Counting Your Money

[Brute 23]

Lots of scrambling for justification going on here.

Your land operation is doing great. You suckered a cattle guy in to a very expensive lease.

Your cattle operation is taking a beating because you are paying way to much for a lease that only holds 60 head.

I know people will argue it goes and comes from the same place but separate the two operations and run them like a real business. Then at least you can be honest about where the money is going.

 

[Caustic Burno]

Always got all the answers. Just like every other smart son of a gun I ever known.

Fact remains it cash flows with payments and really works good when it's paid at the bank.

No those are just facts.
You're like those fellows that always win at the casino.

 

[RNW]

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?

hope you didnt get into cattle for money...by the way, i wish i had 60 calves bringing 60,000.00......i may need to move, ..where do you live?

 

[BFE]

No those are just facts.
You're like those fellows that always win at the casino.

Really? Never seen you wrong yet. Must be nice.

 

[farmerjan]

You don't own that land either, that's an illusion.
If you think you really own it stop paying the property tax.
You rent that asset.

I get the "not owning it if you don't pay the taxes" thing... but you can always sell it and that is money you can recoup..... which you cannot do if you only rent it... And as long as you pay the taxes, you can pretty much do what you want (yes within whatever restrictions you have) but it is not like a landlord telling you that you cannot have chickens or a garden or shoot the deer in the back yard eating the garden he doesn't want you to have.... so there are still more benefits to "owning" the land....

 

[Lucky]

hope you didnt get into cattle for money...by the way, i wish i had 60 calves bringing 60,000.00......i may need to move, ..where do you live?

I live in NE Texas. The 60 calves bring a grand each was just a scenario. It's pretty easy to make calves bring a $1,000 though. Not sure if they make any more money than having them bring $750, you'd have to do your own math on that.

 

[farmerjan]

We sold 27 steers... wt from 412 to 655... 3 @ 655 brought 1.85 and that was over 1200 each... 10 @ 500 brought 1.87 I think so over 925 each... 10 @412 brought 2.03 so over 800 each. Couple other odd ones. Check was over 20,000 after commission... so a grand apiece is not too far off right now.

We were moving a bunch out that we had weaned and some were off cows that didn't calve until Nov or so... some off first calf heifers. Weaned 45+ days... many of the cows bred back faster so will hopefully have Sept/Oct calves mostly this fall....

 

[BFE]

I get the "not owning it if you don't pay the taxes" thing... but you can always sell it and that is money you can recoup..... which you cannot do if you only rent it... And as long as you pay the taxes, you can pretty much do what you want (yes within whatever restrictions you have) but it is not like a landlord telling you that you cannot have chickens or a garden or shoot the deer in the back yard eating the garden he doesn't want you to have.... so there are still more benefits to "owning" the land.

Hmm makes sense.

 

[BFE]

We sold 27 steers... wt from 412 to 655... 3 @ 655 brought 1.85 and that was over 1200 each... 10 @ 500 brought 1.87 I think so over 925 each... 10 @412 brought 2.03 so over 800 each. Couple other odd ones. Check was over 20,000 after commission... so a grand apiece is not too far off right now.

We were moving a bunch out that we had weaned and some were off cows that didn't calve until Nov or so... some off first calf heifers. Weaned 45+ days... many of the cows bred back faster so will hopefully have Sept/Oct calves mostly this fall....

Pretty good prices I would think especially considering how far east you are.

I appreciate your input. It's always very well thought out and fact based. Thank you for making beneficial contributions to the forums.

 

[farmerjan]

@BFE ...... Thank you very much for the compliment. Sometimes I am too "literal" and sometimes I "don't get it" , but we (my son and I), work hard and I try to help others and both learn from others experience and my own "school of hard knocks life".. If I can help someone along the way... so they don't try to reinvent the wheel but can learn from my screw up... I feel like I have done a good thing. We did not inherit or have any family that we got land or anything from. In fact, most think I am nuts to have wanted to have a farm/dairy... except my grandmother years ago that said I was a "Throwback to Granny".... there is some farming in my background... but I just always felt like I was out of place in a semi-rural but non-farming area... I was raised to be proud of being a new england Yankee with the very conservative, practical upbringing... but when they went to the insanity of "faster lifestyles, higher taxes, and farms were only for the "bucolic pictures"... I got out and came south to a lifestyle of slower and more gracious. I am very simple in alot of ways... and appreciate that I have been blessed to have some of what I craved from a kid... a farming homesteader type of life.
You comment/compliment means alot to me.

