General Advice for Starting a Profitable Commercial Herd

[Jogeephus]

I have been reading a lot of posts concernig profitability in the cattle business and thought it would be interesting to come up with the top rules to live by to achieve this end. When I first started, I had an ole timer give me some advice which I have tried to live by (most of the time anyway). So far his advice has been sound and when I strayed from it, it has cost me. What I'd like are your opinions to arrive at the top things one should consider. (Some of these may need to be tweeked for the area of the country, I'm not looking for a debate or arguments just general opinions - and as we all know "in your opinion your opinion is always right" so please feel free to voice it and hopefully someone won't set the dogs out on us.) :lol:

The advice I was given was:

1. There is no "Real money" to be made raising cattle. If you got to buy land, equipment etc etc to start up - you will be disappointed. Cattle are foragers. If you got land and forage, they are excellent tools to convert this to cash.

2. Don't go chasing breeds. Find something that will sell, what the buyer wants and what will flourish in your environment and raise it - whether you like the breed or not.

3. A cow will eat more than you can afford to feed them. They eat grass, learn how to grow it and everything else will fall into place.

4. It doesn't matter as much about how fast your calves will grow as is the percent calving rate of your herd. View your ADG on the herd not the individual.

5. Keep track of all your costs. Don't fool yourself. Cows are good about nickleing and diming you to death if your not careful.

6. If you have a dependable source of good quality hay, it is cheaper to buy it. Land used for hay can be used to increase your numbers.

7. Always, always give blackleg shots and if you are only going to worm once, do it in July.

8. If you are going to buy machinery, buy used if possible and don't go borrowing money.

9. Don't get in a hurry when you are fencing or building - do it right the first time and it will be the last time.

10. Don't go skimping on fertility, follow the soil test to the letter.

11. 99% of the time, the cow is going to be more successful calving without your help.

12. If you can't get at least 100 days of winter grazing from rye or wheat, you are losing money.

13. When in doubt, ask questions but keep in mind - "There are those who don't know who think they know and there are those who know they don't know and then there are those who know the answer".

 

[backhoeboogie]

#9 is my favorite. It goes for practically everything.

 

[Caustic Burno]

Good list I would add buy red cows as they are cheaper and run the bull color of your choice to capitalize on the highest selling color in your area.

 

[Beef11]

Myself being in a snow climate i see alot of people make wintering mistakes, for example. If Henry has adequate summer range for 300 cows for 5 months he puts 320 on it for 4 1/2 months then brings them home and feeds them hay which is free because he grows his own. all is well because it only cost him 150 a year to run his cattle yet he still goes broke with 500 calves. Same range would hold 200 cows for 9 months and then he could run them on his hayfield aftermath and only feed minimal hay selling the excess for greenbacks, spending less diesel feeding cows all spring fall and winter much less in debt load or tied up capital (depending) due to the 120 less cows and an actual profit instead of a percieved one. More is often less

 

[backhoeboogie]

Myself being in a snow climate i see alot of people make wintering mistakes, for example. If Henry has adequate summer range for 300 cows for 5 months he puts 320 on it for 4 1/2 months then brings them home and feeds them hay which is free because he grows his own. all is well because it only cost him 150 a year to run his cattle yet he still goes broke with 500 calves. Same range would hold 200 cows for 9 months and then he could run them on his hayfield aftermath and only feed minimal hay selling the excess for greenbacks, spending less diesel feeding cows all spring fall and winter much less in debt load or tied up capital (depending) due to the 120 less cows and an actual profit instead of a percieved one. More is often less

It is the same here for me. Hay is so high that there is good profit in it.

 

[twabscs]

Yeah, backhoe you're right in your area. Around me, 5x6 bales of grass hay still going for $20/bale so it's best to buy my hay and use the extra ground for cows. There will always be differences between areas (drought/too much rain/close to major city). Given that, another rule is: "Take advantage of the benefits provided by your specific area / situation, etc."

Tom

 

[la4angus]

A good set of rules to follow for anyone. I agree with backhoe; #9 goes for practically everything.

#9 Don't get in a hurry when you are fencing or building - do it right the first time and it will be the last time.

 

[travlnusa]

This will be added to the pile of posts I have printed out.

Thanks

 

[Double A Ranch]

lol I like the last one. I know too many of the don't know and think they know.

 

[Caustic Burno]

I would add for this area I would want the optimum cow,
That would be a herd of 1000 pound Brangus, with a polled Hereford bull, or the old fashion Herefords with an Angus Bull.
Calfs always bring a premium.
Less meds for a 1000 pound cow.
Less feed for a 1000 pound cow= optimizing grass and hay.
The smaller cow will grow off just as good a calf with lower expenses.

 

[Jogeephus]

An order buyer told me - referring to your combination - "They don't get no finer than that".

 

[backhoeboogie]

I would add for this area I would want the optimum cow,
That would be a herd of 1000 pound Brangus, with a polled Hereford bull, or the old fashion Herefords with an Angus Bull.
Calfs always bring a premium.
Less meds for a 1000 pound cow.
Less feed for a 1000 pound cow= optimizing grass and hay.
The smaller cow will grow off just as good a calf with lower expenses.

That's down the road.

Trying to get that brangus bloodline ouf of that bull and into the good cows I have. Plus into the brangus cows I have acquired.

