Making money in cattle!

[kenny thomas]

Some things may be worth borrowing for such as land because it seems the value is always going up.
Cattle looks great right now but inputs still makes it hard to pay interest of 6-7% and make a good profit. If your borrowing for the cattle and operating costs such as feed and fertilizer it might not go well. Especially if you have any bad luck. Never borrow more than you can afford to loose. Don't let it get to the point of effecting you long term.

 

[50/50Farms]

OPM is a drug that people get addicted to, the money dealers want to get you hooked on it to the point that they own you and you become the equivalent of a modern day slave..
If the venture doesn't make good enough sense to use your own money then it's probably not worth doing.

I personally try to always use my own money, and if I don't it's always in small enough amounts that it takes no more than a personal ledger to keep up with, but I do see a lot of folks with an opposite mindset. I'd like to understand it more, but everytime I look into it I can't really get a grasp on it. Like that Robert Kiyosaki fella, I understand it when he talks about how using debt to buy property (rentals and such) and stuff means that you individually won't be the one paying it off, and I understand how in any business using OPM for a product or service you already have a buyer or user for works, but then he gets on about how he basically uses debt like fluid, tax free money. I suppose I just ain't up on my modern day financial "grindset" as the internet folks say.

 

[mwj]

I think the OP money is not as easily available as many on here think it is. Take that plan to buy 500 head because the mkt. is going up, then come back and tell us the results.

 

[Warren Allison]

OPM is a drug that people get addicted to, the money dealers want to get you hooked on it to the point that they own you and you become the equivalent of a modern day slave..
If the venture doesn't make good enough sense to use your own money then it's probably not worth doing.

OPM is "Other People's Money".

 

[kenny thomas]

I think the OP money is not as easily available as many on here think it is. Take that plan to buy 500 head because the mkt. is going up, then come back and tell us the results.

I would suspect that you are correct. With many calves straight off the cow bringing $1,000 500 calves is a lot of spare money for most to come up with or borrow.

 

[J+ Cattle]

OPM is "Other People's Money".

Yes, I understand that. Whether it's a loan or an investor putting up the money it means you're just an employee

 

[mwj]

I would suspect that you are correct. With many calves straight off the cow bringing $1,000 500 calves is a lot of spare money for most to come up with or borrow.

Post #80 mentions 1000 head. I thought that I was being conservative!

 

[kenny thomas]

If your going to finance them you better have a good business plan with quotes on Livestock Risk Protection in hand when you go visit the finance person.

 

[libertygarden]

OPM is easier said than done. If you have the credit and wherewithal it can work, but if you're expecting a banker to extend you $100K in credit for such a gamble just because the market looks good be prepared to be laughed out of the bank. Also, if the market turns, the bank may call your loan or cut your funding. You basically have to be excellent at what you do to be ahead of the game and not get caught with your pants down and for other people to trust you with their money.

 

[mwj]

Just be an order buyer.

 

[Lucky]

I agree that going into debt isn't always good and being debt free is the best option. However I can't imagine how long it would take to build a 100 cow herd without going into debt. Even if you started with 25 and retained heifers to keep from buying it would take forever. You can borrow the money and buy the 100 hd, let them pay for themselves fairly easy in 4-5 yrs then have the 100 hd herd debt free. Everyone needs to do their own thing though. It would have been dang near impossible to get where I am now land, cattle, and equipment wise with zero debt. The cattle and equipment are mine now but the land is another story. I've learned that the bankers honestly don't want the stuff you borrowed money for back and will work with you to keep from things going that far.

 

[wbvs58]

When I was working I felt that a bit of debt kept me honest and turning up every day. Now well and truly retired I am only comfortable with zero debt.

Ken

 

[kenny thomas]

When I was working I felt that a bit of debt kept me honest and turning up every day. Now well and truly retired I am only comfortable with zero debt.

Ken

When I retired was the first time since I was a teenager that I wasn't in debt for something. Just like you I don't even think about going back in debt but I probably would but only for land.

 

[Caustic Burno]

When I retired was the first time since I was a teenager that I wasn't in debt for something. Just like you I don't even think about going back in debt but I probably would but only for land.

Nothing wrong with using someone else's money if yours is making more. Debt is when you can't pay it off anytime you want.

 

[kenny thomas]

Bought 8 bull and steers weighing 382, 1 bull weighing 1085, and a bred heifer today. High calf I paid was 1.92.

Sold the bull and heifer today for 20% profit. Better than keeping them a year. Sold and delivered 7 bulls and steers last night but only 10% profit. But hadn't unloaded them so not bad either.

 

[ClinchValley86]

I personally try to always use my own money, and if I don't it's always in small enough amounts that it takes no more than a personal ledger to keep up with, but I do see a lot of folks with an opposite mindset. I'd like to understand it more, but everytime I look into it I can't really get a grasp on it. Like that Robert Kiyosaki fella, I understand it when he talks about how using debt to buy property (rentals and such) and stuff means that you individually won't be the one paying it off, and I understand how in any business using OPM for a product or service you already have a buyer or user for works, but then he gets on about how he basically uses debt like fluid, tax free money. I suppose I just ain't up on my modern day financial "grindset" as the internet folks say.

I'm with you completely. I don't have a clue what yall even mean by OPM.

And I definitely would like to gain a better understand, if only for conversation sake.

 

[ClinchValley86]

Sold the bull and heifer today for 20% profit. Better than keeping them a year. Sold and delivered 7 bulls and steers last night but only 10% profit. But hadn't unloaded them so not bad either.

That's what I'm talking about. And would like to learn that type of trading. I need to learn which barns are good for what types of cattle. Pretty sure there's money made doing that all the time. Buying here, taking to sale B and making a little. Could really help a weeks income. I'm sure ya lose too.

 

[kenny thomas]

That's what I'm talking about. And would like to learn that type of trading. I need to learn which barns are good for what types of cattle. Pretty sure there's money made doing that all the time. Buying here, taking to sale B and making a little. Could really help a weeks income. I'm sure ya lose too.

I don't trade from one barn to another. Lots of things can go wrong there. I sell from my barn or wean, work, and feed them for 60 days before they see a sale barn again.
Yes different type cattle sell better in different places. I have a load ready to go on a trip as soon as I get time to go.

 

[ClinchValley86]

I don't trade from one barn to another. Lots of things can go wrong there. I sell from my barn or wean, work, and feed them for 60 days before they see a sale barn again.
Yes different type cattle sell better in different places. I have a load ready to go on a trip as soon as I get time to go.

You ever deal with CH catle Co? I have twice. Was happy both times.

I need to learn what sells best at the places around me. Just so I know. I don't rightly have the funds to be trading week to week.

Like the penhookers at Greeneville. They just hoping to run them through the ring and get more than they paid outside or what? Seems like such a gamble. Unless they lowball off the jump. Never dealt w them.

 

[Lucky]

Nothing wrong with using someone else's money if yours is making more. Debt is when you can't pay it off anytime you want.

That's the great thing about cattle.....their liquid....