Fast Money

[cmjust0]

I just don't think people realize how much beef is readily supplied to the market at a loss, or even at a meager gain that MUST be supplemented by outside income... Imagine the price of beef if all the sideliners, the so-called "hobby farmers," and all the other little guys stopped producing.. It would skyrocket...

Anyway, I've heard that you can make more money with roughly the same time, effort and acreage if you add meat goats to your lineup, but that's about as close as I can come to "fast money".. Apparently, cattle naturally ignore about 90% of a goat's diet anyway, so there's very little overlap.. They say it's pretty much 'just add goats' and make more money.

I've seen a lot of goats in my neck of the woods lately, so there might be something to it..

 

[Caustic Burno]

You can make money in cattle if your truthful to yourself about the real expenses and live within your means as another poster commented earlier. You have to be a jack of all trades can't haul something to town ever time it breaks. Most of all this is a biz for the long haul, if you are smart you get a little more efficent ever year or go belly up IMO.

 

[hillbilly]

Buy cheap cattle and sell them high...sounds easy.

When I was a teenager I used my hay hauling money
to buy 3 to 4 wts of holstine steers with pot bellies & horns.

I'd take them home, worm them, dehorn them DOUBLE implant
them and turn them into a abandoned apple orchard at my
grandads place.

Almost always made good money.

hillbilly

 

[redfornow]

The same logic applies to businesses. 98% of all business go out within five years. It adds up this way, if you dont plan the first bad year puts you out. For some its the first bad month or quarter. Those same people will tell you there is no money in "X" while others go on.

Same goes for cattle, there is money. More at times than at others. Thats not farming that is business in general. Most people are great at counting the money, but rarely is there an exit plan that goes beyond what can be made.
Your first good year dont go into debt just because the bank will give it to you.
Asset related income. thats the name of the game

MD

 

[Bama]

When some folks figure the profit they make on cattle thay don't look at the whole picture. Lets say I buy a calf for $300 dollars and sell it for $600 dollars. Thats $300 dollars profit, right?. Figure in the fence maintenance, pasture maintenance, vet bills, fuel, feed, utilities, equipment maintenance, minerals, supplies, vechicle depreciation, income taxes, hired labor, animal health and medication, fees and commisions, not to mention pasture rent and hopefully not a lot of borrowed money interest payments, and a host of other expenses I have left out. That $300 dollar profit ain't there anymore.

 

[J]

When some folks figure the profit they make on cattle thay don't look at the whole picture. Lets say I buy a calf for $300 dollars and sell it for $600 dollars. Thats $300 dollars profit, right?. Figure in the fence maintenance, pasture maintenance, vet bills, fuel, feed, utilities, equipment maintenance, minerals, supplies, vechicle depreciation, income taxes, hired labor, animal health and medication, fees and commisions, not to mention pasture rent and hopefully not a lot of borrowed money interest payments, and a host of other expenses I have left out. That $300 dollar profit ain't there anymore.

Then how can they justify doing it again year after year?

 

[memanpa]

j
don't know why but i have a gut feeling susiedavid will be around after a lot of us are gone!!!!

 

[Caustic Burno]

When some folks figure the profit they make on cattle thay don't look at the whole picture. Lets say I buy a calf for $300 dollars and sell it for $600 dollars. Thats $300 dollars profit, right?. Figure in the fence maintenance, pasture maintenance, vet bills, fuel, feed, utilities, equipment maintenance, minerals, supplies, vechicle depreciation, income taxes, hired labor, animal health and medication, fees and commisions, not to mention pasture rent and hopefully not a lot of borrowed money interest payments, and a host of other expenses I have left out. That $300 dollar profit ain't there anymore.

Spoken like a true cattleman with a sharp pencil.

 

[Bama]

When some folks figure the profit they make on cattle thay don't look at the whole picture. Lets say I buy a calf for $300 dollars and sell it for $600 dollars. Thats $300 dollars profit, right?. Figure in the fence maintenance, pasture maintenance, vet bills, fuel, feed, utilities, equipment maintenance, minerals, supplies, vechicle depreciation, income taxes, hired labor, animal health and medication, fees and commisions, not to mention pasture rent and hopefully not a lot of borrowed money interest payments, and a host of other expenses I have left out. That $300 dollar profit ain't there anymore.

Then how can they justify doing it again year after year?

I don't make my living off of my cattle, My hats off to the folks that do. They have a lot of respect from me. I don't plan on making a lot of money at any one time. I strive to make a little money a lot of the time. Yea, I generally beat the $100 per head figure, but my calves are not pampered and I don't drive a $47,000 truck.

