Great Prices???

[LFF]

WRONG!!!

With inflation and the ever increasing cost of operation, prices for cattle is still way below what they should be. May be we as cow calf producer can survive ( many won't ) , however at current prices we can not keep the farms productive enough for future generations of our children. I'm not sure about what western ranchers that graze government lands will be able to do, however I know that a person can never expect to pay for land with cattle in our area. Add another dollar to the pound on feeder calves then I will say prices are great!

LFF

 

[bigbull338]

we will never make a decent profit ever running cattle.an we might as well accept that fact.if anything we barely stay afloat,an we loose more money than we make.ive heard for years those stinking dairymen are getting rich.an that was coming from people gripping bout the price of milk.well everytime we would make money milking cows something would go up to suck the extra profit out.

 

[Howdyjabo]

well everytime we would make money milking cows something would go up to suck the extra profit out.

That pretty much describes the last 30 years for me.
I make investments to cut costs- then something happens and I am right back where I started and NOW have the investment to pay for. I am done investing, just gonna ride out what I have. Told the kids they better get a job and not count on the farm for anything but some sideline cash. My goal was to turn a profitable farm over to the kids- I failed.

I agree the market is high and I am glad-- but its not high enough to be really profitable- inputs are still eating it all up.

 

[agmantoo]

If you want a change then you have to change. I have tried numerous endeavors in the farming scene. I had a confinement hog operation, grew row crops and am now in the feeder calf business. I made some money, no money and money but with each enterprise I tried equally. Initially with each effort I tried what I thought was required to return a good profit. What seemed to be the right approach only put me into position as a "me too" producer as I was copying others that had the same issues. At times, I would break out of the traditional mold and make a few extra bucks but could not do it consistently. As a conventional feeder calf producer I made what the average conventional feeder calf producer earned according to the information I obtained from the extension folks. I was disappointed to say the least. After reading about rotational grazing I decided to try it. This was roughly 12 + years ago. Once I realized that I could go most of the year without hay and my profits started to jump it became a challenge to run year round without hay. Then I decided that I could do without supplemental feed provided I raised calves that could reach a decent market condition off the production on MY place. I worked this out also. My calves will never wean 700 plus pounds but they are very profitable when I market them. Again the returns increased. I was spending 1/4 th of what my check was from the sale barn and when fertilizer hit $880 /ton, I said enough. I decided I would cut the herd in 1/2 if necessary but I was not going to give my money to the commercial fertilizer people. Low and behold, the pastures did not perish nor did the animals starve. By obtaining a little chicken litter the pastures actually flourished and I managed to increase the brood cow headcount. I went through the effort to share this to encourage you to look your operations over. There are things you can change and things you can influence. Put your attentions on these opportunities. Yes, even today a young person can buy and pay for a farm IMO.

 

[Howdyjabo]

Yes, even today a young person can buy and pay for a farm IMO.

My goals were a little higher than that- I wanted to make a good living and have good returns on capital invested.
And I wanted the kids to have it easier than we did when they took over.

Cattle are a good supplementary income- not your sole income.

 

[agmantoo]

What fixed assets have failed to return a decent investment ?

I agree that cattle are a good supplementary income particularly for a startup farmer. However over time should a person desire I see no reason that cattle cannot be the main source. I also think it is foolish not to be diversified. There are times that one may need to make up the losses on the sale of popcorn with the sell of peanuts.

 

[Howdyjabo]

Assets
2 chicken houses
Recieving barn
working barn
Hay barn
Water lines 3 miles
8 frost free drinkers
Fences(miles and miles)
Three miles of roads
6 feed pens ,bunks,concrete pads
Two huge silage pits with concrete floor
Generator shed and huge generator(requirement)
Chicken composter(requirement)
Stack shed (requirement)
4 complete retrofits on 10 year old chicken houses(requirement)
Commodity barn

All were either something I had to do or loose my chicken contract.
Or I calculated how I could save or make money by spending money (I'm good with a pencil). The situation I based those decisions on either changed or disappeared, and irritatingly enough just after I got the projects done more often than was funny .



diversification was part of my problem-- I choose Chicken houses and built them at the perfect time to loose money. Up side I did have chicken manure for the pastures that I now miss.

If I ever sell out- it will be because of market pressures- if there are market pressures on me there will be market pressures on everyone that might be interested in buying my assets- there will be no market for them and the place will be bought at firesale prices or with the intention of bull dozing the land clear. I have seen it with the chicken farms around here- they counted on building equity in the houses and ended up with none.
Cattle around here were built on the back of chicken manure- with that gone the interest in a cattle farm is gone too.

