Making money on cattle

[jcissell]

Only one of the farmers I am talking about farms 8,000 acres. The rest farm from about 1200 to 3500 acres. They don't own their land either, the lease it. You say if your are gonna be poor atleast don't look like it? Well then to me, if you are able to buy those things and spend that money you aren't poor. If they were truly poor they would be driving a truck that is falling apart, living in a normal house, their kids NOT going to whatever university they want and being in a fraternity/sorority that costs them atleast an extra $2,500 a semester, and blowing buttloads of money. I can honestly say I can't think of any farmers here that don't do that. Maybe one if I thought really hard.

I don't think farming is a joke. But farmers can't complain and say they don't make any money. If you spend it all and are broke that means you can't manage money. Not that you didn't make any. Again I'm not saying cattle farmers make this much money. I never said that. But you can always put a pencil to something and make it LOOK like you didn't make any money on paper. There has to be money in cattle or people wouldn't be doing it. People don't just put money into something to see no return. Maybe that's the way it is up there where you guys are but not down here. I bet you guys say I can't run a cow to an acre or acre and a half here too, don't you? Just b/c you can't up there.

Frenchie... I don't know about your market but I watched a small calf go for $2.40/lb and some 300 weight calves go for $1.65 to $1.70/lb at a sale that in general doesn't bring very good prices.

 

[bigbull338]

all farmers big or small are in debt. yes they live in big fine homes drive new truck. kids go to collage, but hers the thing they carry a debt load thats more than you can earn all their life. when they die or sellout they will barely just pay bank off an maybe not pay out .so now then you tell me where all their money is. they do them things till they die . scott

 

[dun]

If there was really big bucks in the cattle business , lawyers and doctors wouldn;t be investing as tax shelters.
The last couple of years the calf prices have been high but you can;t judge from those few years. You need to look at the history. Some years there is very good money to be made, others much less profit and in some you get losses.
In the fat years you buy the extras that you couldn;t buy in the lean years.
This year looked at calving time like it was going to be one of those very fat years. Drought has a tendency to knock that idea in the butt. But the good years are coming again, but the really bad ones are too.
It;s a long term business. We figure on a $100 profit per cow average over the years. An extra calf or two dies before weaning or you have to feed hay, hail sotrm damage, equipment goes completely foobar and it lowers that number.

dun

 

[bigbull338]

well said dun. your so right we have no cushion to fall back on in the lean yrs. b/c we have to contstantly catch things up when the cash is there. or dare say barrow the money when needed. scott

 

[flaboy]

If there was really big bucks in the cattle business , lawyers and doctors wouldn;t be investing as tax shelters.
dun

Hey Dun I just gotta say that is one ugly picture in your Avitar. :lol:

 

[jcissell]

Dun I didn't say "big bucks" in the cattle business. I'm just saying you can make a pretty descent living with cattle. When I say farmers making a lot of money I am talking about row crops. You can tell when you are in row crop country or cattle country b/c in row crop country all the farmers have nice trucks and so on... In cattle country you see a lot more "older" trucks and what not.

Bigbull my dad's businesses use to do 2.5 million a year. He would sell a load of gas every 2 to 3 days. That was $15,000 a load. I know about moving large sums of cash.

Anyway.... no need to keep arguing. Everyone has their own opinion and everyone no matter how much money or things they have think they are broke b/c the more they make the more they spend.

 

[SF]

jcissell; My dog has already been in this fight, so I'm not going to cover all that ground again. Just a note. I agree with many of the points you brought up.

 

[Greenhorn]

I keep seeing the figure of $100 per head profit. Is this just a survey people are quoting or is this an actual figure from your ranch that you have documented? Has anyone ever closely recorded the expenses of their herd, i.e. how much each head cost and how much profit they made? If so would you share this info? I would be most interested in an actual case study of how it works on your ranch, not "it should cost about "X" for feed per head per year, and about "X" for vet etc.).

