Lets say I want to get in to the cattle ranch business. I've got nothing but cash and good credit. No experience but something I've wanted to do for a while. I'm willing to invest up to $1 million dollars and with that I need to buy whatever is needed to have a viable ranch. Can it be done with that capital investment, can I have a positive cash flow. Is it possible to make money in the cattle business? Thanks very much for your responses.
Can I make money buying a ranch
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denvermartinfarms
Well-known member
Yes it's possible if you do it right. Most will tell you it's not but it is. There is money in the cattle business , alot of people like to say there's not, but there is.
cross_7
Well-known member
I aint the sharpest tool in the shed and you don't state where you're located so it will vary
In my area your lucky to get a 10% return on your money on cattle
The prices and carrying capacity I hear others have stated it should be more, so again depends on your area
In my area your lucky to get a 10% return on your money on cattle
The prices and carrying capacity I hear others have stated it should be more, so again depends on your area
denvermartinfarms
Well-known member
Yes, it is highly dependent on your area.
jedstivers
Well-known member
If you no nothing about cattle then no. If you made a million somewhere then put that million in what you do know.
If you just really want to be in cattle and have a million you don't need to much then put it in and learn but don't expect to get it all back. If you do then its all gravy.
If you just really want to be in cattle and have a million you don't need to much then put it in and learn but don't expect to get it all back. If you do then its all gravy.
greybeard
Well-known member
I heard long ago, you aren't a Texan till you lost your butt in Oil and you aren't a Real Texan till you lost it in oil and cattle. I've worked for a lot of people that made their fortune in oil and then lost it all in cattle, then went back to oil and stayed dancin with the one what brung 'em..
piedmontese
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I always see most guys on here say you can't make $$ in cattle. Then how are you all living? No $ but I sure see a lot of new trucks and trailers every week at the sale barn.
denvermartinfarms
Well-known member
There is more to it than that, new trucks and trailers don't tell everything. But yes there is good money to be made in the cattle business. If there wasn't I would be broke.piedmontese":37veq3yy said:
WalnutCrest
Well-known member
piedmontese":cn7s0rrl said:
A friend of mine relayed a story a friend of his told him once about his dream woman ...
"She'd have long fluffy hair, a good job at the courthouse, a recently-passed father and a terminally ill mother with no idea what to do with the 1000 acres her husband left her with."
Starting with free and clear land and outside income sure allows one to weather more storms than those who have to make due with the productivity of the critters in their back yard.
Rhune
Well-known member
Check your ego at the door. Talk to ranchers in your area. Talk to people at your local coop. Talk with the local extension service. Read. Find a mentor. Volunteer on a ranch. Get some experience and knowledge before attempting to make a big decision like that.
Caustic Burno
Well-known member
Another old Texan colloquialism if you want to make a little money in cattle start out with a lot.
xbred
Well-known member
yes you can... and i have the ranch for you... buy my ranch and i will tell you how to make a million dollars on it.
Black and Good
Well-known member
denvermartinfarms":qt6oxevb said:
I thought you did excavating work also. LOL. I agree there's a little money to be made in the cattle business.1) If you don't figure your time over .50 cents an hour. 2) If you have funds enough and room enough to run 100 head. 3) There's a huge difference between being in the cattle business and depending on the cattle business. JMHO B&G :tiphat:
highgrit
Well-known member
How much are you looking to make?? You need atleast 100 brood cows, and twice the acres per cow than you think you will need. Land is cheap and interest rates are low right now. Buy the right property for the right price, you won't need to make much off the cows. Someone on here might have just what your looking for.
piedmontese
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My advice is don't buy a niche breed. Buy what sells best in your part of the country and buy from a reputable seller. That don't mean they have to be registered. I wouldn't start with heifers either. Buy bred cows that have successfully raised at least 1 calf. Don't be afraid to buy older cows as long as they aren't broke down. Sometimes you can get pretty good deals on 8+yr old cattle and get a few calves out of them and then sell them for about what you originally paid for them.
WalnutCrest
Well-known member
If you can find a long term lease, you can keep most of that money in the bank.
Split your business idea into "non-residential real estate" and "cattle" ... both need to be profitable.
Split your business idea into "non-residential real estate" and "cattle" ... both need to be profitable.
Texas PaPaw
Well-known member
Remember, good judgement comes from experience and experience comes from bad judgement. There is NO shortcut to this process!! The experience you need will have a price but no one can tell you how much that will cost. Have heard that to be come really proficient at most anything it takes about 12 years. Pretty much how long a person has to go to med school, residency,etc to become a doctor. Looking back over the last 60+ years, that has been my own personal experience. Gaining experience is not free, but is mandatory. The critical part is what will it cost. There is a very steep and (how) expensive learning curve and don't think hiring an experienced "manager" will be the answer. The small size operation you are talking about will not support a hired "manager" of any quality.
If you figure $15,000 per cow unit for land, cows, equip, etc then a million is only enough for 66.67 cows. Not sure an inexperienced person can do it for that when you allow for the tuition expense that inexperience will bring. Leasing most of your land will be a plus economically.
With 66 cows, if you figure weaning/selling an 85% calf crop (about the national average) you will have about 56 calves to sell each year. At a $1000 per calf, you would have a gross income of $56,000 before operating expenses. Read somewhere, that the national average expense per cow is about $500 so subtract $33,000 expense (have to feed the cows that don't wean a calf also) and that leaves a net income of $23,000. What I have mentioned is a best case scenario without rookie mistakes. After 12 years of gaining (how expensive $) experience with much lower (possibly negative)income is $23,000 per year return on a million dollar investment acceptable. There are cattle avenues other than cow/calf that can be more profitable but IMO they require even more experience and management skills.
The short answer to your question is yes it is possible to make money with a ranch and have positive cash flow but it is very unlikely during the "learning" years.
"The way to make a small fortune in the cattle business is to start with a much larger one."
If you figure $15,000 per cow unit for land, cows, equip, etc then a million is only enough for 66.67 cows. Not sure an inexperienced person can do it for that when you allow for the tuition expense that inexperience will bring. Leasing most of your land will be a plus economically.
With 66 cows, if you figure weaning/selling an 85% calf crop (about the national average) you will have about 56 calves to sell each year. At a $1000 per calf, you would have a gross income of $56,000 before operating expenses. Read somewhere, that the national average expense per cow is about $500 so subtract $33,000 expense (have to feed the cows that don't wean a calf also) and that leaves a net income of $23,000. What I have mentioned is a best case scenario without rookie mistakes. After 12 years of gaining (how expensive $) experience with much lower (possibly negative)income is $23,000 per year return on a million dollar investment acceptable. There are cattle avenues other than cow/calf that can be more profitable but IMO they require even more experience and management skills.
The short answer to your question is yes it is possible to make money with a ranch and have positive cash flow but it is very unlikely during the "learning" years.
"The way to make a small fortune in the cattle business is to start with a much larger one."
Ya... if the drill an O&G well and you have the minerals.
bird dog
Well-known member
If you buy a nice piece of real estate and consider the return on it as part of the income. then yes you can make a little money. Good farm land is a great hedge against inflation. If you are smart enough to have a million from something other than a inheritance you probably have other investments. If you do, don't sell them. What I would recommend is using most of the money for land and then leasing it to an experienced operator so you can learn the day to day things you need to do. After 3 or 4 years you will be ready to make your own mistakes as that is really the only way to learn.
