Is it worth it financially?

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herofan

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I know we've got the thread about whether one could make a living, but I'd like to give my specific situation and get comments. I have no intentions of getting rich or even making a living with cattle; I already have a good job. But I have had changes in my life and would like to get into some cattle for enjoyment and supplemental income. I think it could eventually be profitable, but there are mixed opinions from friends.

I have 130 acres paid for and half is in pasture. I would like to build a cow/calf operation with beef cattle. I am currently buying calves from 4 to 6 months old averaging $300 each to raise as the mothers. I would eventually like to have a herd of 20 cows. I feel 20 would be manageable both for me and the land. No money will be borrowed. I believe I can have around 140 rolls of hay from my farm, but I don't have the equipment for hay, like mowers and rollers. So, I rely one others to manage the hay for a portion of it as payment. I will probably have to buy some hay.

I live in KY, so we don't usually have extreme summers and winters like I hear about in other places. Does this sound like I could make a profit in a few years? I say yes, but there are always those who say, "You can't make anything fooling with cattle." That always makes me wonder, though, why they have done it for 30 years.
 
A

Anonymous

If there wasnt any money in cattle no one would be doing it for a living.
Hard part is doing it in a profitable way. The more you do yourself and can use your land for the better you will be. Keep your inputs low by growing the best forage you can and stocking low enough that you can stockpile some standing grass and hay for winter.
Grow some winter pasture grasses.
And most of all have fun because if you dont enjoy it it isnt worth it.
 

bigbull338

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since you have a fulltime job yes you can breakeven in cattle.because the cattle should pay all or part of their upkeep.you can also pay some1 to bale your hay an keep it all,insted of doing it on shares an risking running short.
 

cross_7

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i'll give you my honest opinion and i may be right or may be wrong.
you and i have a similar situation so i can relate to some of what you are saying
your land is paid for or your not expecting the cattle to pay for it so that is not a factor on your bottom line i assume.
from what i understand your in it more as a hobby but like everything else you'd like to make a dollar.
your not borrowing any money so your one step a head but the problem is the return on your investment.
you may want to look at your current roi vs your interest to borrow.
with cattle your roi is not going to be much once you figure all the start up cost, maintenance, death loss, hay/baleing cost and so on, but i don't know of anything else thats paying a greater return.
once you get started and are getting a regular calf crop then you are able to repay yourself the money invested, you can make a little money.
your way of buying calves is going to be slow and it's going to be a while before you sell your first calf crop.
now if you go out and buy a nice set for young cows you'll see a return sooner but it's going to cost a lot more upfront, but it may save you money in the long run.
in short yes you can make some money but it's a slow process, there are lots of disadvantages, the works hard, things always seem to go wrong when the weather is at it's worst, your tied down more unless you have someone to look after things while your gone, equipment cost and general upkeep is never ending and so on , but i wouldn't have it any other way.
one more thing
you'll need a good cpa or the tax man will take of the few dollars you do make
 
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herofan

herofan

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cross_7":2jtya4lt said:
i'll give you my honest opinion and i may be right or may be wrong.
you and i have a similar situation so i can relate to some of what you are saying
your land is paid for or your not expecting the cattle to pay for it so that is not a factor on your bottom line i assume.
from what i understand your in it more as a hobby but like everything else you'd like to make a dollar.
your not borrowing any money so your one step a head but the problem is the return on your investment.
you may want to look at your current roi vs your interest to borrow.
with cattle your roi is not going to be much once you figure all the start up cost, maintenance, death loss, hay/baleing cost and so on, but i don't know of anything else thats paying a greater return.
once you get started and are getting a regular calf crop then you are able to repay yourself the money invested, you can make a little money.
your way of buying calves is going to be slow and it's going to be a while before you sell your first calf crop.
now if you go out and buy a nice set for young cows you'll see a return sooner but it's going to cost a lot more upfront, but it may save you money in the long run.
in short yes you can make some money but it's a slow process, there are lots of disadvantages, the works hard, things always seem to go wrong when the weather is at it's worst, your tied down more unless you have someone to look after things while your gone, equipment cost and general upkeep is never ending and so on , but i wouldn't have it any other way.
one more thing
you'll need a good cpa or the tax man will take of the few dollars you do make

Your comments are reassuring. Your comments are about what i was thinking. It's like a friend told me, "you don't have a cow/calf operation overnight." That is so true. I'm in my 40s and regret not having started this 20 years ago.
 