 

[Howdyjabo]

Oh I forgot two if the good ones

I put in two HUGE liquid tanks- to hold a byproduct that had for YEARS been dumped into landfills or composting facilities at a fee.
Not even a year latter- fertilizer and fuel jumped. And they found a local market as fertilizer close by.
I built a loading dock to handle a byproduct that they were Begging me to take. I finally got it built and they upped the price out of my range(spike in gasoline, feed costs, increased demand because of local drought) even before it was used once.

 

[Howdyjabo]

Forgot another one

Sending dead calves to the renderer got too expensive so I built a composter right before BSE hit. The powers that be told me I couldn't use it anymore.

 

[agmantoo]

I do see a lot of differences in our assets. From your list I will make a comparison

Assets

You ...................................................................... me
2 chicken houses ..................................1 layer house being run by a relative as a part time enterprise
Recieving barn ...................................none
working barn ..................................... none
Hay barn ..........................................shared compartment in multi use building
Water lines 3 miles ..............................3300 feet
8 frost free drinkers .............................4
Fences(miles and miles) ..............................Cheap high tensile around 200 AC of which 161 acres in forage
Three miles of roads..............................Fair weather lanes, less than a mile
6 feed pens ,bunks,concrete pads..............none
Two huge silage pits with concrete floor ..... none
Generator shed and huge generator(requirement) ...... none
Chicken composter(requirement) ................one at relative's enterprise
Stack shed (requirement) .........................none
4 complete retrofits on 10 year old chicken houses(requirement)..........storm damage repaired
Commodity barn ................................ none
Liquid tanks ...................................... none
composter........................................ none
brood cow ?..................................... ~100
land available.... acres.........................207 acres @ beef farm
Reading the list of non performing assets has me questioning as to why you continued participating in various ventures without ascertaining the merit. There was no diversification as these were IMO all Ag based. Pardon me for saving it the above appears that you were trying to borrow/buy you way to wealth rather than using your strengths/knowledge in agriculture to excel. Surely some money came in from the ventures but as much or more had to leave to service the expenditures. When I was in the hog business I too made some of the same mistakes. It did not take long for me to realize that I had to do my own thinking and I realized I was the most qualified person to understand my risks tolerance. I do not know how to undo the burden you shoulder with the non performing assets but I do know I would put a halt to any future ones. I was headed the same direction early with my cattle operation as long as I was doing what every one else was doing. I decided to try a smart start directed at controlling or influencing the things I had control over to improve my net profit. Doing so turned my operation around and did so far above any expectation that I ever imagined. Would such a drastic change benefit you?

 

[Howdyjabo]

Our land will not support a living off of cows- not enough land (less than 50 acres in pasture)and the soil is terrible(crawdad soil)
Feeder Calves need inputs to grow enough to make money on our grass/land
Inter seeding is VERY hit and miss. We started with rented pastures and that worked good- till they got ripped out from under you over and over. Thats when we bought the 100 acres- we have 100 more acres but its in woods and hubby wants it to stay that way.
We have always been the ONLY full time farmers in the county without an outside income. And I have no long term debt(I do have money borrowed to buy calves and feed), we paid as we went on everything but the chicken houses(I took from the cattle to pay them off). I know how to live on next to nothing :)

We made choices based on making of living for both of us-- cows would not do that here with what we had available.
Once into the chickens we were stuck- had to ride that one out
We started out making REAL good money preconditioning- all the others choices were so we could do it easier(labor was killing both of us) and to do more(expenses were going up)
Each choice led to the next- each made good sense at the time.
We always made money and it seemed we were progressing. Counted on building assets and selling timber for retirement.
Economic meltdown makes the Assets and timber not enough to retire on.

We hopefully will make great money this year as we had storage and I had most of my feed bought cheap before it jumped. And I managed to buy most of the calves at the low end of the fall market.
what kills me is that next spring it starts all over again trying to squeeze water out of a rock. Unless feed prices drop and the only hope of that is if demand drops, if demand drops the cattle market tanked.

Thsi is a bad time of year for me
I get the winter blues
I have to do the year end records
Hubby buries his head in the sand....... again
He keeps telling me patience it will get better- I'm still waiting


If I could have a do over............
No chicken houses
Hubby would have gotten a job with benefits(he easily could have)
One fenced pasture (for bringing in new calves/cows/bulls, if I used bulls)
No working pens, feeding pens, catch pens- custom hire someone to bring in portable system to work up and haul cattle
Sm Tractor, bushhog
Rent local no till drill
Enough temporary hot fencing to build two rotation pens- Out of one into the next-
A trailer to haul water to where they were
Contracted hay - maybe a canvas hoop storage building(no property taxes)

Cattle high, sell most- cattle low, buy back
If I couldn't feed them they would leave

If it couldn't be loaded up and hauled off the place do without it.