 

[redfornow]

Bama,

Good points, spoken like someone who could make a livin not only in the cattle business, but in alot of businesses.

MD

 

[farmer4620]

I know theres no need to preach to the choir but obviously there are some people out there that think farmers are rich just cause they have new trucks and everything. The way our taxing system is set up you have to buy somethign every year inorder to not pay a bunch of income tax and when you are farmign full time your truck is your office and you cant afford to be workin on your truck in the middle of harvest or planting when you have enough stuff to worry about. Most trucks are 40,000 dollars that hauls cattle, transports employees, tools, equipment, and is used for a lot of stuff for a lot of miles and then traded back in for 20,000 dollars

 

[cypressfarms]

Today I brought my chevy truck in for some service. Being a small town dealership, I asked the manager if I could take one of their 2500's out for the day while they were working on mine (I have a crew cab-4 door- 1500). They gave me a 2006 Chevy 2500HD with the duramax diesel. The thing had 360 hp, and a sticker price of $50,000. No kidding, $50,000. It was better than any office inside, with leather, 6cd, and too many features that I didn't even know about. I guess I got to see how the big players live for one day. My conclusions:

-$50,000 is entirely too much for a truck. Duhh.

-While I'm sure the duramax would pull a city block, my 5.3 has plenty enough power for me.

-The thought of the note for that truck compared to mine was scary.

-It really was just an upscale version of my pickup. Why spend that kind of money so my butt will be cushoined by leather and transported by a duramax?

Nice truck, but not for me.

 

[SF]

... obviously there are some people out there that think farmers are rich just cause they have new trucks and everything. The way our taxing system is set up you have to buy somethign every year inorder to not pay a bunch of income tax and when you are farmign full time your truck is your office and you cant afford to be workin on your truck in the middle of harvest or planting when you have enough stuff to worry about...

I don't necessarily think farmers are rich just because they have new trucks and everything. Rich is a relative term. But they are certainly not broke or poor. Broke people and poor people don't buy those things.

Accounting 101, you cannot spend your way out of paying taxes. You only pay taxes when you make money. Using your info, if you buy a 40,000 pickup, salvage value of 20,000, means you have 20,000 worth of depreciation. Assuming this is over a 2 year period, that will be about 10,000 per year. You taxable income will be reduced by 10,000, thus reducing your taxes by 1,000 to 3,200 depending upon which tax bracket you are in. In summary you will spend 40,000 (if paying cash) to save 1,000 to 3,200 in taxes. If you finance and make payments, then we can assume a 700 per month payment, so you will spend 8,400 to save 1,000 to 3,200. Just doesn't make sense now does it.

If you make money, you pay taxes. If you don't pay taxes, you; 1) dont' make any money, 2) are evading taxes and may someday face prosecution.

 

[SF]

When some folks figure the profit they make on cattle thay don't look at the whole picture. Lets say I buy a calf for $300 dollars and sell it for $600 dollars. Thats $300 dollars profit, right?. Figure in the fence maintenance, pasture maintenance, vet bills, fuel, feed, utilities, equipment maintenance, minerals, supplies, vechicle depreciation, income taxes, hired labor, animal health and medication, fees and commisions, not to mention pasture rent and hopefully not a lot of borrowed money interest payments, and a host of other expenses I have left out. That $300 dollar profit ain't there anymore.

The $300 is not profit, one must take out the other expenses, depreciation, etc..., but my point was and is: "If there isn't any money in the cattle business, then why do it".

We are each entitled to our opinions, you to yours, and I am certainly entitled to mine. Most people I know that raise cattle make good money at it. Guess they are just lucky or too stupid to know that it is impossible for them to really be making money according to the experts on this board. :lol: :lol:

 

[Caustic Burno]

... obviously there are some people out there that think farmers are rich just cause they have new trucks and everything. The way our taxing system is set up you have to buy somethign every year inorder to not pay a bunch of income tax and when you are farmign full time your truck is your office and you cant afford to be workin on your truck in the middle of harvest or planting when you have enough stuff to worry about...

I don't necessarily think farmers are rich just because they have new trucks and everything. Rich is a relative term. But they are certainly not broke or poor. Broke people and poor people don't buy those things.