 

[Caustic Burno]

Really? Never seen you wrong yet. Must be nice.

Isn't hard with people who live in air castles. Build yourself a big one it cost the same as a little one.

 

[Caustic Burno]

I live in NE Texas. The 60 calves bring a grand each was just a scenario. It's pretty easy to make calves bring a $1,000 though. Not sure if they make any more money than having them bring $750, you'd have to do your own math on that.

It's not about what they bring it's about the inputs in them.

 

[angus9259]

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?

If you had 60 cows and sold 60 calves (all your cows actually calved a live calf that made it to selling age) and you got $1000 each for those calves, I would say you should keep doing whatever you're doing because God has obviously ordained you to be doing it.

 

[BFE]

You don't own that land either, that's an illusion.
If you think you really own it stop paying the property tax.
You rent that asset.

I assume me thinking I own the land is my air castle as you put it. By your assessment then we really don't own anything on this earth which in the big picture is a fair statement. Heck we don't even own our own bodies, we're just using them until we move on to the next plane of existence.

So yes you're right. But by your reasoning why do you even bother with anything at all? It can all be gone at any time anyway.

 

[BFE]

Isn't that the case with anything, not worth anything until you cash it out. To me just having cash lying around doing nothing is worthless. I don't know anyone who got wealthy just holding onto all their cash, they had to invest it in something that then goes up in value . Land is a great investment, it's not like they can make more of it and flood the market.

Actually that land makes money every year you don't have to cash it out but yes you are correct it's a great investment. I'll keep buying land as I can. No matter whether I work it or rent it out it's generating income. I hope to have 250-300 acres bought and paid for by the time I hit retirement age. At todays rates around here even with a $150 cash rent and possibly higher that's a pretty good income.

 

[Ebenezer]

No matter what you do, the taxes are going to be there. Put your money in fruit jars to avoid taxes, bury it and it looses value with no investment. Taxes are not going away just because you do not own land. If anyone is serious about not paying taxes then they will not own cars, trucks, home, land and who knows where they'll buy what they need.

 

[Lucky]

It's not about what they bring it's about the inputs in them.

Yep. That's what I said.

 

[Lucky]

If you had 60 cows and sold 60 calves (all your cows actually calved a live calf that made it to selling age) and you got $1000 each for those calves, I would say you should keep doing whatever you're doing because God has obviously ordained you to be doing it.

It was just a simple scenario. Trust me I'm not that lucky. My biggest concern is open cows every year. Most people constantly worry about feed bills, I worry about open cows costing me money every year.

 

[Dave]

hope you didnt get into cattle for money...by the way, i wish i had 60 calves bringing 60,000.00......i may need to move, ..where do you live?

My neighbor sold 2 pot loads of steers weighing 550 for $2.31. That is $1,270. A load of heifers weighing 510 for $2.005. That is $1,022. Pretty easy to get $1,000 or more out of a calf right now.

 

[dave_shelby]

I bought into my farm mid life. I wanted a rural lifestyle, liked agriculture and looked at the delta between buying a house with 10 - 20 acres and something 80+, eg price per acre goes up with smaller tracts. My hope was that cattle would carry the additional mortgage load. I'm getting there but also know that working additional projects and contracts on my day job makes much more and I'd like to get the mortgage paid off early. So my kids pick up that slack.

Like Ouatchita and Ebenezer stated its about keeping cost down. I buy hay (couldn't make it with the demands of my day job) and rent equipment or have it done custom. We do rotational grazing so 95% of work is done with fence reels, pig tail posts, mobile water line and troughs and a four wheeler. We've spent about 12k in fence and the water system was paid for by uncle sam. I do have a Ford 8240 and a bush hog and bale spear. This works well but my kids would like to farm like their neighbors. But I I try to keep focused on profitability and that means low inputs - 2 months of hay and mineral and some abx for pink eye. So that might be the better lesson for them.