Cattle Expenses

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aplusmnt

aplusmnt

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Southeast Kansas
When figuring your profits from Cattle operation what are some of the least obvious expenses that should be factored in as expenses.

The obvious ones are Feed and Vet Bills.

Do you figure your property tax on Home and land against the cattle?

Do you figure electricty bills? Water bills?
 
Take absolutely everything you spend, in addition to what you have listed, including miles to the feedstore, tires on the stock trailer, fertilizer expense, fence, and even phone calls. Add it all together. Divide it by the number of head. That is what they cost.

My truck and my base phone bill would be there without the cows. They are figured into other expenses. (I don't need a 1 ton for cattle) I only calculate expenses directly related to the cows themselves. If I were a full time cattleman, that would be different.

Hay profits negate fertilizer expense putting me in the black. It is all related to grass farming on the bottom line (farming). But I figure the cows differently (break it down) for my own knowledge to know where I am at.
 
Absolutely anything that was a cost incurred by having those animals. Property taxes, a percentage of power, phone bills, fuel in the truck to get supplies (and anything else cattle related), well and water costs, equipment repairs, land payments (if any).

Rod
 
DiamondSCattleCo":xm7v6j52 said:
Absolutely anything that was a cost incurred by having those animals. Property taxes, a percentage of power, phone bills, fuel in the truck to get supplies (and anything else cattle related), well and water costs, equipment repairs, land payments (if any).

Rod
Click to expand...
yes the cattle pay for taxes ins feed fuel an all other expenes incurred along with household.an if an when they dont do that you have money coming from other sources to cover it.
 
Other more obscure costs that I figure in:

- Specialized clothing (if I didn't have cattle, I wouldn't own steel towed work boots, or lined coveralls). Any expenses my wife incurs by repairing said clothing.

- Food costs for any hired hands that we may have throughout the year.

- Percentage of personal vehicles. Occasionally, the wife needs to use her car to run into town to pick up supplies. This is tracked and charged back to the cattle.

Some of this stuff is nitpicking, and doesn't add up to a whole bunch, but if you want to make money, you need to know the whole picture.

Rod
 
Get yourself a schedule F and have a look at it, alot of things fall under the areas of deductions. Insurance, farm & vehicle, power and water, taxes, personal protective equipment(clothes) postage, paper, printer ink, 1/2 of the cost of meals for entertaining customers, advertizing (that burger or steak that you gave away) depreciation on the facilities, equipment and breeding stock, seeds and fertilizer, gas, oil, grease, tools and hardware, wire, screws and nails, paint, vet and meds, all your feed, minerals.
Save every receipt that you get and mark on it what it was for...and keep up your books weekly at least.
Basically everything that you use in the operation is deductable.
And thats my two bits worth
DMc
 
Any expense for a animal gets charged as the others have mentioned. I go one step futher. I have a lot of turnover. I use a program to track how many days an animal has been here during the year. I track to days insted of years. It aint as hard as it sounds. The program I wrote does all the math. I just enter in all the expenses and it charges to the correct place. I get a general Idea how much each one cost on a daily basis but the numbers are not exactly right until years end. For instance I sell 75 in January. They are not charged for fertilizer or other expenses except the time they were actually there. In the beginning of the year it shows up more but by years end more animals with more "cow days" are factored in which lowers the cost for the ones sold in the early part of the year. I'm a stickler about knowing exactly how much each makes me. By doing it this way I can tell exactly how much each animal made me per day and adjust things to get the most profit I can out of each one. O.K. yea I'll admit it, I'm a nerd.
 
The IRS has a pamphlet on filing Farm taxes and explaining all the qualified deductions. Its very informative and comes up with some stuff you might not have thought of. You can order it through their site, or if your county agent is as on the ball as ours is he will just come up and hand you one. :lol:
 
I could be wrong, as I have to have an accountant do my taxes, but if you have an "outside" job, a LOT of things can't be deducted. LIke cell phone... fuel, etc.
 
TheBullLady":1kqbpv98 said:
I could be wrong, as I have to have an accountant do my taxes, but if you have an "outside" job, a LOT of things can't be deducted. Like cell phone... fuel, etc.
Click to expand...

It will get interesting for me, because I already deduct many of these things off my Cleaning business. Will probably keep most of it over there because I will need the deductions more.

I might show on paper more of a profit or should I saw less of a loss on the cow end but in reality I will be showing less of a profit on the cleaning in. Not sure how it will all wash out in the end, but that is why we have CPA's huh?

More or less I will need two sets of books one for taxes and one to see if I am really making money on the cows.
 
Keep up with the milage used in each case. Then you can figure how much to count where. You can also count cell phones etc.. by percentages.
 
What sort of software are you guys using for your cattle business?

I've seen Quickbooks mentioned several times.

What sort of tracking software are you using for the animals?



edit: I did a search for software on the boards and got lots of info. Didn't realize how often this topic comes up hehe.....we're turning into a bunch of computer geeks it seems :oops:
 
We use a CPA Firm for our taxes. Every year they send us a "Worksheet" (about 40 pages) onto which we put the tax year's total figures for each expense category that we use. This worksheet also contains an ongoing Asset Depreciation record which list every animal and non-animal asset we depreciate. However, this IRS set of expense "accounts" doesn't give us the detail we need for "management".

I'm a data person but I stopped trying to record every expense item for each animal individually due to time factors. Yet, it could be reconstructed.

For a more practical and useful "summary" I track Hay, Feed, Cubes, Minerals, Water, Rainfall amounts on a monthly basis for our entire herd. Then, I arrive at a monthly average "operating cost" for each Animal Unit (we periodically weigh our animals). I also plan to chart how much each cow and each bull has produced in offspring dollars sold.

If I was a little more compulsive, or had money to hire a data entry person, or a little more bored, I would do a lot of statistical things, including Chi Square Analysis, Analysis of Variance, and Regression Analysis... ;-)

I will say that there does seem to be a relationship between the protein quality of hay we feed and the amount of 20% range cubes we feed... no surprise here!

If a producer factors in all operating expenses PLUS all overhead expenses PLUS depreciation...well, that can get a little depressing... Have to write a lot of these other "costs" to a lifestyle in the country... :D
 

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