Counting Your Money

[Lucky]

Down to the nut cuttin…2022 profit was $90 a calf sold. Was no 16 month old $1000 a head calves. Have had several 450 to 550 pounders break $1000 this year.

About 10 yrs ago a good friend told me shoot for a grand a hd if you wanna make it. For years I thought he was crazy and wondered how anyone could afford to keep and feed calves. These days a grand a hd is a disappointment and I wonder how people can stay in business without keeping and feeding calves. We don't always hot our goal but you gotta try.

The grass is greening up and today the yearlings weren't really excited at feeding time. Can't say it wasn't a relief @ $402 a ton.

 

[Stocker Steve]

About 10 yrs ago a good friend told me shoot for a grand a hd if you wanna make it. For years I thought he was crazy and wondered how anyone could afford to keep and feed calves. These days a grand a hd is a disappointment and I wonder how people can stay in business without keeping and feeding calves.

We often feed calves too, but it takes a very good ADG to cover dry lot yardage.

I think the land business is easier.

 

[Stocker Steve]

Between our own weaned calves, and some bought (cheaply) bull calves we worked, made into steers; and put together some groups.... Son figured he had 1.80/lb in the steers.... purchase costs, value of our own at the average of what they were worth when he was making up the groups, feed, mineral, vacc, etc..... One group of 23 brought 2.54, a group of 7 brought 1.83 and a few singles brought an average of 2.10.... so yes, he made money over and beyond what he had in them. The 23 hit a homerun... BUT it was in the "buying" where he brought down the average "cost" of them.

edited... the group of 23 avgd 561 lbs so they brought in $1400....

Good work.
Would you buy or feed them differently next time to do even better?

 

[Lucky]

We often feed calves too, but it takes a very good ADG to cover dry lot yardage.

I think the land business is easier.

Everything depends on your situation, weather, and area. We can feed 500-600 pounders here 6-7 pounds a day and let them graze what little picken they can find all winter with no problem. We do hay them when it gets cold, wet, and nasty for more then few days. I probably gave a truck load of them 5 rolls this year. We get very little if any snow on a normal year.

I wish we had the funds to buy and sell land. Definitely a money maker now days.

 

[Stocker Steve]

We can feed 500-600 pounders here 6-7 pounds a day and let them graze what little picken they can find all winter with no problem. We do hay them when it gets cold, wet, and nasty for more then few days. I probably gave a truck load of them 5 rolls this year.

So you are a stocker operator. Lucky.

 

[1982vett]

But how much did you make in the land business?

Nothing.

If you want to play "What If?", land isn't moving as it once did so probably lost their.

 

[Caustic Burno]

Land doesn't make near what people think.
They just look at the purchase and sales price.
I have yet to meet someone that actually looked at the amortization schedule to see what they had in it.

 

[Lucky]

So you are a stocker operator. Lucky.

Not really. I just wean and keep my calves. We wean in late November then keep the calves through June usually. I've got a feed lane and couple pasture set up to keep them. I'd like to start buying some stockers to go with them in the next few years. I like it better than the cow/calf side.

 

[Lucky]

Land doesn't make near what people think.
They just look at the purchase and sales price.
I have yet to meet someone that actually looked at the amortization schedule to see what they had in it.

What if you buy 60 acres for $2,650 @ 5.5% on a 15 yr then sell it for $4k and acre 15 yrs later. Didn't do the math but that's probably pretty close to a break even. Does this mean you got the use of the land for free and therefore it cost you nothing? I used 60 acres to stay with our theme.

 

[greybeard]

Not really. I just wean and keep my calves. We wean in late November then keep the calves through June usually. I've got a feed lane and couple pasture set up to keep them. I'd like to start buying some stockers to go with them in the next few years. I like it better than the cow/calf side.

Lucky, I looked at the stocker thing a few years back after I heard saw our county chief appraiser urge everyone that could, and especially new people getting into cattle, to go strictly that route (no calves born on your property) instead of the usual practice of getting into cow/calf operations.
Here's the problem with it and how I explained it to her..

The calves have to come from somewhere. They don't just fall out of the sky. Where do they come from? Cow/calf producers, big and small.
IF, in the particular scenario she was proposing, everyone in the county switched to stockers, it meant all the calves would have to be bought from outside the county and the stocker producers would be competing with deep pocket order buyers.
1. That's money leaving a county of only 28,000 total people population.
2. It also means, that eventually, as that stocker practice grows (IMO anyway) that the cost of calves in that area would see an increase in price as demand grew and soon enough, stockers would want to go back to cow/calf to take advantage of it.

