Making money / Business plan?

[forrest]

First of all I have a full time job and am not looking to necessarily make any money with cattle. I know with my limited acreage it is not feasable. I have cattle because I enjoy it and it is a hobby but it would be nice if I could at least make it pay for itself.

I have the room to run about about 6 pairs, or an equivalent amount of calves, etc. I have other things going on and am lucky to have all kinds of equipment at my disposal, nice tractor with loader, free AI, working pens, livestock trailer, sheds, good fences, water etc.

I am looking for an idea or a plan to do with cattle that could more or less be self supporting. I enjoy working with them, and spending the time is relaxing for me. I just would like for it to pay for it self.

Here are my ideas let me know what you think?
1)Buy 6 yearling heifers, breed them and then raise and sell the calves.
2)Buying 6 pairs with newborn calves and raising them to weaning and sell them then.
3)Buying already bred cows and raising the calves to sell.
4) Combo of 2 & 3 with 3-n-1's
5) What about just buying small calves in the 300lb range and raising them up to 5-600lb and selling them?

I just really don't understand the cattle markets that well and the way the pricing works. I was wondering what a sound strategy would be. Again I am not looking to make a big or really any profit just pay for a hobby.

 

[Caustic Burno]

The best thing to do is find a mentor to come over walk through your operation and get a direction, that is familar with the local markets. Get your infrastucture set up before the first cow set's foot on the place.
Learn to be a grass farmer your not a cowboy. Lots of money chages hands in this business the trick is to try and hold on to a little. The only real control you have is input cost as we buy retail and sale wholesale.

 

[forrest]

Thanks for the reply. I don't have a mentor or anyone to come help or else I probably would not be asking for help on here. I do agree that would be best though. Also as I said this is just a hobby so it is a little harder to try and get someone to come help out with a hobby.

I am not looking for some secret ideas or anything just basic principles. I have searched for hours on this site as well as searching the internet and can't really find what I am looking for.

 

[Anonymous]

With limited acreage(like myself) your best bet may be to buy early breds, calve them and sell them as pairs or even better as 3-1's...bred, calf at side. The key to doing that and making a little profit will be buying the breds at a good price and having minimal input into them. Where are you at and how many acres of grass?

 

[B&M Farms]

I would go with buying bred cows and pairs. If possible, try to buy from a reputable local ranch. If you buy from a sale barn, try and find someone experienced buying cattle to help. Stay away from 1st calf heifers at first. And i think small calves are too high to try to profit from on a small scale operation.

 

[E in PA]

I was sort of in your shoes. If I had it to do over again I would go with option 4. With yearling heifers it would be quite a while until you saw any return at all on your money.

 

[Caustic Burno]

Thanks for the reply. I don't have a mentor or anyone to come help or else I probably would not be asking for help on here. I do agree that would be best though. Also as I said this is just a hobby so it is a little harder to try and get someone to come help out with a hobby.

I am not looking for some secret ideas or anything just basic principles. I have searched for hours on this site as well as searching the internet and can't really find what I am looking for.

The key word is find a mentor. Get off your butt and computer and go introduce yourself to some of the locals.
Tell them you want to learn ask if you can help out, you would be surprised at the help you can get.
This is going to take some effort on your part, asking people what you should do over a computer screen with no idea of location, what your place looks like, or your infrastucture is worthless.
If you want to learn the difference in cow shyt from wild honey put some time and effort into making friends and helping out the local cattleman, it will pay you back tenfold.

 

[shaz]

Got to agree with Burno,
When it came time to design my working pen I help out a local who had a new setup and I learned that his design would be wrong for me because he has help and I don't.
If you have a trailer you may offer to haul for some folks. It would pay you a little and you'd get to see other operations.

 

[Brute 23]

In you position I would go the cow/ calf route. What you buy as far as bred heifers, bred cows, 3 in 1s, just depends on where you find the deal at.

 

[Ruark]

One thing you REALLY need to do is get together with a good CPA with farm and ranch experience. He will be your best friend. If you are operating your farm for profit (even if you just have 3 or 4 head, or if you're leasing it out for $100 a year), you can claim all kinds of tax deductions. Also, the IRS doesn't require you to make a profit for the first few years; they realize it takes time to get a farm or ranch operation started up. It may be several years before you can even bring in any livestock, and some operations go for decades without showing a profit.

You'll need to establish it as a bona fide farm operation. Open a business checking account with a DBA name (e.g. "Oakwood Farms," "Big River Ranch," whatever). Install ranch software on your computer to track your livestock and expenses. Keep ALL receipts and match them to the record in the software. I jot down a number on the corner of the receipt that matches the item number in the record. Make some business cards. Put up a small website for your ranch. Join a cattle raiser's association and put the sign up on your front fence or gate. You get the picture.

I started out pretty naive, thinking we would owe about $16,000 in taxes. My CPA got that down to a $478 refund. A LOT of my capital assets turned out to have depreciation expenses, e.g. a metal building, the farm truck, the fence around the property. ANY expense you have related to the operation of the ranch is deductible.

Just be able to show that it's related to the operation, and have receipts in case of an audit. For example, spraying equipment and chemicals, hand tools, welders, road work, chainsaws, digging out ponds, tractors, diesel fuel and oil, gas/tires/repairs for the farm truck, feed, buildings, wire, etc. Also any costs for maintenance and repair on any of this equipment.

I even deducted some ammunition and calls for hunting coyotes - that's "predator control." Also feed and vet bills for 6 feral cats that live on our property - they control snakes and rodents. If you do any travel related to the ranch operation, e.g. going to a livestock show or seminar, or going out of town to look at some livestock or to buy some equipment, you can count the mileage as a deduction, as well as up to a certain amount on food and lodging expense. Again, the key is keeping good records and a neat, organized receipt file. I tape my receipts into a spiral notebook, one on each page.

Well, you get the picture.

 

[david922]

I bought 5, 350 lb. heifer calves raised them ,bred them,at 16 months old to a borrowed bull.They all calved this year.they keep the pasture clean,and a good tax write off,if I break even I`m ahead because I don`t have to cut the pasture any more,and I love to mess with them as a hobby.Get some and have fun.