cross_7

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Your comments are reassuring. Your comments are about what i was thinking. It's like a friend told me, "you don't have a cow/calf operation overnight." That is so true. I'm in my 40s and regret not having started this 20 years ago

i'm right there with you, but i did start with cattle 20 yrs ago and i lost more than i made and was forced to get a job to support my cattle addiction.
thankfully i was able to get a good job and raise a family, but now i'm not looking to get rich, i just want to get up every morning and play cowboy. :cowboy:
 

wbvs58

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I have a similiar situation to what you are proposing, but in another country. All of what I make from the cattle plus a bit more goes back into the property, I don't care, I am making improvements all the time, carrying capacity goes up, maybe value goes up, but most importantly I enjoy what I do. I am retired from my previous work, I am now a farmer in that I do everything a farmer does every day, but I don't have the financial worries of a farmer as I have an independant income and owe nothing. One day if I stop spending money on improvements, yes I will make a small profit, but I don't want to stop spending.
The good thing about the money from sale of the calves is that it comes in one lump sum when calves are sold in autumn, it is then spent slowly throughout the year, you think you are rich for a while.
One other thing though, it takes a while to build up a good herd of cows, to get a tight calving, to have a good attractive pen of uniform calves, to get the better money for them. Any shortcut to get to this point, I think I would take. Breeding up from young heifer calves to establish the herd, as Cross suggested would be a bit slow, great for adding and fine tuning the herd once you have a solid nucleus cow herd.
Ken
 

houstoncutter

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at present, I would say , no......Imputs have just gotten too high...Here in Texas, as I am sure in other places, its just a way to keep your ag exemption.
 

Angus Cowman

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with no more acres than you have
you would be better off buying your hay and using your ground for pasture which will more than likely be cheaper in the long term as you can buy your hay 7 out of 10yrs cheaper than you can raise it plus with the increase in pasture you should be able to get by with less hay
if you can break your land up into smaller pastures and rotate them your grass will last longer and with you being in Kentucky by stockpiling fescue in the fall some yrs you may not have to feed any hay at all
now bac to yoru original question yes with 20 cows you should be able to make enough off of them to let them pay for themselves and the improvements on your property if you go about things in a conservative manner
I don't beleive tho that you can get by raising your cows from calves any cheaper than you can by buying cows and having a return from them in a shorter time period
 

Caustic Burno

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You can make money on one cow lady at church does. Has an old jersy and raises four five calf's a year off her.

IMO as long as you don't forget your a grass farmer and don't get caught in I am a cowboy you can make money with a few head. Let me rephrase that you can make them pay their way with a little left over. Here it takes roughly 500 dollars a year to upkeep ole belle.
 

1982vett

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herofan":2cjj5vld said:
I know we've got the thread about whether one could make a living, but I'd like to give my specific situation and get comments. I have no intentions of getting rich or even making a living with cattle; I already have a good job. But I have had changes in my life and would like to get into some cattle for enjoyment and supplemental income. I think it could eventually be profitable, but there are mixed opinions from friends.

I have 130 acres paid for and half is in pasture. I would like to build a cow/calf operation with beef cattle. I am currently buying calves from 4 to 6 months old averaging $300 each to raise as the mothers. I would eventually like to have a herd of 20 cows. I feel 20 would be manageable both for me and the land. No money will be borrowed. I believe I can have around 140 rolls of hay from my farm, but I don't have the equipment for hay, like mowers and rollers. So, I rely one others to manage the hay for a portion of it as payment. I will probably have to buy some hay.

I live in KY, so we don't usually have extreme summers and winters like I hear about in other places. Does this sound like I could make a profit in a few years? I say yes, but there are always those who say, "You can't make anything fooling with cattle." That always makes me wonder, though, why they have done it for 30 years.
Personaly.......I'd want to start with a better quality calf than what you are picking up for 300.......
 

ddg1263

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Well look at it this way.... You say you want 20 cows plus a bull..... Many people will get an 80% conception rate. So you will have about 16 calves a year. You may do better some years, but just keeping you on the conservative side. Now from what I can tell your average sale will be about 700 per head. Now that is 11,200 dollars for a years work of keeping cattle on your farm. Can you keep 21 head of cattle for that?

If it takes 400 per head to keep your cattle, you will have 8400 in hard cost in feed and hay. So doing the math you will have 2800 left over to cover cost overruns that always happen.

I will say this, you will not hire anyone who will work as hard as you have to for 2800 per year to care for your cattle. Now this is at 400 a head. If it costs 500 a head your margins shrink even more. I would find a friend who has a herd and just help him play with his cattle if I were running 20 head.
 

ddg1263

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One way you might be able to play with some cattle is just buy a few calves and a way to house bulk feed. Buy you a few steers and feed them out. Kill a couple for you and your family and try and sale the rest. You will make decent money on not having to buy beef from the store and it tastes great. You could probably make just as much from a few steers as you could with 20 cows.....and you have a limited number of acres to start with to graze.
 

Stocker Steve

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herofan":8vyqq0fh said:
I live in KY, so we don't usually have extreme summers and winters like I hear about in other places. Does this sound like I could make a profit in a few years? I say yes, but there are always those who say, "You can't make anything fooling with cattle." That always makes me wonder, though, why they have done it for 30 years.

"with cattle" is too vague.

You need to run some numbers on stockers vs. cow/calf vs. freezer beef...
 
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herofan

herofan

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For those who don't seem to think that the amount of profit is worth it, why do so many people deal in cattle. It seems like every field in my neck of the woods is full of beef cattle doing a cow/calf operation. A lady told me today that she recently had a $2000 vet bill, but didn't act as though it were a big deal.

