Figuring profit per cow

[tom4018]

Jeds right. A boy, late 20's just gave $8500 an acre for a place down the road from me to row crop. It want be long till that hits a brick wall.

How many acres was the place? What county is it in?

 

[Bigfoot]

250, or a little better. Christian county. A lot of them bringing that, and more.

 

[H and H]

Did he come to the table with a pile of cash? I'd think no one is going to loan that kind of money with corn soon to have a 3.xx in front of it.

We have seen a few high dollar irrigated farms change hands the last year or two; most of the new owners came with 40+% cash.

 

[Bigfoot]

Financed it. They are also not big money people. Most of what they farm, and this place is no exception is not really well drained. they still have beans out.

 

[H and H]

I need to find a bank like that...ok, maybe not.

For the sake of simple math - 5% interest on that is $425/ acre. I'd hate to make those payments for the next 30 or so years.

 

[tom4018]

I need to find a bank like that...ok, maybe not.

For the sake of simple math - 5% interest on that is $425/ acre. I'd hate to make those payments for the next 30 or so years.

I just figured it at 20 years and no interest, pushing $9000 a month payment or a little over a $100,000 annually.
:shock:

 

[Stocker Steve]

Did he come to the table with a pile of cash? I'd think no one is going to loan that kind of money with corn soon to have a 3.xx in front of it.

- Banks will cash flow the existing operation, along with income from working out, plus income from the new property. Makes some sense if prices are going up and you like having 2 or 3 jobs. I checked this fall and the "planning price" at my bank was over $5/bu.
- Banks will want a big down payment, and many of the talking heads say its OK to pay too much as long as you put enough down... :? :? But if you don't have the cash then some banks will do the paper work for an FSA guaranteed loan. The government is OK with a low down payment since they want to prop up the economy. Sometimes the gov will also subsidize the interest. This young guy may have gotten a Beginning Farmer Loan.
- Folks seem to be more practical in the west. Lots of MT land in our area changed hands before the 80's farm crisis, but it was usually contract for deed. So the buyers were able to walk away w/o losing the home place too when things went bad.

 

[Brute 23]

I know several guys in there 20s who have gotten loans for $500K, 2,3,$4M. None of them had any thing to put down. There are people looking for places to put money. On some thing land or a business with assets you can get a loan pretty easy.

The sad part is they think because got the loan... it was a good idea.

 

[js1234]

Those that do this for a living and truly lose money every year soon get a ....For Sale/Auction sign in the yard.

Very true.

 

[js1234]

I know several guys in there 20s who have gotten loans for $500K, 2,3,$4M. None of them had any thing to put down. There are people looking for places to put money. On some thing land or a business with assets you can get a loan pretty easy.

The sad part is they think because got the loan... it was a good idea.

Also very true, especially the last part. Getting money for expensive ground isn't that hard. Finding the pieces that are worth it, and there are a few, is very difficult. Loan officers and loan committees, just because they are on the other side of the desk don't necessarily know more than the borrower and often quite a bit less.

 

[BobbyLummus]

Profit per cow is not so complicated here in South Carolina . My cows graze fescue year around for the most part and are fat and healthy . I'm making a profit on the second calf of almost every cow I've ever bought (commercial black hided cows from local sale barn) I wean 5-6 wgt calves in the trailer on the way to the sale. . -- This is good supplemental income for me and I enjoy doing the work.