If you had a 60 cow herd and sold 60 calves for $60,000 but had $30,000 in running cost, a $12,000 annual land payment, and a $18,000 annual payment on them did you make any money? If so how much, if not why?
Counting Your Money
- Thread starter Lucky
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callmefence
Keyboard cowboy
Maybe
callmefence
Keyboard cowboy
How much did you pay yourself. You own the land? If so are you charging the cows for all of it.
That 30000 in running cost. What did you buy with that 30000 that you still have.
That 30000 in running cost. What did you buy with that 30000 that you still have.
Little Joe
Well-known member
The way I see it, you made money that you then turned around and used to pay for assets. Once the assets are paid for, then you will actually be able to receive an income from them. Also, your net worth will be more because of the said assets being paid off.
J+ Cattle
Well-known member
The simple answer is that you covered your costs and broke even, but it's never that simple.
You need to consider any increase in the value of the land and the value of the cows given that they are now a year older.
You need to consider any increase in the value of the land and the value of the cows given that they are now a year older.
Lucky_P
Well-known member
Was at a meeting recently. University economist showed a breakout of costs... including pasture rent (not mortgage on property)... most producers were losing anywhere from $160-$200/cow/yr.
I'm still not regretting dispersing our herd in 2019.
I'm still not regretting dispersing our herd in 2019.
greybeard
Well-known member
I am. Not everything in life is about money.
How much were the 60 cows, and how old when you bought them? $1500 each? So $90k in cows? At $18k a year, they will be paid off 5 years. How much did the land cost, when did you buy it, what is it worth now, and how long at $12k a year til it is paid off? Looks to me like the $3ok profit is used to pay down the $30k a year land and cow payments, transferring that $30k in cash to assets.
greybeard
Well-known member
annual property taxes?
BFE
Well-known member
If cows can pay for the land you're doing good. It's the best long term investment in the history of mankind.
Dave
Well-known member
I didn't disperse, I got bigger. I was 66 and the wife 65 when we bought this ranch. People asked why at our age we were buying this place. It is not about money. It is living the life that you want. But we have made money every year. Money is made in the buying and selling more so than the raising. That and not being locked into one program. Being flexible.
BFE
Well-known member
Here's where I'm at. I have a few head of registered cows I really like and some commercial cows as well. I plan on culling down to where I have to feed very little hay and keep the registered stock. Sell some breeding stock from them hopefully. Buy a few one and dones to utilize extra grass at the bigger pastures.
I have some smaller places where I run stockers. Im trying to diversify and keep costs low. Stay more flexible. It seems hard to build a good cow herd fast on a limited budget.
Dave
Well-known member
Agreed. Especially as you said above, in buying and selling. And I learned a long time ago with horses, you make your money when you buy them. Some people won't get what that means. I have made money when cows were cheap, and made money when they were scarce and high. I am just NOT going to buy a cow, or a horse, for more than 50% of what I think I can sell it for. and you can always find them, if you know what to look for and were to look for it.
Ouachita
Well-known member
The answer will be different for everyone.
Whether I choose to have cattle, or not;
I would still own and choose to own my acreage.
I would still have and maintain a fence, albeit less nice and cheaper.
I would still pay my property taxes.
I would still have built every pond and stocked them with fish.
I would still maintain my land for aesthetics, including forage for wildlife, whether I personally hunted or not.
I still would have made this place pleasing to the eye anyway; wife and I, and my kids and grandkids have been and will continue to be the beneficiaries of this endeavor, whether or not they inherit a damn thing.
This place is my heaven on earth. Cattle are a bonus on every level. I save a heck of lot more than I make on them.
Whether I choose to have cattle, or not;
I would still own and choose to own my acreage.
I would still have and maintain a fence, albeit less nice and cheaper.
I would still pay my property taxes.
I would still have built every pond and stocked them with fish.
I would still maintain my land for aesthetics, including forage for wildlife, whether I personally hunted or not.
I still would have made this place pleasing to the eye anyway; wife and I, and my kids and grandkids have been and will continue to be the beneficiaries of this endeavor, whether or not they inherit a damn thing.
This place is my heaven on earth. Cattle are a bonus on every level. I save a heck of lot more than I make on them.
Especially if you have a lease such as oil, natural gas, windmills, etc. Royalties are nice but additional property taxes are huge and painful.
Travlr
Well-known member
I don't know about 50%, because some deals are so easy that 10% or less is good money. But yeah, you make your money when you buy if you're doing it right.
Same with real estate or any other investment. That's why I don't buy diamonds...
Lucky
Well-known member
All good answers.
It's always interesting to me how people look at things differently. I'd say I made $30,000k that year. Tax man would say I lost money that year, I'd consider the tax savings on the losses extra income on top of the 30k.
It's always interesting to me how people look at things differently. I'd say I made $30,000k that year. Tax man would say I lost money that year, I'd consider the tax savings on the losses extra income on top of the 30k.
Caustic Burno
Well-known member
Assets are worthless until you sell them, nothing but a liability to upkeep .
Lots of people land rich can't rub two nickels together.
When it comes to tax savings your saving pennies on dollars spent.
