Is Beef a Heavily Subsidized Product

[Caustic Burno]

how much is a 600 lb calf supposed to be worth 'to make a profit? 1,500...2,000...3,000... ??

Right now you get 1.50.. or 900.00

where would you need it to be to 'make money'?

My cost on a cow is roughly 1.50 a day
that is 550 dollars a year to keep her standing in the pasture.
These will vary widely depending on the debt the cow is having to service.

 

[RanchMan90]

how much is a 600 lb calf supposed to be worth 'to make a profit? 1,500...2,000...3,000... ??

Right now you get 1.50.. or 900.00

where would you need it to be to 'make money'?

My cost on a cow is roughly 1.50 a day
that is 550 dollars a year to keep her standing in the pasture.
These will vary widely depending on the debt the cow is having to service.

Looks like a fair margin between income and expenses there without debt load?

 

[Caustic Burno]

Those cows are not servicing a debt.
My new tractor is an 06 replaced a 67model the other tractor is a 77 model.
It would be hard today to break even on the average herd that had a debt load.

 

[True Grit Farms]

how much is a 600 lb calf supposed to be worth 'to make a profit? 1,500...2,000...3,000... ??

Right now you get 1.50.. or 900.00

where would you need it to be to 'make money'?

There's a big difference between making money and making a living off cows. $1.50 for a 6 weight is good enough for me. You can buy the best 6 weight steer for $1.35 to $1.40 here.

 

[RanchMan90]

how much is a 600 lb calf supposed to be worth 'to make a profit? 1,500...2,000...3,000... ??

Right now you get 1.50.. or 900.00

where would you need it to be to 'make money'?

There's a big difference between making money and making a living off cows. $1.50 for a 6 weight is good enough for me. You can buy the best 6 weight steer for $1.35 to $1.40 here.

Volume is the key. And location right?

 

[jedstivers]

It's all a numbers and volume thing.
Most producers don't run anywhere near enough numbers to make a profit at it.
It takes a lot of cattle to turn a profit and you have to be dealing in truckload amounts of almost everything.
Very few producers in the eastern half of the country do that.
I ran numbers till I found the number of calves to make a profit then figured out where I needed to be.
thats also one reason for calves, I don't want that many cows.

 

[Bigfoot]

The 600 pound weaned calf drawing in $900 would be awesome. A 475 pound calf for $700, may be more in line with what the majority of producers see. Have a 5% death loss on calves, keep back 15-20% of your heifers, and your setting on the break even point. Take $30 out of everything for selling, and your knocking on the door.

3 good grass years in a row, has me actually running a few more head, than my place can support. The same fixed cost, should probably be running 70 cows, not 85.

I only post these kinds of things, so that young people know what they are getting in to. Like by hot hard work, at low or no pay, is what the small cowman has to look forward to.

Not sure why any of us do it, including myself. I "think" I managed to save a short bred heifer from anaplasmosis, and I had a 3 month heifer manaGe to drown, in a recent 7.5" rain. You got stuff like that around every corner, plus breakdowns. If it was easy, there'd be cattle on every hillside. I'll always do it. To stop wold be to give up. Perhaps that's why.

 

[Stocker Steve]

Beef is very disorganized compared to integrated white meat. So sell/buy traders make a profit. :cowboy:
Cow/calf is land and forage intensive. So many renters and some low cost forage areas make a profit. Typical make a living operations here rent about half their acres, and pasture land here appraises for about $1450 per acre. Actual price will be higher if it is suited for deer or horses.
Stockering makes a lot some years and can lose a lot other years. So good risk managers, with legume pasture, and a good buying market, make a profit.
Ran some back grounding budgets yesterday. Profit per head was very modest w/o a marketing benefit. Not willing to run huge numbers so I have to work more on the math...

I don't see where making "a profit" is difficult AS LONG AS you keep the investment down. I think making a good living is the challenge. Riding around some scenic acres on horses will not get ur done. Public records show the average producer clears less than $100/cow/year even though we have lower cost land. So get some standardized production data for your area and do the math. Either you need big numbers, or you need more value added.

 

[Farm Fence Solutions]

Beef is heavily subsidized on our place by a fence builder.

 

[Ky cowboy]

Only way I can make it pencil out is by renting. I own 1 1/2 acres where my house is. I have used my own money to get started but that was expected. I don't buy expensive equipment. We are starting to upgrade hay equipment, but we sell a lot of hay. Try to sell enough to make the payments and feed our cows thru winter. We have family land but I get nothing from it. My grandad let's me use his equipment in exchange I do all his work, he cant even start most of his tractors and has never baled the first bale of hay. I do it all. I just can't make it pencil out to buy ground and make cow/calf pay for it.

