How many cows to be full-time Rancher?

[TheLazyM]

If you don't want to quit, why quit?

its a long time before i'm 45yrs old. i most likely wont quick. but for now its how i make the wife happy. she wants me at home. so to indulge her i go along with it.

 

[Bez!]

[

Now I have to put in my little dig here. I do not care if you are only one year old. Trust me and believe me when I tell you this.

45 is right around the corner!!!!! You will not believe how fast it comes and goes.

Bez!

 

[dun]

[

Particularly the goes part

dun

 

[backhoeboogie]

Going going gone.

Back to the "how many does it take thing" How many kids do you have to have to be a father? Grandfather?

 

[aplusmnt]

I figured there would be a wide range of answers as there has been. Seems around here anyone that has between 100-200 cows also have a full time job.

Seems like if the figure you hear of an average of around $200.00 per cow profit was made it would take over 100 cows to keep you from qualifying for food stamps, and welfare. I know some can live on less than others. But hard to picture anyone raising a family at the poverty level.

I would think a good managed herd of 300 could make a living that would support a family. With that number getting smaller as a person gets older and kids move out, and things get simpler.

 

[Saltydawg]

I'll be happy when I have 60 good breeding cows. Two more years provided I don't get two years of all bull calves or something.

I have other means of income though. Retirement from Navy, natural gas wells on the farm, and I cut lots of firewood(good income up north if you got the woods).
My healthcare is taken care of through my Navy retirement and I don't owe the bank a single cent for anything I own.

I don't spend money on much of anything though if I can help it.
90% of my fence posts I cut on the farm (good supply of locust trees on farm).
90% of my equipment I bought for scrap price and then whipped it back in shape using other scrap equipment I find around. (its not uncommon for my equipment to have parts from several different manufacturers lol)

I bale my own hay and don't buy cattle cept for a new bull every couple years. I prefer to raise my own replacement heifers.
Outside of the little bit of grain I feed them and vaccinations I don't spend much at all on my cows.
All the buildings on the place were already here or have been built by me with help from my family and friends.

I try REALLY hard to eliminate overhead and expenses.

IMO that is the key to making money with cattle.

 

[endebt]

All of yall's calculation look good. Until you have a year like we are having in central Texas. Then you go from 100 head of good mama angus bred cow to about 35 to 40 and no replacement hiefers. With no rain and no hay you have to do something. Hay here went form $30.00 a round bale to $100. overnight. You can not feed mama cows with $100.00 bales of hay. So now we wait on the rain and hope for a hay crop this year.

 

[cypressfarms]

I agree with not putting personal living expenses. That should be done afterwards on your own budget. 150 seems real lean national average is way above that. What does hay cost where you are at? and pasture?

Looks like I was a bit low, maybe more like $180 or so. When I look at my costs for last year:

- $72/head Hay = I raise my own bermuda grass, cost was about $18 per bale including fertilizer and custom baling (I mow and rake, a neighbor charges for the baling). 4 bales per head gets them through the winter fine.
- $45/head = Fertilizer & Winter wheat/pasture mix planting.
- $55/head = Range Cubes
- $8/head = Fuel/equipment maintenance.

* Didn't have any vet/med costs last year on my breeding stock (lucky year). I/family own the land. I didn't include any cost of land in my amount (which perhaps I should have) as I view that asset (land) as an investment of its own which appreciates in value over the years.

So, upon further reflection, probably more like $180 (without land costs) per mother cow for me last year.

No minerals? No worming or other vaccinations? Water? I'm trying to understand better your operation. Maybe I can learn something.

 

[Caustic Burno]

I agree with not putting personal living expenses. That should be done afterwards on your own budget. 150 seems real lean national average is way above that. What does hay cost where you are at? and pasture?

Looks like I was a bit low, maybe more like $180 or so. When I look at my costs for last year:

- $72/head Hay = I raise my own bermuda grass, cost was about $18 per bale including fertilizer and custom baling (I mow and rake, a neighbor charges for the baling). 4 bales per head gets them through the winter fine.
- $45/head = Fertilizer & Winter wheat/pasture mix planting.
- $55/head = Range Cubes
- $8/head = Fuel/equipment maintenance.

* Didn't have any vet/med costs last year on my breeding stock (lucky year). I/family own the land. I didn't include any cost of land in my amount (which perhaps I should have) as I view that asset (land) as an investment of its own which appreciates in value over the years.

So, upon further reflection, probably more like $180 (without land costs) per mother cow for me last year.

No minerals? No worming or other vaccinations? Water? I'm trying to understand better your operation. Maybe I can learn something.

