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Can I make money buying a ranch
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<blockquote data-quote="Texas PaPaw" data-source="post: 1090973" data-attributes="member: 2905"><p>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.</p><p></p><p>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.</p><p></p><p>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.</p><p></p><p>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.</p><p></p><p>"The way to make a small fortune in the cattle business is to start with a much larger one."</p></blockquote><p></p>
[QUOTE="Texas PaPaw, post: 1090973, member: 2905"] 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." [/QUOTE]
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