Just want to break even

[Askme42]

Hey guys and gals. First post here. I've been lurking a lot for a few months.


Here's the deal I'm getting ready to close on about 300 acres. 200 of that is pasture. My grandpa ran a cattle farm on it for close to 50 years. While the pastures have been kept up just about everything else fences buildings ect are due for a facelift. I feel I'm getting no pretty good deal on the land and my payment will be just a hair over 2k a month. The wife and I both have good jobs making the payment isn't a problem just ideally I'd like to make the land pay for itself.


I feel like giving myself a 5 year time frame to make this happen is pretty reasonable. I realize cattle prices can go anywhere and that effects a lot but am I being fairly realistic here?

 

[cow pollinater]

That's going to depend on where you're located. Stocking rate will vary greatly from area to area.

 

[Askme42]

I think I can pretty easily run 60-70 pairs on the land. I have access to a decent number of other places to make hay if I needed to push that number higher.


Extreme southern Illinois is my location.

 

[dun]

That's going to depend on where you're located. Stocking rate will vary greatly from area to area.

That may have been a polite way of asking where you are located

 

[Askme42]

That's going to depend on where you're located. Stocking rate will vary greatly from area to area.

That may have been a polite way of asking where you are located

Yeah sorry about that. I've read enough on here that I should of included that info.

 

[True Grit Farms]

Your getting in the cow business at right time. Any of them whopper bucks there?

 

[Askme42]

Your getting in the cow business at right time. Any of them whopper bucks there?

I know prices have dropped some and I probably won't be actually buying in for another year. Maybe two depending where the market heads. Watching prices this past summer there was no way i was buying in with the market topped out like that.


There's a nice 12 pointer that's been roaming the property for a few years. Not any true monsters though.

 

[Caustic Burno]

It is all about input cost. Mostly about being honest with the numbers on the true upkeep cost of a cow.
Your land note will be 25 calves a year or more if prices continue to fall.
We buy retail sale wholesale.
Seen many a man land rich and dirt poor.

 

[JMJ Farms]

If you could take 70 cows and average $200 per calf profit and a 90% weaning rate... 63 calves x $200 = $12600. That's half your payment. You may be able to double that. ? Depends on your projected inputs and calf prices.

 

[Caustic Burno]

If you could take 70 cows and average $200 per calf profit and a 90% weaning rate... 63 calves x $200 = $12600. That's half your payment. You may be able to double that. ? Depends on your projected inputs and calf prices.

Not to rain on his parade I figured he would be 15 to 20 K in the hole until the land was paid off.

 

[JMJ Farms]

If you could take 70 cows and average $200 per calf profit and a 90% weaning rate... 63 calves x $200 = $12600. That's half your payment. You may be able to double that. ? Depends on your projected inputs and calf prices.

Not to rain on his parade I figured he would be 15 to 20 K in the hole until the land was paid off.

If you figure in taxes, upkeep, maintenance, insurance, purchase costs for cattle, and labor I'm quite sure that would be the case CB.

I'm not trying to discourage you at all askme. But I do want to be truthful. My advice would be that if you can swing it financially, and it's what you want to do, then go for it and enjoy it while looking at the whole venture as a long term investment. I wish you the best.

While the cattle business may not be the best place to make a dollar, if it's something you enjoy as a hobby, then..... It's worth a lot if it "knocks your tractor out of gear" for a little while.

 

[Askme42]

If you could take 70 cows and average $200 per calf profit and a 90% weaning rate... 63 calves x $200 = $12600. That's half your payment. You may be able to double that. ? Depends on your projected inputs and calf prices.

Not to rain on his parade I figured he would be 15 to 20 K in the hole until the land was paid off.

Not raining on any parade. Was just a hope of mine. Like I said the payment won't be a problem at all if we didn't make a dime other than why we make now. So it's not like I'm depending on this to make it work. Thanks for the input though.

 

[Toad]

What you have to remember is that the land value is part of your profit. If you can come anywhere close to breaking even and end up with 300 acres free and clear thats a pretty good amount of money. Best of luck and I think you can do it if you are careful.

 

[Askme42]

What you have to remember is that the land value is part of your profit. If you can come anywhere close to breaking even and end up with 300 acres free and clear thats a pretty good amount of money. Best of luck and I think you can do it if you are careful.

Yeah I mean that was kind of my hope was get to where I'm breaking even on this land and then buy a little more and so on and so on. Maybe not be putting any actual money in my pocket but certainly increasing my net worth a good amount.

 

[Askme42]

Maybe someone that knows the southern Illinois area a little better could give you a better stock rate but if I had to guess 2:1 isn't really uncommon around here. That would put me at 100 pairs but then I'm probably going be looking for hay from somewhere else. Anyone want to take a guess how many acres I would need for hay production for 100 pairs?


I've got access to about 50 acres within 5 miles that I could make hay off of and if I stretched it out to 15 miles I could double that to 100 acres.

 

[Son of Butch]

I've got access to about 50 acres within 5 miles that I could make hay off of and if I stretched it out to 15 miles I could double that to 100 acres.

Making hay can be challenging, even more so when working full time off the farm.
Perhaps, as you start out, buying hay as needed would be best to help manage both your time and cash flow.
Since "Askme" is your name...
What do you currently have for equipment?
Purchasing the land and cattle is a sizable investment. If equipment needs to be purchased too, it all adds up real fast.
Is renting the land and pasture out for the first year or two an option?
It would at least generate some revenue while buying some time to get your feet under yourself as you get up and going.

 

[wbvs58]

With the run down fences don't rush into replacing them. It is surprising how they will strain up again. If you cut out the rotted wooden posts and replace them with some steel pickets the fences will come up good.
Ken

 

[Askme42]

I've got access to about 50 acres within 5 miles that I could make hay off of and if I stretched it out to 15 miles I could double that to 100 acres.

Making hay can be challenging, even more so when working full time off the farm.
Perhaps, as you start out, buying hay as needed would be best to help manage both your time and cash flow.
Since "Askme" is your name...
What do you currently have for equipment?
Purchasing the land and cattle is a sizable investment. If equipment needs to be purchased too, it all adds up real fast.
Is renting the land and pasture out for the first year or two an option?
It would at least generate some revenue while buying some time to get your feet under yourself as you get up and going.

The land comes with an international 574 and John Deere 1010. It also comes with a baler but I don't think either will pull the baler. I do have some family that's in the business that I'm sure would either help me out or let me use their equipment for nothing more than fuel consumed.


Keep the questions coming. I'm glad to answer.

 

[Caustic Burno]

You better be a Jack of all trades as well having to pay for repairs everytime something that breaks down on the
farm adds up fast.
Secondly a hay baler can make a preacher cuss and it only breaks down in the hay field with rain coming.

 

[Brute 23]

Not saying it can't be done. In reality, if your cattle are paying for themselves and the upkeep of the property... maybe even paying to replace some fence and such... you will be doing good.

IF you are able to apply any thing to the payment it will be minimal and probably at the expense of some thing else that needed to be done.

Make a prioritized budget every year and always spend this years money next year... not this years money last year.

In 5 yrs you can have a really nice property and operation going if you can keep it simple. Don't get hung up on $10K calf tables and hay equipment. Just keep it simple.