-Greenhorn

 

[bigbull338]

the only way your really gonna know is deduct expenses from calf sales an see. i have a feeling alot will go in the hole. scott

 

[Caustic Burno]

I keep seeing the figure of $100 per head profit. Is this just a survey people are quoting or is this an actual figure from your ranch that you have documented? Has anyone ever closely recorded the expenses of their herd, i.e. how much each head cost and how much profit they made? If so would you share this info? I would be most interested in an actual case study of how it works on your ranch, not "it should cost about "X" for feed per head per year, and about "X" for vet etc.).

-Greenhorn

You bet I keep records to a knats ass. I actually make 125-150 a head profit. But why would you think someone is going to post a P&L satatement to the world ,my ROCE is my business. That is considered rude in my neck of the woods to ask what your neighbor spent on anything. To many rookies don't add all the cost so they can talk big at the feed store. The funny thing is the cattlemen know they are lying.

 

[Bama]

Raising cattle is kinda like the stay at home mom. Some people look at it like she doesn't do anything all day. She don't punch a clock or answer to a boss. She has the easy life. Now put yourself in her shoes. There are more chores to do around the house that she does that nobody even notices. She cooks all the meals and takes care of everthing from runny noses to cleaning dishes. Ask her what she does with her free time during the day. She does a lot that goes unseen by the masses. Cattle farming is a lot like that. There are a lot of things that have to be taken care of that some folks just take for granted.

 

[msscamp]

I keep seeing the figure of $100 per head profit. Is this just a survey people are quoting or is this an actual figure from your ranch that you have documented? Has anyone ever closely recorded the expenses of their herd, i.e. how much each head cost and how much profit they made? If so would you share this info? I would be most interested in an actual case study of how it works on your ranch, not "it should cost about "X" for feed per head per year, and about "X" for vet etc.).

-Greenhorn

Even if someone were willing to do that, which I seriously doubt, it wouldn't prove anything. There are no givens in the cattle business. We are not conducting controlled 'case studies' in a lab! Feed prices fluctuate, as do hay prices. Just because hay was going for 80/ton last summer doesn't mean it will be going for that this summer. There is no way to know how much rain you are going to get or how bad the winter is going to be or how hot the summer will be or how many calves are going to get sick or what equipment is going to break down - or just maybe die altogether and have to be replaced, or what all is going to go wrong. When I was growing up, we bought alfalfa hay that was then ground for feed. Unknown to us, the hay had moldy sweet clover in it. Moldy sweet clover fed to pregnant cows at the wrong times interferes with the development of the clotting ability in the calves. We had these big, beautiful several month old calves dropping dead all over the place. How are you going to work that into your management plan? It took us several years to recover from that disaster. THERE ARE NO GUARANTEES IN THIS BUSINESS! NONE!

 

[Beefy]

Raising cattle is kinda like the stay at home mom. Some people look at it like she doesn't do anything all day. She don't punch a clock or answer to a boss. She has the easy life. Now put yourself in her shoes. There are more chores to do around the house that she does that nobody even notices. She cooks all the meals and takes care of everthing from runny noses to cleaning dishes. Ask her what she does with her free time during the day. She does a lot that goes unseen by the masses. Cattle farming is a lot like that. There are a lot of things that have to be taken care of that some folks just take for granted.

Bama you and i think a lot alike. scary for you.

 

[Bama]

We may think alike but I think we have both been it this business long enough to know just what it takes to make a silk purse from a sows ear, or a T bone from a day old calf. It don't just happen.

 

[Chuck]

I keep seeing the figure of $100 per head profit. Is this just a survey people are quoting or is this an actual figure from your ranch that you have documented? Has anyone ever closely recorded the expenses of their herd, i.e. how much each head cost and how much profit they made? If so would you share this info? I would be most interested in an actual case study of how it works on your ranch, not "it should cost about "X" for feed per head per year, and about "X" for vet etc.).

