Expanding

[poorfarmer]

I've wanted to expand and farm full time but just haven't found the pasture to rent. It's looking like I'm going to get several opportunities this year which could result in running my numbers up to around 100 pairs. So my question revolves around how to pay for the additional cows.

Buying cows may reduce your income due to interest and principal payments. So, you need to set an income goal first, and then have some one help you do stock flow and cash flow plans. I am not sure that 100 pairs is even close to a living. You need your own numbers. A bank would be happy to talk to you if the numbers look good.

I have seen a few folks quit their day job and go full time on cattle. Most get things paid off first -- and then either send the wife to town for benefits or sell higher value (breeding or grass fed or back grounded) stock. I am working on higher value.

Look at the graphs in Harlan' article in the last issue of Beef magazine. The guy used as an example has 250 cows and is breaking even... :help: Next month his operation gets a make over.

I was thinking the same thing. Make sure the money coming in off of 100 pairs will be enough to support you, for me that wouldn't be the case. I know it depends on how you market and the standard of living you would be trying to maintain, but farming cattle is a lot more enjoyable when it is not the only source of income IMO.

 

[No Rest Farm]

You are correct, I don't think 100 cows would provide a living every year. My end goal would probably be 200-300 cows or some kind of combination of cow calf and finishing beef to sell locally.
My wife is a wedding photographer and does fairly well at it. Another idea we have floated is actually doing a rustic wedding venue on the farm at some point. I'm also thinking of getting the orchard going again and using that as a source of income as well.
We live a pretty simple life and really don't need a lot of income. If it wasn't for my house payment I could probably live on $20,000 a year. We grow our own beef and a big garden. We trade beef with neighbors for other things. The end goal is a simple way of life much more than making a lot of money. If I can sit on the front porch with a cigar and a beverage I'm completely happy.
As far as the land I think my in laws want to sell me their land a bit at a time so they have the money to enjoy retirement. That suits me well, it keeps me from having a lot of payments. I've owed them money before and it's all done out right on paper. Never had an issue and we get along really well. I have no concerns as far as them ever trying to start a fight over any of that.

 

[farmerjan]

I think that since you have had business dealings with the in laws before and you have been able to make it work, that this may also work. One suggestion, since you said that you think that they want to sell it to you a bit at a time so they have money to enjoy retirement....why not suggest to them that they "sell" it to you on paper, and hold the mortgage so that you are only making a certain payment to them over the course of a year, or in a yearly lump sum or something like that. Give them lifetime rights to the house or what ever they are living in, and whatever you both agree to. They will be getting some money to enjoy their retirement, they will not be responsible for the taxes, you will in essence be buying it "a little at a time" in regard to the payment; But you can then start doing any improvements you want/need...fences, cross fencing for rotational grazing, waterers , anything. They are free to come and go if and when they want. It sounds like it basically is working that way now, but this way you will be able to claim any work you do against the farm in your taxes and such. God forbid that something happens to them, and the place has to be sold to settle the estate. This way it takes it out of the estate. Should one or both becomes disabled and they would have to go into a care facility, there are so many laws concerning what you own and all that this might also be a way to take that out of the equation. I don't know about all those ins and outs, I just know that for some nursing homes you can only have x amount of money and certain things will disqualify you for different programs.

The rustic wedding destination might be a good deal, since your wife is a wedding photographer, she would have the inside tract on how to go about what you need to do, and what works, preferred facilities, what people look for and all that.

 

[No Rest Farm]

All very good points Farmer Jan. I think you may be right about going ahead and getting what I can in my name. I already own the home on the farm and a few acres that went with it. We will be moving into it this spring.
One of my roles in local government here is to work with our tourism authority. One of the things they preach is selling experiences as much as products. Evidently some suburban folks enjoy getting out and feeling like they know where their food comes from. The key is to give them the experience they expect which could be different than actual farm life. I've got a second cousin that's doing this. He gave up running a dairy to start growing vegetables and doing all sorts of events. He offered to give me a full tour and help me with ideas. He lives about 2 hours away and we wouldn't be competing for the same customers. All things to think about if you want to make a farm pay for itself.

 

[farmerjan]

@Ranchman90; I do try to pay attention to the trends, but the last few years with the jump up then the sharp decline has really thrown that. USED to be here, spring calves were higher from late feb to early april for locals wanting grass calves and the buyers that were getting calves. Then it fell off some, but often to mid May was a decent time to ship feeders too. Hay season here takes precedence and not much happens june -july. Then heavier weights were fairly good in mid aug. Then, calves coming off pastures in mid-sept right through the first part of Nov. Don't want to take anything during hunting season. Then usually is a small glut of stuff going the first week of dec for folks to pay taxes, but prices were just okay, not great, not awful. We usually would have some not so great weather in Jan and into feb so often very little was moving.
Here we will call the local sale and see if there were any buyers looking for anything. Since we have been selling there for over 30 years, in small quantities at first but now in some larger groups, they have always been pretty decent to us and let us know what is coming up. Also have a friend who is a dealer, and Michael talks to him once or twice a week so keeps up on the way prices are looking. I also go to the sale barn just to check in once or twice a month to sit for an hour or two to see how things are looking. It is right there where my preferred feed mill is so I can make a combined trip. And catch a meal in the restaurant at the sale too.
When prices were high, any time was a good time to sell. This winter has been overall pretty decent, very little snow, we had some rain so that it was hard to get into the fields to load out stuff for a couple of weeks, but overall it has been alot better for all winter sales. Prices were off in dec but have rebounded some now.
There was a couple of bred cow sales in dec; ought to be a few more coming up in a month or so as people get antsy for some stuff to go out on grass and they see the prices have been a little better than last fall. Hay is plentiful and cheap here now, so people feel they can pay a bit more for stuff. I have never seen the reasoning.... but I am "cheap" and we have made some money and expanded by buying some of the lower end stuff and turning them over.
We also attend several bull sales here and just talk and listen to people. I think bulls are over priced in comparison to the feeders. We do buy mostly all good registered bulls to use on the cows. Raised a couple of bull calves that were et's in some cows we bought, and they have done real well.