utility vehicles to ride around the place on." Luckily John Deere makes those nifty little gators – a steal for $10k.

So now I'm about $125k lighter, plus the cost of the land, and haven't bought the first cow yet. I figure with 40 cows I should be break-even in about 50 years. But the other day my 5-year old son said, "Dad, let's go to the ranch." Heck, it's worth every penny!! More to come later.

CJ

 

[SF]

Another way to look at it.

Needed transportation anyway and with all that money you make the pickup was cheaper than the mercedes or lexus anyway. So you probably saved at least 30k on that purchase. Therefore the tractor was nearly free. Only cost you 7k. The gator at 10k, well now we don't have to worry about summer camp and those other expensive excursions. Just send um out. Heck they might even build some fence, so you're saving money again. The well at 5k, well gonna build a house some day, will need it for the house. The electricity would have been 3500 to 5000 even with building a house, so wouldn't make much difference there. The power companies around here give a 1500 to 3500 credit for a house, depending upon the power company. The trailer to haul the tractor on and the stock trailer. Well, now you're in the cattle business for only 18k. Course you don't have any cattle yet, no chutes, working pens, etc... You're right, another 50 years and maybe they can earn this investment back. LOL
:lol:
It sure adds up quick
Congrats on the new place. Just having some fun here.

 

[dun]

And that's the reason why "get the infrastructure in place before buying the cattle" is stressed by most of the folks that have been there.

dun

 

[flaboy]

Yep isn't it fun bullred? 10K for a Gator, heck I could have went down to the swamp and caught you one and sent it along to you. How many feet long do you need? Oh, you're talking about one of those 4 wheel gators? Yeah, I looked at those things and bought a farm Jeep. I paid $3K for the Jeep and it will turn on a dime and give me 9 cents change. Carries everything a gator would. Keeps me warm in the winter too.

Anyway, good luck and enjoy your place.

 

[Bama]

My dad subscribed to the philosophy that "there's dang few problems that can't be solved with enough want-to and hard work."

"It's hard to raise good kids if you plant 'em on concreteCJ

I'd say your dad was a smart man. This would be a much better country if more dads thought as yours did.

 

[Brandonm2]

The only thing I would have done differently is $37,000 for the new ton truck. The big 200++ cow ranchers need new ton trucks; but for the rest of us a $4000 to $10000 used ton will generally do everything we will ever do. I like to take my truck out in the field to pick up hay, load cows, work on broke down tractors, drop off posts, wire rolls, salt blocks, feed, hay, etc and when you do stuff like that you collect dents and dings. I don't care if I scratch up a $6,000 truck; but I would be bawling if I even scratched a $37,000 truck. I like to drive around town in a new lite truck and haul with an old heavy truck. I know you will not have the repair bills that I periodically collect on my 1987 F350 diesel(it is on it's second transmission); but I don't haul my tractors or my dozer more than 5 or 6 times a year and we usually aren't going more than 82 miles at a time. Add a few loads of cows, T-posts, hay, assorted other equipment and I don't drive more than 6,000 miles a year in the ton (though we are usually loaded to the gills). You will probably never make your money back on the 40 cows; but you will have a lot better, healthier, hardworking kids out of this and you should have a lot of fun along the way.

 

[TRIPLEDFARMS1]

thats all part of being in the cattle business.cost with out much retrun.

 

[bullred]

Brandon,

I seriously considered buying a used one-ton flatbed truck, or something similar. If I was living on the place I probably would have, because my F-150 was a low milage '01 model. The reason I didn't is because, living in town I don't have the driveway space for a third vehicle. The F-150 was paid for and I sold it to an individual and came out pretty good on the deal. One thing I learned that I didn't know, If you have a trade-in when you buy a new vehicle you pay a lot less sales tax. As it was, without the trade, I got hit pretty hard on sales tax. But as of 2004 in Texas (and other states without a state income tax) sales tax is deductable. Also, if you purchase a business vehicle with a GVWR of 6,000 lbs or greater you can expense the full cost of it, up to $105,000. In past years you could only expense up to $25,000.

