Gross sales/net profit

[Bigfoot]

Spent the last week and a half closing out the books for 2014. I know I've posted on here, many times that I don't make any money on cattle. That statement is true, and untrue at the same time. With that said, I'm going to post some percentages I came up with. These percents are "actual" inputs, any of us that farm, and work in town, know what I'm talking about.

My gross cattle sales were up 37% from 2013 to 2014.
My net on the cattle sales were about 20% less than last year.
In other words, net was up, but on a percent basis it was lower.

Mistakes I made:
Didn't strike while the iron was hot, and misjudged that cattle would stay so high so long.
Fed too many concentrates.
Hired a little too much work done, but got some fences really straightened out.
Went overboard on having rock hauled. Widened some roads, and rocked around some barns. Probably wouldn't have done that if cattle were cheap.

Not sure why I'm posting this, but I usually play with figures, and thought I would share.

 

[skyhightree1]

I run reports monthly quarterly yearly etc just to see how im doing and where I am at as compared to years before. I will say its really easy not to make money if you get carried away with spending. I realized when I darn near lost everything I had that nice new shiny equip is nice and good to have but if you have no work you have problems. I also operate my business like this. I will buy 2nd hand vehicles that are fairly reliable or may need some work. I am doing a lot less work than when I had all new shiny stuff and my profit margin is a lot greater now because it took me a while to realize to remain relevant I need to have stuff that is functional just may not be as pretty. That is how I operate my cattle I am sure there is a ton of things I should do but I don't because I am still functioning well with what I have. I think sometimes we get caught up in hoopla instead of saying to yourself my profit will be greater if I can restrict my purchases and still remain functional. I was making a ton of money and bought a 5000 sq ft house in the burbs in a gated community when it was just me just because I could afford it big mistake cause in 2008-2009 I wish I had that money I tossed away on that #^%#^% HOUSE. We built a new house out on the farm a lot less money and only 2100 sq ft hind sight sure is 20/20

 

[Bigfoot]

Not sure what made me post that, but me and the locals spent a lot time last year slapping each other on the back, and telling each other prices were up. I didn't make the most of it. Celebrated by spending money. Didn't buy I thing I didn't need though. I just bought some stuff I wouldn't have if weaned steers were 1.25 a pound.

 

[skyhightree1]

It happens..

 

[jedstivers]

You have to have fence and you really need good access. Don't count the money you spent on those against one year. That stuff will be there for lots of years. Devide by 5 at least and also try to do some gravel work every year, it's better to maintain than build or build back. On the fence you can eventually get it all built but then you will have some repairs but that's almost nothing compared to the building cost.

 

[Nesikep]

I think you do need to spend *some* money on upgrades/repairs while times are good, that'll enable you to skip a few years when prices are bad. This year I rebuilt 2 vehicles, the baler engine and both chain saws. Going to fix up the swather here soon. Do a little fencing every year not because money is easier, but because it's hopeless to fix all the fences at once... we have far too many.
We're going to stock up on diesel, oil, bale twine and other consumables this year.. I'm going to buy a whole bunch of angle iron, tubing, etc since steel prices are down, that'll enable me to either make custom stuff for people (for profit, they pay the current price when I build it), or build my own stuff cheaper.

Income from cattle has only increased enough to make up for the lesser hay sales, but I have a LOT more stock, and this coming year my gross will be much higher.. I will probably have 30 young animals to sell, as well as 5 cows or so.

Things like building roads, buying expensive equipment, etc SHOULD be done while prices are good, that'll give you some writeoffs to save on additional taxes, though I'm not the kind of guy who would like to have payments on something for 10 years.. to much uncertainty there.

 

[tom4018]

You got me to thinking and looking at mine.

My gross numbers are close to yours off selling only one more head.
My net was a lot better though and I did a lot of gravel work last year. My net numbers don't include any depreciation just cash in out type figures as our tax person figures the depreciation.
Our spreadsheets track profit per animal sold and it was about 35% better than 2013 even with spending 20% more overall.