When I change bulls, I intend to follow your advice. Been watching 4 different sale barns pretty close and taking note on what fetches the most nickels for buyers around here.

 

[farmerjohn]

Yeah, backhoe you're right in your area. Around me, 5x6 bales of grass hay still going for $20/bale so it's best to buy my hay and use the extra ground for cows. There will always be differences between areas (drought/too much rain/close to major city). Given that, another rule is: "Take advantage of the benefits provided by your specific area / situation, etc."

Tom

Have you ever checked the protein content or RFV of your $20.00 hay?

You know what they say, you get what you pay for!

 

[HOSS]

One of the best ones for making a profit is not borrowing money. Interest will eat up potential profit faster then my herd bull eats hay. Everything that I have that is associated with the farm is paid for. If I don't have the cash......it doesn't get bought. Thats land, tractors, equipment and cows. I am in no hurry to grow too big too fast. I maintain my equipment for optimum life and when I do build something it is built to last with minimal maintenance.

Our economy is built on debt. It can never last. People finance hamburgers these days as every fast food joint takes credit cards. Could you have ever dreamed of that 30 years ago? Everyone is mortgaged to the eyebrows these days with 40k trucks, 300k homes with interest only loans, boats, atv's, credit cards, signature loans and personal lines of credit. Farms are ran on borrowing money in the hopes of making enough to pay the loans and pocket a few bucks. I am not wired that way. Pay as I go.

I heard on the radio today that the average credit card user has 9k in cc debt......unbelievable! It is our want it now, microwavable society that is not willing to put the work in up front to get what they want..........well enough of my soapbox :lol:

 

[Caustic Burno]

One of the best ones for making a profit is not borrowing money. Interest will eat up potential profit faster then my herd bull eats hay. Everything that I have that is associated with the farm is paid for. If I don't have the cash......it doesn't get bought. Thats land, tractors, equipment and cows. I am in no hurry to grow too big too fast. I maintain my equipment for optimum life and when I do build something it is built to last with minimal maintenance.

Our economy is built on debt. It can never last. People finance hamburgers these days as every fast food joint takes credit cards. Could you have ever dreamed of that 30 years ago? Everyone is mortgaged to the eyebrows these days with 40k trucks, 300k homes with interest only loans, boats, atv's, credit cards, signature loans and personal lines of credit. Farms are ran on borrowing money in the hopes of making enough to pay the loans and pocket a few bucks. I am not wired that way. Pay as I go.

I heard on the radio today that the average credit card user has 9k in cc debt......unbelievable! It is our want it now, microwavable society that is not willing to put the work in up front to get what they want..........well enough of my soapbox :lol:

On this we agree sooner or later that debt has to be serviced,
this country is one world event away from colapse of the stock market and major banks.

 

[TEXANGRANCH]

buy medium frame cows, black angus if you can afford them Then breed to curvebender bulls to maximize your calf weights.

 

[houstoncutter]

On #9 rule, good rule, but dont get hung up on trying to make everything just perfect. Remember you are talking commercial here, it dont have to be perfect just funtional, you aint trying to impress somebody that might be buying your seed stock...All it takes is a couple of bulls in heat to totally destroy that pretty fence... Sometimes I think all of us get a little hung up on doing things just perfect,,,, and in the mean time we dont get things done that need to be taken care of

As for curve bender bulls, if it is a breed that currently is not in favor and the price is right go for. Otherwise forget it, you can never justify the cost of a bull that cost that much. Do the math it is a losing propersition.

 

[houstoncutter]

One more thing to keep in mind on making a profit. Hay is usually your biggest expense. Buy hay that is just good enough for your cow to get by on with mineral. Bout 8 percent protein will usually get the job done....High quality hay is great, but you are going to pay more for it, and that cows is going to eat twice to three times as much. There goes you profit out the poop shute....

 

[Beef11]

buy medium frame cows, black angus if you can afford them Then breed to curvebender bulls to maximize your calf weights.

Curvebender hereford bulls to get that kick of hybrid vigor you can take to the bank i assume.

 

[Ryder]

One of the best ones for making a profit is not borrowing money. Interest will eat up potential profit faster then my herd bull eats hay. Everything that I have that is associated with the farm is paid for. If I don't have the cash......it doesn't get bought. Thats land, tractors, equipment and cows. I am in no hurry to grow too big too fast. I maintain my equipment for optimum life and when I do build something it is built to last with minimal maintenance.

Our economy is built on debt. It can never last. People finance hamburgers these days as every fast food joint takes credit cards. Could you have ever dreamed of that 30 years ago? Everyone is mortgaged to the eyebrows these days with 40k trucks, 300k homes with interest only loans, boats, atv's, credit cards, signature loans and personal lines of credit. Farms are ran on borrowing money in the hopes of making enough to pay the loans and pocket a few bucks. I am not wired that way. Pay as I go.

I heard on the radio today that the average credit card user has 9k in cc debt......unbelievable! It is our want it now, microwavable society that is not willing to put the work in up front to get what they want..........well enough of my soapbox :lol:

On this we agree sooner or later that debt has to be serviced,
this country is one world event away from colapse of the stock market and major banks.

It is not even going to take a world event to collapse the stock market. It probably is in the process now. This run up from the lows in the S&P looks like a normal technical rally in a bear market.
Housing market is falling. Lenders are going to be holding a lot of worthless paper.