Rereading over my post, I need to clarify something. I don't want anyone to think I'm a rich city-slicker looking for something to do with all my money. That is certainly not the case. Although, I've been fortunate in life, I started out as a roughneck on drilling rig, and have busted my a** to get where I am now. I didn't have an extra couple of hundred thousand dollars just laying around with nothing to do with it. I've taken on a heck of a lot of debt in this venture. The point I'm trying to make is that looking at it from a dollars and cents standpoint I've probably not made the wisest of decisions. But the intangibles far outweigh the financial indescretions. I think a man's legacy is measured by the influence he has on those he leaves behind, not the size of his portfolio.

CJ

 

[flaboy]

And don't forget bullred. You can't take it with you although I going to try. :lol:

 

[Crowderfarms]

The only thing I would have done differently is $37,000 for the new ton truck. The big 200++ cow ranchers need new ton trucks; but for the rest of us a $4000 to $10000 used ton will generally do everything we will ever do. I like to take my truck out in the field to pick up hay, load cows, work on broke down tractors, drop off posts, wire rolls, salt blocks, feed, hay, etc and when you do stuff like that you collect dents and dings. I don't care if I scratch up a $6,000 truck; but I would be bawling if I even scratched a $37,000 truck. I like to drive around town in a new lite truck and haul with an old heavy truck. I know you will not have the repair bills that I periodically collect on my 1987 F350 diesel(it is on it's second transmission); but I don't haul my tractors or my dozer more than 5 or 6 times a year and we usually aren't going more than 82 miles at a time. Add a few loads of cows, T-posts, hay, assorted other equipment and I don't drive more than 6,000 miles a year in the ton (though we are usually loaded to the gills). You will probably never make your money back on the 40 cows; but you will have a lot better, healthier, hardworking kids out of this and you should have a lot of fun along the way.

Good, well said response.

 

[Rustler9]

Hey Bullred, sounds like you're getting there. You gotta love it. You're doing the best thing for your kids-I was raised the same way you were, my parents kept my a** in the fields and barns from dawn to dusk and I thought it would kill me. Guess what-it taught me to work my butt off and that it's a good thing. I'm still doing it and can't think of anything I'd rather do. I truly believe that if everyone's kids were raised this way there would be alot less crime. Keep us posted on how the farming goes.

 

[SF]

...I think a man's legacy is measured by the influence he has on those he leaves behind, not the size of his portfolio...CJ

Well said

 

[Tod Dague]

And don't forget bullred. You can't take it with you although I going to try. :lol:

An old man was very tight all of his life and was worth a lot of money. He always told his wife to bury his half of the money with him when he died. Upon his death his wife wrote him a check and placed it in his coffin.

 

[HatCreekFan]

Talking about the influence of farming/hard work on kids:

My favorite kids (yes, teachers have 'em) are the kids that have grown up on farms, because they know the value of hard work, and will get their school work done, too, usually in class 'cause they know they sure don't have time at home to do it!

 

[Brandonm2]

I seriously considered buying a used one-ton flatbed truck, or something similar. If I was living on the place I probably would have, because my F-150 was a low milage '01 model. The reason I didn't is because, living in town I don't have the driveway space for a third vehicle.

Sorry having grown up with lots of space, I am used to taking parking space for granted. I have 5 pickups still around here (4 far above 100,000 miles) and 5 tractors (2000s, 1980s, 1970s, 1950s,...going back to a 1940s CASE SC). Of course you could have parked an old ton in the new barn next to that expensive tractor. The thieves will pass on a truck that won't bring over $3000 at auction and take off the trailers first anyway since they will auction at ~60% of their new value and are much more difficult to trace.

I didn't have an extra couple of hundred thousand dollars just laying around with nothing to do with it. I've taken on a heck of a lot of debt in this venture. The point I'm trying to make is that looking at it from a dollars and cents standpoint I've probably not made the wisest of decisions. But the intangibles far outweigh the financial indescretions. I think a man's legacy is measured by the influence he has on those he leaves behind, not the size of his portfolio.

