Aaron":3aeaf427 said:
Bigfoot":3aeaf427 said:
He potentially started the year with $100,000 worth of calves. He has $80,000 now.
The real question is what did he originally pay for the calves?
If you buy 100k of calves and sell them for 80k a year later and think you never lost money - well that is just a new level of stupid to me.
I think the thought goes like this...
1 -- buy 100 steers for 90,000 and put 10,000 of feed, mineral, hauling, vet bills, and management into them for a total cost of 100,000
2 -- when the calves are at target weight, sell them ... realize 80,000 for the 100 steers
3 -- on the same day, buy 100 more lighter weight steers for 60,000
...so, after this round trip, Dr. Gordon Hazard (who was referenced above) would say he still had 100 steers and has 20,000 in his pocket.
This is how he would say he made a profit.