No taxes,no fencing material,no isurance cost associated with the operation.

 

[rk]

I agree with not putting personal living expenses. That should be done afterwards on your own budget. 150 seems real lean national average is way above that. What does hay cost where you are at? and pasture?

Looks like I was a bit low, maybe more like $180 or so. When I look at my costs for last year:

- $72/head Hay = I raise my own bermuda grass, cost was about $18 per bale including fertilizer and custom baling (I mow and rake, a neighbor charges for the baling). 4 bales per head gets them through the winter fine.
- $45/head = Fertilizer & Winter wheat/pasture mix planting.
- $55/head = Range Cubes
- $8/head = Fuel/equipment maintenance.

* Didn't have any vet/med costs last year on my breeding stock (lucky year). I/family own the land. I didn't include any cost of land in my amount (which perhaps I should have) as I view that asset (land) as an investment of its own which appreciates in value over the years.

So, upon further reflection, probably more like $180 (without land costs) per mother cow for me last year.

No minerals? No worming or other vaccinations? Water? I'm trying to understand better your operation. Maybe I can learn something.

What about interest/opportunity cost?

 

[TheLazyM]

come on brother dont rush me i get there when i get there.lol

 

[OklaBrangusBreeder]

To answer the questions:

No minerals?
Well, I buy them some $5 salt blocks when they need it. Otherwise, they do fine with the range cubes and the grass.

Water?
Costs for water? They drink that out of the pond and I don't even charge 'em for it.

No worming or other vaccinations?
I do those on an "as needed" basis, but generally I don't do those much. I've never had any problems on the health of my cows. All my cows seem happy and healthy. (Keep in mind, I've only had cattle about 4 years or so so I still may be in the "beginners luck" stage on that stuff).

Taxes?
You're talking personal property tax? You know, Dad pays those. Not sure what they are, but I don't think they are really that much. I help with some of his chores and some assorted other things during the year, he reciprocates by covering the taxes.

Fencing?
All the land has nice new fences around them that we built when we acquired the land years ago. Haven't had any meaningful fencing costs in many years.

Insurance?
Don't have insurance on anything. I've got an umbrella liability policy that covers everything I own, but nothing more than that. Otherwise, I guess you would say I "self insure" for the most part.

What about interest/opportunity cost?
I don't owe any money on anything, so no interest costs. Opportunity costs? Are you serious, at today's interest rates? Heck, there is no opportunity costs cause the money can't earn squat setting in a bank. Stock market has stunk the last five years.


Any other questions?

 

[DiamondSCattleCo]

Opportunity costs? Are you serious, at today's interest rates? Heck, there is no opportunity costs cause the money can't earn squat setting in a bank. Stock market has stunk the last five years.

OBB, you're doing it right. Opportunity costs have NO business being included in a cost analysis, as they are difficult to pinpoint. When I was working in the city, I did hundreds of cost analyses for large corporations, and if I'd ever tried to put an opportunity cost into the calculations, I would have had my butt kicked out the door. Opportunity costs are used in feasibility analyses, and should NEVER be in a true cost analysis.

Rod

 

[Arnold Ziffle]

OBB, your first comment on this thread seemed pretty believable to me --- you said you could winter the cow for $150 and that sounded plausible to me, for central Oklahoma. The cost for merely wintering a cow for 2 or 3 months in Ok. is a lot different than the costs most folks herein are writing about, so your subsequent comments are what throw most of us for a loop, I imagine. In computing their costs most folks figure a charge for depreciation on equipment, fencing, purchased cows & bulls, building, etc. (less expected salvage value). And the list could go on. You may not have to incur those high dollar costs in any one particular year, but over time you sure will, so the amortization of such costs really has to enter into the computation of cattle keeping cost. I think to do otherwise is something akin to Enron accounting fantasy. And to really get an accurate picture you probably should add in the costs that you have avoided simply by bartering for goods & services. Something else to consider, and that is putting in a cost for pasture and facilities use of at least the amount that you would have to pay to rent comparable ground in the area. In analyzing costs, not putting in a charge for land use, along with having no interest payments on land debt, can surely make an operation look more profitable than it really is. But I applaud you for doing whatever you can to keep you overall costs low and it sounds like you really are keeping them low for the time being. Your cost accounting is just a little deficient IMHO.

By the way, take a look at current rates for money market funds, insured taxable or muni bonds, mutual fund performance over the last few years, etc. You might be surprised at the opportunity costs, not that I'm advocating their inclusion in the cost of keeping your cows..

