I am of the mindset of many here that you need to separate the land enterprise from the cattle. Not just for liability reasons, but also as investments, and for tax purposes.
To do this we create a limited partnership that owns the land. The limited partnership pays the taxes on the land and gets to depreciate the barns and bridges. The limited partnerships only liability is taxes and insurance because it paid cash for the land as both an investment and a hedge against inflation. The cattle operation pays rent to the partnership sufficient to cover the taxes and insurance and a very small profit. This reduces the tax liablity of the partnership to zero since it barely makes any money at all. There are no capital gains or any other profits to speak of unless the property is sold. The partnership is a very safe and stable savings account that you get to enjoy whenever you want. Rent is low - set at market - about $7000/yr for 768 acres. Contrary to many beliefs, land is a relatively liquid asset.
Next is the cattle operation. The cattle operation uses equipment that that is also paid for. The cattle operation pays rent to the partnership. The rent is fully deductible as an expense. The cattle were bought with cash and are depreciated. The rest of the expenses of cattle are written off as business expenses as well. Mileage on the vehicles and everything else is expensed against the cattle. A spreadsheet is kept that charges the cattle operation $45/$65/$85 hour to run a tractor for any purpose. Hours are recorded monthly and the cattle must pay the $45/hr on the equipment. That is forced savings for future purchases and needs....if equipment breaks its paid for from that fund, if we need or want something new it comes from that fund. If the cash is not there we dont get it. If it has to be repaired and the cash is not there, its paid back as soon as calves are sold. We have more than 100 head now, and I expect them to bring in enough cash to pay the rent for the land, the $45/hr for the equipment, plus all of their food, fuel, cubes, etc.....This year looks to have about $3-5,000 profit if it rains. Next year should be much higher as another 40 or so heifers come into production.
If you make sure that both operations are profitable you are making money. If you had to make payments on the land you would be in trouble, but I am of the mindset that the land is a good investment even without a steady stream of income. Its just like a crop. When you plant a crop its worth nothing. You don't get paid till harvest. For corn/rice or most other crops that is 1 year, but for pine/hardwood plantations that could be 7,15,and 30 years....For land its as long as you are willing to hold it....its a cheap year over year hedge against inflation that *usually* increase in value. Also the land is constantly being improved to make the ranch a better place. Each new fence/cross fence adds value to the property that is paid for by the cattle. All the road improvements, water wells, drainage that are done are expensed against the cattle yet become assets to the land. When I am old and cant run the cattle any longer the 40+ years of improvements to the land should have added a substantial value to the property which is recouped if you have to sell. Hopefully I get to pass down a piece of property as my family has done.
Personally I have been in the stock market for 11 years. I have 401K, I have IRA's, and I have a small personal trading account that acts like a savings account. If you take the last 11 years and cash everything out today - I have made nothing. I probably have lost, even with all of the dividends and 401K matching.
If you take the last 3 years of cattle and you take all of my expenses, including the purchase of the cattle and equipment I have bought, and you liquidate it all right now, I will have made money. I get no enjoyment or satisfaction out of the paper investments. The cattle on the other hand are great, they force me to exercise, to get me outside out of the city, away from the people who make life stressful....its a huge quality of life improvement, and it keeps me on the move. That is a value that is hard to put a pencil to, but is still valuable.
You may not be able to get rich running cattle, but if you have an off farm job, land/cattle are a fantastic hedge against inflation, and a great low interest savings account. Once the majority of the start up expenses have been paid for - you are left with years of low cost operations. Thats my .02