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<blockquote data-quote="bullred" data-source="post: 206477" data-attributes="member: 1733"><p>Very well said, JK.</p><p></p><p>Razorback, I would only add that even though it is very hard to maintain a positive cash flow with a small operation (primarily because of the reasons JK listed above) that doesn't mean you shouldn't operate it as a business. In fact, if you are planning on taking advantage of the tax benefits, you are compeled to operate it as a business rather than a hobby.</p><p></p><p>A few weeks ago there was a very lengthy discussion of average operating cost for a cow/calf operation. As a (very loose) rule of thumb, a responsible operator is going to have a cost basis of about $1.00/day per brood cow. This doesn't include any depreciation, or cost of labor. A larger operator can take advantage of the economies of scale in order to bring that down. And conversely a smaller operator is going to be spending much more because of the various inefficiencies.</p><p></p><p>This will give you a rough idea of where you'll be starting, but maintain your own meticulous records and let us know what you come up with. Welcome aboard.</p></blockquote><p></p>
[QUOTE="bullred, post: 206477, member: 1733"] Very well said, JK. Razorback, I would only add that even though it is very hard to maintain a positive cash flow with a small operation (primarily because of the reasons JK listed above) that doesn't mean you shouldn't operate it as a business. In fact, if you are planning on taking advantage of the tax benefits, you are compeled to operate it as a business rather than a hobby. A few weeks ago there was a very lengthy discussion of average operating cost for a cow/calf operation. As a (very loose) rule of thumb, a responsible operator is going to have a cost basis of about $1.00/day per brood cow. This doesn't include any depreciation, or cost of labor. A larger operator can take advantage of the economies of scale in order to bring that down. And conversely a smaller operator is going to be spending much more because of the various inefficiencies. This will give you a rough idea of where you'll be starting, but maintain your own meticulous records and let us know what you come up with. Welcome aboard. [/QUOTE]
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