Oh I forgot another good one- we cleaned up some old timber tracts 30 years ago and spent very dear money to replant heavily. We counted on being able to sell a pulp thinning to send the kid to college-- then the tree huggers "saved the trees" and killed the pulpwood market.

 

[bigbull338]

farming is a big gamble an it will always be a gamble.all you can do is make a living at it,an you wont get rich.you better love farming tobe in it.i love it so therefore ill roll with the ups an downs.

 

[TexasBred]

WRONG!!!

With inflation and the ever increasing cost of operation, prices for cattle is still way below what they should be. May be we as cow calf producer can survive ( many won't ) , however at current prices we can not keep the farms productive enough for future generations of our children. I'm not sure about what western ranchers that graze government lands will be able to do, however I know that a person can never expect to pay for land with cattle in our area. Add another dollar to the pound on feeder calves then I will say prices are great!

LFF

SEE NEW THREAD "SOLD STEERS".

 

[bigbull338]

i see that an he did good.but the tax man will get the lions share if he dont widdle that down bigtime.

 

[LFF]

WRONG!!!

With inflation and the ever increasing cost of operation, prices for cattle is still way below what they should be. May be we as cow calf producer can survive ( many won't ) , however at current prices we can not keep the farms productive enough for future generations of our children. I'm not sure about what western ranchers that graze government lands will be able to do, however I know that a person can never expect to pay for land with cattle in our area. Add another dollar to the pound on feeder calves then I will say prices are great!

LFF

SEE NEW THREAD "SOLD STEERS".

Show me the expenses to raise these steers, then we will determine how much money was lost or made.

 

[Bonsman]

WRONG!!!

With inflation and the ever increasing cost of operation, prices for cattle is still way below what they should be. May be we as cow calf producer can survive ( many won't ) , however at current prices we can not keep the farms productive enough for future generations of our children. I'm not sure about what western ranchers that graze government lands will be able to do, however I know that a person can never expect to pay for land with cattle in our area. Add another dollar to the pound on feeder calves then I will say prices are great!

LFF

SEE NEW THREAD "SOLD STEERS".

Show me the expenses to raise these steers, then we will determine how much money was lost or made.

The steers were born during our regular calving season 3/15 to 5/15; stayed on grass with their mothers until weaned in November; fed about 2 lbs of corn per day with alfalfa while being weaned; then turned out on wheat. They had one trip through the chute prior to weaning. So the direct expenses were minimal. The real expense would be the cost to carry the cows from year to year--the cows are paid for; cost of land which is all paid for; property taxes; we raise more alfalfa than we can use so we sell the good hay to the dairies and feed the average hay to the cows during winter (alfalfa is our biggest cash crop); we raise the wheat to harvest and were lucky to have more than enough to graze this year--others in this are were not so fortunate; we raise corn--although I think at times it is cheaper to purchase--it is sure easier to purchase. I guess you should include salt, minerals, electricity for the pump houses, and fuel to check on the little turds. Since we raise most everything that we feed and everything is paid for--then it is hard to put an exact number on the expenses. I would like to think we made a profit. If not then all I would say is :bang:

We still have our non-replacement heifers and some lighter steers to market.

If a person cannot make money this year, then they need to do something else. That said, I do not believe a person can start from nothing, purchase land, cows, equipment, etc, and make a living. I truly think you either need another job or you need to have family help to get going in the farm/ranch business. I am fortunate, my grandfather obtained our "home" place in 1915 and my father owns it now--he is 76. I purchased my own land; but I also have another job.

 

[TexasBred]

WRONG!!!

With inflation and the ever increasing cost of operation, prices for cattle is still way below what they should be. May be we as cow calf producer can survive ( many won't ) , however at current prices we can not keep the farms productive enough for future generations of our children. I'm not sure about what western ranchers that graze government lands will be able to do, however I know that a person can never expect to pay for land with cattle in our area. Add another dollar to the pound on feeder calves then I will say prices are great!

LFF

SEE NEW THREAD "SOLD STEERS".

Show me the expenses to raise these steers, then we will determine how much money was lost or made.

Oh I thought you were just looking for that extra $1.00.....Looks like Bonsman found a big part of it. ;-) Controlling exenses and good management made up the remainder of it.

 

[Stocker Steve]

After the run up in January, have prices peaked for 2011?

 

[TexasBred]

After the run up in January, have prices peaked for 2011?

Wish I knew Steve....still looking awfully stout down this way.