How many cows to be full-time Rancher?

[Texan]

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

Check your PM. :lol:

 

[TLCfromARK]

So you do not factor in machinery, fuel, meds, fencing, buildings, seed, fertilizers, minerals, additional feeds, taxes, personal living costs, utilities, etc etc etc into your profit?
Bez!

- I never had a cow ask me to buy new machinery. That's my choice, not theirs. I have MUCH better equipment than is necessary to run the cows. I just like doing it that way, but don't pretend to allocate that choice to the cows.
- Meds/seed/fertilizers I included in my $150.
- When people ask how much I make on my "day" job, I don't reduce what I tell them by the taxes. So, I don't quote what I "make" on cows net of taxes.
- My personal living costs have nothing to do with what the cows made.
- My cows have no "utilities" (or TV/Internet for that matter).

Point is, I think alot of folks overly "burden" the profit of the "cows" with the expenses of "living". I try not to do that.
I really was just throwing around rough numbers for the point of discussion anyway.

I thought the topic was how many cattle it would take to be able to quit your day job. I would think that would include your personal living cost. Agree that you don't have to buy "new" equiptment but there is a certain amount of equiptment that you must have & maintain to run cows. There are repairs to fences, barns, land inprovements, etc. that must be taken care of.

As for the first poster, I was told by a old timer a long time ago that IF everything was paid for, land, cows, equiptment, home etc. that you'd need at least 100 head of momma cows. 50 of the calves would be sold for operating expenses, 50 sold for your personal living expenses for the year. If you notice this doesn't allow for buying new equiptment or replacement cows and it assumes you have 100% calf crop ( no loses ) to sell.

;-)

 

[la4angus]

As for the first poster, I was told by a old timer a long time ago that IF everything was paid for, land, cows, equiptment, home etc. that you'd need at least 100 head of momma cows. 50 of the calves would be sold for operating expenses, 50 sold for your personal living expenses for the year. If you notice this doesn't allow for buying new equiptment or replacement cows and it assumes you have 100% calf crop ( no loses ) to sell.

;-)

What about the years, sometimes more than one in a row that the cattle loose money. I know there is some on here that has seen calves need $200.00 to break even and the calves only bring $125.00 per hd.

 

[lakading]

[

Yup. Might as well turn back the covers on your dirt serta right now. :lol:

 

[lakading]

To answer the questions:
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.

My stock in a local ethanol plant has paid 20+% over the last 4 years.

There is ALWAYS opportunity cost. Maybe you can't or won't see it, but it is there SOMEWHERE.

 

[lakading]

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

Using these methods, you will not get an accurat picture of ROA, ROE, or ROI.

 

[lakading]

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.

Beef11, I'd say you are a good businessman. I'd say those who only evaluate their actual cash flow are more infatuated with being cattle producers.

 

[TLCfromARK]

As for the first poster, I was told by a old timer a long time ago that IF everything was paid for, land, cows, equiptment, home etc. that you'd need at least 100 head of momma cows. 50 of the calves would be sold for operating expenses, 50 sold for your personal living expenses for the year. If you notice this doesn't allow for buying new equiptment or replacement cows and it assumes you have 100% calf crop ( no loses ) to sell.

;-)

What about the years, sometimes more than one in a row that the cattle loose money. I know there is some on here that has seen calves need $200.00 to break even and the calves only bring $125.00 per hd.

LA4, in that case it wouldn't matter if you had 100 head or 1,000 you're not going to "make a living" ranching very long.

If you notice I pointed out that there was very little margin for error.
JMHO ;-)

 

[sillco]

Since all the Hobby, full-time rancher debate. I am curious how many cows does a person need to have a chance at making a decent living? Say an income above the poverty level.

I know there is lots of variables, but just for the sake of average, lets say they already own all their own land paid for. Not it is just about management and production? Are the full-time guys living on 100, 200 or 1,000 cows?

If you are not full-time, at what size herd would you quit your day job and concentrate on cows only? Assuming all the infrastructure was their for you to do so.

There is an Excel software program that is easy to use and you can see what it would take just by answering the questions. It is called COW COSTS. You can go to SutherlandAuction.com and see the info.
PS A very good producers cost per cow per year is about $300. :shock:

 

[la4angus]

LA4, in that case it wouldn't matter if you had 100 head or 1,000 you're not going to "make a living" ranching very long.

My point, exactly.