Accounting 101, you cannot spend your way out of paying taxes. You only pay taxes when you make money. Using your info, if you buy a 40,000 pickup, salvage value of 20,000, means you have 20,000 worth of depreciation. Assuming this is over a 2 year period, that will be about 10,000 per year. You taxable income will be reduced by 10,000, thus reducing your taxes by 1,000 to 3,200 depending upon which tax bracket you are in. In summary you will spend 40,000 (if paying cash) to save 1,000 to 3,200 in taxes. If you finance and make payments, then we can assume a 700 per month payment, so you will spend 8,400 to save 1,000 to 3,200. Just doesn't make sense now does it.

If you make money, you pay taxes. If you don't pay taxes, you; 1) dont' make any money, 2) are evading taxes and may someday face prosecution.

So many think they are cuttin a big hog by spending money and saving all those taxes.
Depreciation doesn't pay when you can take the money and average 8 to 10% on the NYSE and better if your a savy investor..

 

[SF]

... obviously there are some people out there that think farmers are rich just cause they have new trucks and everything. The way our taxing system is set up you have to buy somethign every year inorder to not pay a bunch of income tax and when you are farmign full time your truck is your office and you cant afford to be workin on your truck in the middle of harvest or planting when you have enough stuff to worry about...

I don't necessarily think farmers are rich just because they have new trucks and everything. Rich is a relative term. But they are certainly not broke or poor. Broke people and poor people don't buy those things.

Accounting 101, you cannot spend your way out of paying taxes. You only pay taxes when you make money. Using your info, if you buy a 40,000 pickup, salvage value of 20,000, means you have 20,000 worth of depreciation. Assuming this is over a 2 year period, that will be about 10,000 per year. You taxable income will be reduced by 10,000, thus reducing your taxes by 1,000 to 3,200 depending upon which tax bracket you are in. In summary you will spend 40,000 (if paying cash) to save 1,000 to 3,200 in taxes. If you finance and make payments, then we can assume a 700 per month payment, so you will spend 8,400 to save 1,000 to 3,200. Just doesn't make sense now does it.

If you make money, you pay taxes. If you don't pay taxes, you; 1) dont' make any money, 2) are evading taxes and may someday face prosecution.

So many think they are cuttin a big hog by spending money and saving all those taxes.
Depreciation doesn't pay when you can take the money and average 8 to 10% on the NYSE and better if your a savy investor..

Or buy a few good cows, or maybe a really good bull. Depreciate them, upgrade your herd, and make more money with the investment. JMO

 

[Caustic Burno]

Take that 40 grand for a pick up and youlose money the minute you plop your big butt in it.
Or you can put your 40 grand where it will make money
http://moneycentral.msn.com/msn/stock_q ... =prnex&a=0

 

[farmer4620]

5 years on truck

 

[CattleAnnie]

Well, although "fast money" and "cattle" sure haven't been words I've ever associated together, about the quickest buck (for money, time and labour) I ever turned on cattle was as follows:

Pre-BSE when cull cows actually had a decent dollar value, I picked up about twenty older granny cows with fat backed calves (around month old) at the sales over a couple weeks of auction market time in the early summer.

The cows were obviously raising what should be their last calves, but although a bit thin, overall not bad flesh. Some had toes that were a little long. Some had droopy bags that didn't look like they'd be much fun to start a calf onto when they freshened, but as I mentioned earlier, all the pairs had nice healthy, fat-backed calves; so I figured what the heck, calves seem to be doing well off those udders and seeing as I wasn't going to be calving them out, wasn't too worried about the udder structure as long as Momma Cow was milking well.

Anyway, probably just got lucky, because it worked well. Turned them onto grass for the summer. Sold them early in the fall when the market was nice and high (before Fall Run). Cows had all gained weight nicely and the calves were dandy. Lucky again, as I didn't lose any cows or calves over the summer

Sold the cows by the pound for more than I paid for them with a calves at side, and the calves were just gravy from there on it.

Costs to run them were minimal. Just grass, water, and some salt. No bull as wasn't wanting them bred, and didn't even have to fix fences, because the old gals seemed pretty content to just fill their faces and lick their calves.

Not sure if the circumstances could ever be duplicated here again, unless cull cow values climb up out of the proverbial toilet.

Unfortunately, after that my luck plain ran out on the cattle front. BSE reared it's ugly head. Sure hope things keep picking up though, as really love the cattle business. ;-)


Take care.

 

[SF]

5 years on truck

You can escalate your depreciation if you are trading in every two years. If you are trading in to get 20k out of it, this will be in two or three years tops. Irrelevant though, if you depreciate over 5 years, then the tax savings is basically nil.