 

[M5farm]

I figure fence in with expenses anyway. I won't hire work done till I'm dead or disabled. I too spent a lot of money last year you have To know when and how much so you can keep un sam satisfied. If you reinvested profits into farm you'll be OK.

 

[highgrit]

I spent more than I made again this year in the cattle business and farming. But at least it kept me busy and out of trouble. I've never regretted a purchase yet, but selling is another story.

 

[1982vett]

Estimated Schedule F comes in at about $265 a calf sold.....Variables even their since at least 8 were sold in 2015 instead of 2014 and another 8 were kept fore replacements....however those could have been sold and proceeds gone to buying replacements.

186 a head in 2013

 

[TexasBred]

You have to have fence and you really need good access. Don't count the money you spent on those against one year. That stuff will be there for lots of years. Devide by 5 at least and also try to do some gravel work every year, it's better to maintain than build or build back. On the fence you can eventually get it all built but then you will have some repairs but that's almost nothing compared to the building cost.

From an accounting standpoint we never build any new fence. We simply repair existing fence.

 

[cow pollinater]

Last year I lost money on the cattle part of things. The drought shot my hay bill through the roof but this year will be break even income wise plus a bunch of heifers and two horses that will add to my net worth so I'm happy.

 

[jedstivers]

You have to have fence and you really need good access. Don't count the money you spent on those against one year. That stuff will be there for lots of years. Devide by 5 at least and also try to do some gravel work every year, it's better to maintain than build or build back. On the fence you can eventually get it all built but then you will have some repairs but that's almost nothing compared to the building cost.

From an accounting standpoint we never build any new fence. We simply repair existing fence.

Well yes that's true. R&M

 

[Angus Cowman]

I just figured mine for this yr it seems I am still right at 100% net Profit on my gross profit
I usually don't figure it because I try not to claim it
When you use someone else's truck someone else's trailer and just pick up someone else's cattle to sell your inputs remain low
Now the poor folks whos cattle I sell they can write them off as a 100% loss so see I am doing my fellow cattlemen a service because otherwise they woukd be having to pay taxes on the income of those cattle they sold but since I relieved them of their cattle they didn't have to pay the I R S
It is a Win Win for both of us And some say crime doesn't pay

 

[M5farm]

Did mine tonight. I spend a pile and made a little. I have a decent profit this year. Wouldn't want the irs to classify me as a hobby farm. I went back and figured everything that I sold using last Jan prices and still made money.

 

[bigbull338]

if you make money in cattle youve got to spend money.ive made and spent money last year.ill make and spend money as well this year.

 

[TexasBred]

Did mine tonight. I spend a pile and made a little. I have a decent profit this year. Wouldn't want the irs to classify me as a hobby farm. I went back and figured everything that I sold using last Jan prices and still made money.

I dug up the cigar box and it still had a few dollars in it and everything is paid fer so I guess I made a bit.

 

[M5farm]

Did mine tonight. I spend a pile and made a little. I have a decent profit this year. Wouldn't want the irs to classify me as a hobby farm. I went back and figured everything that I sold using last Jan prices and still made money.

I dug up the cigar box and it still had a few dollars in it and everything is paid fer so I guess I made a bit.

pretty much the way I do things TB. Its all paid for and I have money left over. I don't owe nobody nuttin on the farm side.

 

[TexasBred]

Did mine tonight. I spend a pile and made a little. I have a decent profit this year. Wouldn't want the irs to classify me as a hobby farm. I went back and figured everything that I sold using last Jan prices and still made money.

I dug up the cigar box and it still had a few dollars in it and everything is paid fer so I guess I made a bit.

pretty much the way I do things TB. Its all paid for and I have money left over. I don't owe nobody nuttin on the farm side.

Sounds like we need to throw a small party with the profits of these operations. (Don't invite too many folks though). :lol2:

 

[M5farm]

Sorry but my wife looked at my notes and held her hand out. I might have enough for a 6 pack and a couple big women dancers left