I think a combination of cow/calf and stockers would work where I just left from, IF you have enough forage grazing to support both.

 

[Caustic Burno]

What if you buy 60 acres for $2,650 @ 5.5% on a 15 yr then sell it for $4k and acre 15 yrs later. Didn't do the math but that's probably pretty close to a break even. Does this mean you got the use of the land for free and therefore it cost you nothing? I used 60 acres to stay with our theme.

No free land you rent land from the government.
You have to add in the taxes as well that no one ever included in their " profit"
If you're going to claim profit then you really need to add all the inputs.

 

[Lucky]

If I was making my living in the cattle business I'd definitely have stockers in my operation. We'd probably keep them at the home place or as close as possible. The example Farmerjan gave is a perfect example of how stockers would fit in and make money to live on. The we run cattle it's a once a year pay day. Stockers can be sold at anytime as unexpected things come up.

I enjoy the cow/calf side but there's just so much to worry with and try to combat. Stockers are simple, they're healthy or sick. I know it's not that's simplified but, definitely easier than cow/calf

 

[Lucky]

No free land you rent land from the government.
You have to add in the taxes as well that no one ever included in their " profit"
If you're going to claim profit then you really need to add all the inputs.

Haha. Just making sure you'd bring that up. I'd estimate my taxes on 60 acres @ $945 over a 15 yr time span. I'd be sure to figure that in. Of course we write those taxes off so it probably wouldn't be worth the time to do that math.

 

[greybeard]

I agree, it's less worry than cow/calf, but man, them baby calves make it all worthwhile most of the time.

 

[Brute 23]

What if you buy 60 acres for $2,650 @ 5.5% on a 15 yr then sell it for $4k and acre 15 yrs later. Didn't do the math but that's probably pretty close to a break even. Does this mean you got the use of the land for free and therefore it cost you nothing? I used 60 acres to stay with our theme.

It was not a break even. It was a poor return in fact compared to the stock market.

People always think they made a bunch of money off their house or land like that but they didn't. Doubling or even tripling your money in 10+ years is not that good from a math stand point. Especially with the maintenance and expences of houses and land.

 

[Caustic Burno]

It was not a break even. It was a poor return in fact compared to the stock market.

People always think they made a bunch of money off their house or land like that but they didn't. Doubling or even tripling your money in 10+ years is not that good from a math stand point. Especially with the maintenance and expences of houses and land.

Got that right Brute!
It's just like the guy waving the salebarn check about how good he did.
He has no clue what those welfare cattle cost.
There are people who appreciate the subsidized ribeye.

 

[Travlr]

Land doesn't make near what people think.
They just look at the purchase and sales price.
I have yet to meet someone that actually looked at the amortization schedule to see what they had in it.

The land deals that make big money may be outliers but that doesn't mean they don't happen. I've made more money on real estate than I've ever made with cows.

 

[greybeard]

For residential with farm property there are lots of IRS hoops to jump thru with proceeds from the sale. WHERE you put and how you SPEND the proceeds can make a lot of difference in whether you make a lot of profit from the sale or not...

 

[Lucky]

Got that right Brute!
It's just like the guy waving the salebarn check about how good he did.
He has no clue what those welfare cattle cost.
There are people who appreciate the subsidized ribeye.

CB, you always say "welfare cattle" just because you have bad luck in the cattle biz and can't turn a profit doesn't mean others have the same results. I've wanted to do a dance when I got my check and I've wanted to cry. It's all a game. You gotta play to win.

This year is shaping up to be a home run. Then again the cattle market could drop through the bottom tomorrow.

 

[Lucky]

It was not a break even. It was a poor return in fact compared to the stock market.

People always think they made a bunch of money off their house or land like that but they didn't. Doubling or even tripling your money in 10+ years is not that good from a math stand point. Especially with the maintenance and expences of houses and land.

Well Technically it was close to a break even. Could you have done better elsewhere, possibly but who knows for sure. People get rich and go broke in the stock market every day. Land is a good steady safe investment. What's the avg return of the stock market 4-5% over a 15yr period? You're barely keeping up with inflation. Plus you can't run cattle and enjoy life on stock tickets, unless of course you use the earnings which defeats the purpose. It's best to play both I'd say. Whats the rule, 40% stocks, 40% real estate, 20% savings or something like that. I'm definitely no financial genius.

This thread is fixing to go off the rails.