 

[Hasbeen]

I've only been in this since November so I don't have a real good handle on it yet. Also, I was fortunate in that I have close to enough hay left over from the previous owner that I shouldn't have to buy any this year. However, figuring what I have used so far, estimating what it would have cost, and estimating how long I have to feed during the winter, I probably would have spent $200.00 per head on hay alone. My land is paid for and I would have it anyway so I don't factor it in. Miscellaneous costs such as vet, feed, medicines, have been reasonable, less than $50 per head. I plan to reseed the pastures (seed, lime, fertilizer whatever is needed) but beyond that I hope to hold off on barns, equipment etc. until the money comes in from the first calf crop. For the first few years, any and all profits will go toward farm and herd improvement as needed and as money becomes available. I also still have the cost of a bull (either buy, lease, or AI) ahead within the next few weeks. It will be tight for awhile, but I'm doing my best to stay within my initial investment.

 

[DiamondSCattleCo]

Something else to consider, and that is putting in a cost for pasture and facilities use of at least the amount that you would have to pay to rent comparable ground in the area. In analyzing costs, not putting in a charge for land use, along with having no interest payments on land debt, can surely make an operation look more profitable than it really is.

I was with you, right up to this point. If the land has been bought, paid for and already written off, including a "rent" on the land falls under feasibility costs, not true operational costs. He can either rent the land out, OR he can use it for his livestock, but not both. As such, it also has no place in a cost analysis.

Accurate cost analysis for ranches can be done using simple cash basis methods. Simply look at your true cash flow. As far as equipment amortization goes, leave that to accrual accounting methods on your income tax, but use the true cash payment for your short-term cost analysis. Anything else is guesswork and will not generate a true cost.

Rod

 

[OklaBrangusBreeder]

You know, not to beat the dead the cat here, but...

* I have a Masters Degree in accounting which I use on my "day" job. So I can number crunch with the best of them.

* I don't necessarily agree with the whole "amortize future expenses as part of your current costs approach." Case in point, fencing around the 80 acre farm I use of my Dads. We fenced that property when we bought it back in 1981 or so. Don't recall what it cost back then to fence, but lets say it cost mabye $1,900? That was roughly 25 years ago, so the cost of my "fencing" to date is roughly $75 per year, and going down every year? In the grand scale, that is insignificant and not worth accruing for...

* Likewise, my dad owns another 80 acres that is cleared with a good fence and water that he rents to a neighbor for $900 per year. That farm is probably worth $80,000. So the rent is generating a rate of return of a little over 1%. Again, pretty insignificant. In terms of "opportunity costs" of renting verses running cows, not much "opportunity" there.

* So should I "accrue" some land amount in my cost calculations that is not cash out of my pocket for the land I use? I just don't see how that makes sense by ANY accounting method. I know the IRS would not go for it.

* In my opinion, land is valued based on its fair market value. As an investment, the farm we bought for $400 per acre in 1981 is worth easily double that (or better) today. I allow for that investment to be valued on its own, not based on what little rent it could generate running cows.

* My cost approach is pretty simple. Cash I receive minus expenses that I incur. That's how I calculate it... Based on that approach, my little cattle operation is doing OK.

I'm not trying to argue the point here, just providing some food for thought...

 

[Texan]

Good post, AZ. But some guys just won't ever get it. And I don't care what kind of graduate degree they've got. Everything might not have an out-of-pocket cost, but it's sure as hell got a value.

Until some of you guys are honest with yourselves about what that value is, you don't have a clue about what it really costs to run a cow. And your posts are more suited for the Coffee Shop than the Beginner's Board where people are trying hard to learn.

 

[Beef11]

I'm not an accounting man by trade but i use an oppritunity cost system to validate seperate enterprises. Hay put up is sold to the cows at fair market value. Pasture is rented from the land account at $15-20 per AUM. All are fair market value. This gives me an overview of what i'm making off my cows and not off of my land or farming. If the cattle number comes up negative i would be better off that year selling feed and renting pasture. When i first started i technically lost money due to my time involved. I knew that with time figured in on a small number of cattle i would have a hard time making an efficent go of it. My time was what i paid for the less tangible benefits of cattle.

 

[Bez!]

Good post, AZ. But some guys just won't ever get it. And I don't care what kind of graduate degree they've got. Everything might not have an out-of-pocket cost, but it's sure as be nice got a value.

Until some of you guys are honest with yourselves about what that value is, you don't have a clue about what it really costs to run a cow. And your posts are more suited for the Coffee Shop than the Beginner's Board where people are trying hard to learn.

I do not suppose you would care to clarify your comments would you?

I am not really sure I understood - thanks in advance.

As for the number of cattle required - when times are good - not too many required. When times are bad the fewer you have the better off you are.

Bez!