As with anything, isn't there a difference between textbook and practical, real-life practices? For example, I remember my grandfather used to keep out a yellow salt block for his cows. I noticed today that there are several different colors and kinds. I checked the web for information, but I didn't get a simple answer. It seemed like taking a science course just to figure out which mineral block was needed. Is it really that complicated?

Another thing is hay. I don't know too many farmers around here who put a lot of money into their hay fields. As one farmer put it, "I just mow whatever is there." That usually includes a lot of fescue. I've recently read where fescue doesn't get high marks compared to other hays, but I don't see any undernourished cows around here.
 

ddg1263

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Hero, I don't want to be totally negative, but I think you brought up an interesting point in your thread. You said that you knew a lady that had a vet bill of $2000. I bet you many of seasoned cattle ranchers would never spend that on their herd if it was not a really important animal. Some people will even shoot a sick animal if they can't save it themselves. Obviously some pure breeders have greater budgets than the commercial guys. Also some rich people that own land use it for a tax write off. And then you have the row croppers who use some of their by products for feed and unfarmable land for grazing pastures... It fits really well with those guys. However, if you are a guy just starting out with nothing, it will be an uphill climb for a number of years. The market is good right now, but I would hate to step out there and pay some of these premiums of what cattle is costing now. People paying over 120 for a bale of hay is just hard to imagine. I think one of the big reasons the cattle numbers are decreasing so is that people are in a tight all over America now, and they do not have the play money they use to have so their sell their herds to cut back on expenses. The drought has magnified the decrease in cattle numbers so now we are seeing a jump in cattle prices. However, I bet you in a few months someone on wall street will send out a memo how south America is producing an excess amount of cattle now and all the profit we think we have will be evaporated. This market may hold for a while because there is a true shortage of beef, but only time will tell.

All I can do is to suggest what you should look out for and to not be over expecting your herd to produce you a lot of money. If it is a sideline job then you will be just fine.I love spending time with my cattle, but the only way you can get me to spend 2000 dollars on a vet bill is if she is a really good looking vet that needs the work!
 
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herofan

herofan

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ddg1263":3udwtwoi said:
All I can do is to suggest what you should look out for and to not be over expecting your herd to produce you a lot of money. If it is a sideline job then you will be just fine.I love spending time with my cattle, but the only way you can get me to spend 2000 dollars on a vet bill is if she is a really good looking vet that needs the work!

Yes, it is just a sideline for me. I have a good job and have 130 acres just sitting here, so i thought, why not put a few cows on it. My brother had cows on it until about 10 years ago, so we thought we would try again. I'm not expecting to get rich, but if it produces a few "extra" bucks, that will be great. Also, I'm not going to go wild and start buying a bunch of new equipment and getting everything fancy.
 

Ruark

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Another approach, given your situation, is to lease your land for grazing. Have somebody pay you some amount to graze their cattle there. Then you don't have to worry about hauling them around, medical care, etc. As part of the charge, you could have him slaughter 1 or 2 head for your consumption. If you charge him for the lease, then you can claim your property as a farm operation and there are all kinds of things that become tax deductible: fencing, roads, equipment, tools, depreciation, you'll be surprised. This is something to discuss with a good CPA with farm and ranch experience. One issue, however, is to not let somebody put too many on there and overgraze it.
 

highgrit

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Sometimes I think we should of set the place out in pine trees. But nothing beats getting up in the morning and ckecking on the cows. I enjoy my cows, but you sure don't make much on them. I did cut my hay back to 2 rolls this year per cow. You may be able to stock pile grass better than me, I have coastal bermuda and tiff 9 bahia grass pastures and they don't hold up for me.
Here's the way I figure it per cow.

3 rolls of hay per yr. 150.00
1 bag high mag mineral 15.00
feed, wormer, insurance 100.00
mis. expenses 50.00
fertilizer & lime 100.00
 

Caustic Burno

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highgrit":3pshxvar said:
Sometimes I think we should of set the place out in pine trees. But nothing beats getting up in the morning and ckecking on the cows. I enjoy my cows, but you sure don't make much on them. I did cut my hay back to 2 rolls this year per cow. You may be able to stock pile grass better than me, I have coastal bermuda and tiff 9 bahia grass pastures and they don't hold up for me.
Here's the way I figure it per cow.

3 rolls of hay per yr. 150.00
1 bag high mag mineral 15.00
feed, wormer, insurance 100.00
mis. expenses 50.00
fertilizer & lime 100.00

Your numbers look pretty well inline with mine in a normal non drought year. My numbers should come down this year with some rainfall as I have destocked and had plenty of grass in normal years. Went from 37 head momma cows to 11.
Figure I will hold at about 15 from now on. Neighbor dropped down to 50 head on 400 acres said that is where he is staying not going to fight it anymore. On the upside cattle prices are finally catching up with input prices they have been lagging behind.
 
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