While I agree with your decision and your rationale behind the decision; don't underestimate the possible longterm financial upside to your decision. My grandfather was a Marine from December 8, 1941 thru the occupation of Japan. He got out, returned to his job as a telephone lineman for South Central Bell and immediately invested all his back military pay and a GI bill loan into a 141 acre place that came with a screwy looking handful of x-bred cows. All the old farmers told him that he overpaid. Well the nation's population has grown from 120 million to 295 million and we have made back 300++ times his original investment, still own 30 acres of that (now pricy) orginal tract and own 3++ times as much land as his original tract. If we had been a little more aggressive and bought land which we were leasing and a little more business saavy we would be multi-millionaires. Granted our property was helped by the insterstate system and the 60s race riots in Birmingham that spurred the growth of the suburbs; but your kids will live to see the U.S. blow past 350 million people (easily). Land especially productive land is only going to become more and more valuable as U.S. and world population continues to soar.
[/quote]

 

[CopeMan]

Rereading over my post, I need to clarify something. I don't want anyone to think I'm a rich city-slicker looking for something to do with all my money. That is certainly not the case. Although, I've been fortunate in life, I started out as a roughneck on drilling rig, and have busted my a** to get where I am now. I didn't have an extra couple of hundred thousand dollars just laying around with nothing to do with it. I've taken on a heck of a lot of debt in this venture. The point I'm trying to make is that looking at it from a dollars and cents standpoint I've probably not made the wisest of decisions. But the intangibles far outweigh the financial indescretions. I think a man's legacy is measured by the influence he has on those he leaves behind, not the size of his portfolio.

CJ

I was begining to wonder!! I admire that you have worked hard to get where you are and are able to buy all this stuff and start your ranch. So on those 40 cows what are you planning on getting?

 

[bullred]

CopeMan,

Thanks for the compliment. Regarding the type of cows I'm almost certain I'm going with F1 tigerstripes. As I've posted on a previous thread, I've sort of backed into this deal. My intention was to breed the tigerstripes to a black angus bull. Black calves, with some ear seem to be what sells the best around here. Well, my father-in-law had a registered Clark Angus Ranch bull with great genetics, that fathered a good looking bull calf out of a nice angus cow he has. He made me a deal on the bull calf that I couldn't turn down. So now I've gotten what has the potential to be a great herd sire, but the catch is he's only 5 months old.

I kicked around the idea of picking up some 4-5 weight calves and feeding them out for a few months then selling them and getting the bred cows, but, based on a large part to the advice I've gotten on this site, I've passed on that idea. I'll just go ahead and pick up some either young heifers, or bred cows and either rent or borrow a bull until mine is ready to go.

 

[Ryder]

Sounds like a good plan. Wish you luck with it.

 

[oljim]

Sounds like you've been doing lots of planning and figurin',,,CopeMan - and you're going in with your eyes wide open! I bet you're gonna do fine,,

In terms of overall ranch operational expenses, the outright ownership and maintenance of equipment is a killer! Bout the only thing good about it,,is the depreciation expense - and my pappy told me that it ain't never smart to spend money just to save on taxes.

Now,,,i've ridden my share of many a tractor and heavy equipment in my days,,and i shore ain't one to say it dont' feel good to ride atop a good piece of strong, well-runnin' piece of equipment. But, for my place anyways,,that luxury has long passed!,,,lol,,,

Me and my family have been heading toward an equipment-free ranch (uh,,almost NO equipment needed for general operations) for quite a few years now - and we're bout there.

Hopefully,,if we work hard enuff at it,,we'll be able to get along with no equipment at all,,one of these days!! We're sure gonna try,,,cuz, IMHO,,all the rising costs of equipment and gas and oil and diesel and maintenance (as compared to what a piece of ag land will ordinarily bring in) - shore ain't sustainable!!,,yikes!,,lol,,,

 

[CopeMan]

What do you mean euipment free? Are you going back to using work horses?