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Bred Cow Market has been Trumped !
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<blockquote data-quote="Stocker Steve" data-source="post: 1396835" data-attributes="member: 1715"><p>I used to work a lot on gross margin per acre - - which takes you to very different places than $ per head. Lots of variables here, but before the commodity price collapse, it was 2X the capital per acre to stock stockers in my system.</p><p></p><p>The other part was stocker gross margin per ACRE was about double that of commercial cow/calf. So average return on cattle investment was similar. IF you have stocker quality pasture (sunk cost), and you have surplus capital, then I think the trade offs were around risk and labor. I was 100% stockers when I needed more spring and summer work to keep teenagers off the street. I exited stockers for a couple years because I thought calves got too high. Hindsight says I exited one year too soon. Now I am back in.</p><p></p><p>Cattle men tend to be a bit optimistic. The area that few are willing to dig into is where will you lose the least equity when the commodity market collapses, again. A Money Ball guy would probably try to come up with risk adjusted expected values based on the phase of the cattle cycle. :shock:</p></blockquote><p></p>
[QUOTE="Stocker Steve, post: 1396835, member: 1715"] I used to work a lot on gross margin per acre - - which takes you to very different places than $ per head. Lots of variables here, but before the commodity price collapse, it was 2X the capital per acre to stock stockers in my system. The other part was stocker gross margin per ACRE was about double that of commercial cow/calf. So average return on cattle investment was similar. IF you have stocker quality pasture (sunk cost), and you have surplus capital, then I think the trade offs were around risk and labor. I was 100% stockers when I needed more spring and summer work to keep teenagers off the street. I exited stockers for a couple years because I thought calves got too high. Hindsight says I exited one year too soon. Now I am back in. Cattle men tend to be a bit optimistic. The area that few are willing to dig into is where will you lose the least equity when the commodity market collapses, again. A Money Ball guy would probably try to come up with risk adjusted expected values based on the phase of the cattle cycle. :shock: [/QUOTE]
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