 

[Stocker Steve]

I just can't make it pencil out to buy ground and make cow/calf pay for it.

How much for hay and pasture ground?

 

[Ky cowboy]

I just can't make it pencil out to buy ground and make cow/calf pay for it.

How much for hay and pasture ground?

Hay ground I pay $1200 a year for about 40 acres of useable ground and 60 of woods that we hunt. Pasture I don't pay, and its around 250 acres. The owner runs some of his cows on there and I supply labor and hay and bull for his and mine but I also get 1/2 of his calfs. I started with no cows and slowly building a herd on the rented pasture. When the owner decides to sell the rest of his cows we will work out a new contract for a straight lease.

 

[Farm Fence Solutions]

People shy away from numbers here, but I'll keep it real for this thread. I run 85 cows, on 260 acres, with one 50 horse power tractor, and a sparse amount of hay equipment. Only because I've owned the place for many years, it's paid for. At the end of the year, I have nothing to show for my trouble, but calluses.

I think it's very important to talk real numbers with young people. Money talk shouldn't be taboo. My dad gave me a better than average start(in knowledge of $, not the actual folding $), but hiding the tough/business parts of an operation from the next generation is no favor.

 

[ddd75]

hoping my sons can making a living with cattle or some type of farming.

 

[Newberry Creek]

I've had cows for 11 years. Most years I lose a little. Some years I lose more than a little. Couple of years I hit a lick and made good money. On balance I come close to breaking even. I love messing with the cows. I would not be able to live this lifestyle (own the farm) if I didn't have the cows. Best thing I've ever done.

 

[bball]

how much is a 600 lb calf supposed to be worth 'to make a profit? 1,500...2,000...3,000... ??

Right now you get 1.50.. or 900.00

where would you need it to be to 'make money'?

Random example here:
Beef prices in Jan 1990 were $78.70. So 600# =$472.20

One US dollar in 1990 had the same buying power as $1.91 today. Almost twice the value or buying power as today.

January 2017 was $119. So 600# = $714.00

So, just to keep up with the beef prices of 1990, Jan beef should have averaged $150.32(not $119) rendering the value of the 600 lber $901.92 instead of $714.00 (again these are Jan 2017 averages, not today's price) That's $187.92 less than the 1990 value of the animal.

Long story short, the beef industry doesn't keep up with the inflation rate of the US dollar..for many reasons.

Even in a record year like 2015, when Jan beef averaged $166, thats only $16 above the 1990 average beef value after inflation is calculated. A record year means a $16 gain from 25 years prior. I'd say things are tilted out of balance.
If my thinking or calculating is wrong, I would appreciate the correction.

Here's one more thing to consider: say we use todays price of $150 and get that $900, we realize that is essentially the same price as 1990 after inflation is figured. Yet you have to cover all your inputs with essentially half the dollars due to the same inflation. Every year that goes by, a beef producer has to do more with less valuable dollars. Does that make sense to anyone?

 

[Stocker Steve]

Every year that goes by, a beef producer has to do more with less valuable dollars. Does that make sense to anyone?

Inflation is a complicated thing. I think the biggest issue with inflation calculations is which index containing what basket of items is used. Most "real" indexes come in higher than the government CPI. It would be interesting to see an inflation index that included farm equipment and land.

Apparently we produce too much beef, or else folks are substituting white meat. Either way - - beef producers have profitability issues just like most other food commodities. Is there any reason to think that will change? I think we are on our own here.

For folks that are not into the marketing arts - - I think some of the work Greg Judy has done is an extreme example of increasing productivity and substituting lower cost inputs.

 

[True Grit Farms]

Every year that goes by, a beef producer has to do more with less valuable dollars. Does that make sense to anyone?

Inflation is a complicated thing. I think the biggest issue with inflation calculations is which index containing what basket of items is used. Most "real" indexes come in higher than the government CPI. It would be interesting to see an inflation index that included farm equipment and land.

Apparently we produce too much beef, or else folks are substituting white meat. Either way - - beef producers have profitability issues just like most other food commodities. Is there any reason to think that will change? I think we are on our own here.

For folks that are not into the marketing arts - - I think some of the work Greg Judy has done is an extreme example of increasing productivity and substituting lower cost inputs.

Imports are killing us, that's what puzzles me about NCBA. Foreign car manufacturers would kill US manufacturers if there wasn't a tariff.

 

[angus9259]

My beef is subsidized by me (day job) and by you (via tax breaks I get on losses to offset taxes on the day job). I appreciate all of you kicking in .

 

[Stocker Steve]

My beef is subsidized by me (day job) and by you (via tax breaks I get on losses to offset taxes on the day job). I appreciate all of you kicking in .

The grain guys have a proven plan - - more CRP and more ethanol. :nod:

Did you are sign up for CRP too?