-Greenhorn

Greenhorn- Do a search on the web for FBFM records. This is the Farm Business Farm Management record keeping system, usually run through the land grant universities, where farmers and ranchers from a large part of the U.S. keep careful records that are then used to compile state and national averages for high, medium and low profit operations. There is a lot of crop stuff there, but livestock is included also. I'm pretty sure I have seen the summaries posted on the web. It can be quite a shock for some to see the results when all the costs are included. Just as a personal observation, I've always kind of thought there was a good chance the results were skewed a little bit, because the best operators tend to keep better records. If you know where you are, you have a better chance of getting where you want to be. I hope this helps you.

 

[frenchie]

Only one of the farmers I am talking about farms 8,000 acres. The rest farm from about 1200 to 3500 acres. They don't own their land either, the lease it. You say if your are gonna be poor atleast don't look like it? Well then to me, if you are able to buy those things and spend that money you aren't poor. If they were truly poor they would be driving a truck that is falling apart, living in a normal house, their kids NOT going to whatever university they want and being in a fraternity/sorority that costs them atleast an extra $2,500 a semester, and blowing buttloads of money. I can honestly say I can't think of any farmers here that don't do that. Maybe one if I thought really hard. .

Do you honestly think they paid cash for everything.Or that they are not in debt up to their butts.They are just keeping up to the Jones.

Maybe that's the way it is up there where you guys are but not down here. I bet you guys say I can't run a cow to an acre or acre and a half here too, don't you? Just b/c you can't up there..

I would never say that, because I have land that I can run a pair to the acre on if I wanted to use it that way.However I chose to use it for hay instead.I run my cows on the poorest land, some of which takes 30 or more acres to a cow.

Frenchie... I don't know about your market but I watched a small calf go for $2.40/lb and some 300 weight calves go for $1.65 to $1.70/lb at a sale that in general doesn't bring very good prices.

I have been at this a long time .I have seen those high prices too.But they are like a bubble eventually they burst.

Those calves would likely currently sell for around 30- 40 cents U.S here.Less if they are dairy.

Can you imagine waking up one day and having no auction barn open to sell your stock from May till Oct for a 500 mile radius from your doorstep..On top of that be in the middle of a drought and forced to buy hay

My position in 2003.

Don,t think it can happen..It can

 

[dun]

You bet I keep records to a knats ass. I actually make 125-150 a head profit. But why would you think someone is going to post a P&L satatement to the world ,my ROCE is my business. That is considered rude in my neck of the woods to ask what your neighbor spent on anything. To many rookies don't add all the cost so they can talk big at the feed store. The funny thing is the cattlemen know they are lying.

If I can ever get to the point that I quit buying broken down farms and fixing them up I think our profit margin will increase. I must enjoy fixing and improving, as soon as I get a place fixed up so that there isn;t any serious work to getting it whipped into shape I sell and buy another place that needs fixing.

dun

 

[icandoit]

dun wrote:

If I can ever get to the point that I quit buying broken down farms and fixing them up I think our profit margin will increase. I must enjoy fixing and improving, as soon as I get a place fixed up so that there isn;t any serious work to getting it whipped into shape I sell and buy another place that needs fixing.

dun

Now that's what I call a glutton for punishment.

Dick

 

[dun]

dun wrote:

If I can ever get to the point that I quit buying broken down farms and fixing them up I think our profit margin will increase. I must enjoy fixing and improving, as soon as I get a place fixed up so that there isn;t any serious work to getting it whipped into shape I sell and buy another place that needs fixing.

dun

Now that's what I call a glutton for punishment.

Dick

My wife just calls it stupid!

dun

 

[SF]

If I can ever get to the point that I quit buying broken down farms and fixing them up I think our profit margin will increase. I must enjoy fixing and improving, as soon as I get a place fixed up so that there isn;t any serious work to getting it whipped into shape I sell and buy another place that needs fixing.

dun

A man making money. Called Profit. Know lots of folks around here that do that. Many do very well. They get to do what they love and make money doing it. What more can one ask for from life?