Most farms must be larger to support today's farm families

[dcara]

Article from Drovers provide info on the question of "how many cows do I need" which alot of newbies ask.
http://www.drovers.com/news_editorial.a ... ed_id=4776

 

[Brandonm22]

"If a farm family plants a 50/50 corn and soybean rotation, they would need approximately 464 acres of corn and 464 acres of soybeans- -- a total of 928 acres to earn the family living amount of $74,804.

For other farm enterprises, it would take 127 dairy cows, 10,717 head of hogs from weaning to finish, or 948 head of beef cows in a beef cow/calf operation."

By my math they are only clearing $78.91 per beef mama cow to come up with that number. That seems a bit low for that economy of scale. 948 cows at an 88% weaning percentage ought to be grossing over $500,000 a year in this market just selling feeder calves and culls.

 

[SFFarms]

That's kind of depressing for me, it kind of makes one wonder how in the future farms will survive? I know in my parts land is around 3500-4000+ an acre and there is no way ill be able to buy 250+ acre to make a income farming. I know other people my age will wonder why would they farm when they can get a city job and make twice that. I wonder who will be future farmers? Kind of points to farming becoming an industry in the future. :? Most large family farms cant hold market up if the smaller farms like me keep dispersing. It seems farming for the small operation is pointless in the future. I just hope somehow the tides will turn and it will be differnt for me in the future but i just cant see it happening. :frowns: :|

 

[Busterz]

Those numbers (the 5 yr avg return) varied quite a bit within the one state (Minnesota). I also wonder if the costs are higher there due to the harsher and longer winters. The cow numbers required sounded a little high to me.

But it doesn't change the notion that operations will continue to get bigger. I don't think it will totally run all of the small farms out though but the small farms will have to find a different set of economics to operate under than the larger traditional operations. Niche farming or producing animals or crops worth more than the traditional commodity open market.

Don't quit your day job.

 

[ToddFarmsInc]

I see I'm not the only one to read the Drovers. Ya, I printed up that article to contemplate it later on.

I can see from that report that I'm not spending nearly enough money each year on myself. :roll:

 

[nap]

Those are the most depressing numbers I've seen in a long time. I've read the article but I wish I knew a little more about the methodology they used to arrive at the numbers.

 

[bigbull338]

i know the writer of that artical has never milked cows.the days of making big money on a 110 dairy are long gone.now days its a 400 cow dairy.

 

[milkmaid]

Keep in mind that the more critters/crops you have the more employees you need to pay.

I've seen folks do very well with only 60 cows... management makes a big difference as to how many animals/crops are needed to make a living.

 

[skyline]

So, let's do the math... If a family wanted to buy a commercial beef cattle ranch and start from scratch with the intention of it being their sole source of income.

Land 2000 acres minimum at $2000 per acre minimum = $4,000,000 or more.
Cattle 1000 head at $1,000 minimum = $1,000,000 or more.
Miscellaneous equipment, barns, facilities, etc... = $500,000

So for a smooth $5,000,000 to $6,000,000 you can get started in the cattle business on a scale that is large enough to support your family.

Debt payment on $6 million is roughly $46,000 per month, give or take (7%, 20 years). $552,000 per year.

So, assume you have a 100% calf crop (you won't) and you sell all your calves for $500 each. Your annual gross income is about $500,000. Nothing left for operating expenses such as feed, diesel, etc... And double nothing left to feed and house your family with.

That folks is flat out depressing. If you don't own the land outright or have a spare $5 or $6 million laying around with nothing to do, you are out of luck.

 

[Red Bull Breeder]

I think i could get by on a little less than them folks. But i am kinda low maintenace.

 

[Bluestem]

What they are trying to tell you is the commodity market is broken. Its time to start thinking outside the box.
OR
This is an expensive hobby.

 

[IluvABbeef]

What they are trying to tell you is the commodity market is broken. Its time to start thinking outside the box.
OR
This is an expensive hobby.

OR both.

I like what milkmaid said: Management is key to success, no matter how big a herd you got.

 

[ToddFarmsInc]

...
I've seen folks do very well with only 60 cows... management makes a big difference as to how many animals/crops are needed to make a living.

And it all depends on what level of living you are willing to accept. Some people just can't get by on $74,000 a year for personal living expenses. Some people require more, like a couple million. Me.... I get by on far less than $74,000.

I guess the secret to sucess is spending less than you make.
:dunce:

 

[EAT BEEF]

Lots of people can't do anything ,but a few find a way to get things done.If you don't look at land as a investment running cattle is a poor choice unless you lease the land.I can make it with about 1/6 of that many cows ok,but most of my stuff is paid for.I'm not done buying land yet and I don't do much thats not related to agriculture, you just have to think outside the box a little.The wife and I also don't spend a third of that on living expenses and think we waste alot of money :???:

I have new trucks, but I haul cattle and equipment,I have some newer equipment,but I do custom work.I see alot of opertunities in agriculture,but you might have to mix it up a little.

 

[Jogeephus]

I have new trucks, but I haul cattle and equipment,I have some newer equipment,but I do custom work.I see alot of opertunities in agriculture,but you might have to mix it up a little.

I agree. You just have to be willing to hustle and be willing to work whatever hours it takes to get the job done.

 

[TexasBred]

i know the writer of that artical has never milked cows.the days of making big money on a 110 dairy are long gone.now days its a 400 cow dairy.

Bull I was wondering about the "dairy' part of that article as well. I figure it would really take many more than 400 to even have a making any profit. Most are moving to the drier climates and going for the larger herds. 110 cows is just big enough to work you do death and still end up broke. Good management will only help you tread water longer. Too many things are beyond your control and good management only prolongs the agony. Sometimes the best management decision you can make is to get out while your ahead.

 

[dun]

i know the writer of that artical has never milked cows.the days of making big money on a 110 dairy are long gone.now days its a 400 cow dairy.

Bull I was wondering about the "dairy' part of that article as well. I figure it would really take many more than 400 to even have a making any profit. Most are moving to the drier climates and going for the larger herds. 110 cows is just big enough to work you do death and still end up broke. Good management will only help you tread water longer. Too many things are beyond your control and good management only prolongs the agony. Sometimes the best management decision you can make is to get out while your ahead.

Depends on the area of the country. Around here 100 cows is a big dairy. Most run from 65-85 cows but it's a husband and wife deal with no outside labor or very little. They may not be in tall cotton but they're living comfortably which is about all one can really ask.

 

[hrbelgians]

i know the writer of that artical has never milked cows.the days of making big money on a 110 dairy are long gone.now days its a 400 cow dairy.

Bull I was wondering about the "dairy' part of that article as well. I figure it would really take many more than 400 to even have a making any profit. Most are moving to the drier climates and going for the larger herds. 110 cows is just big enough to work you do death and still end up broke. Good management will only help you tread water longer. Too many things are beyond your control and good management only prolongs the agony. Sometimes the best management decision you can make is to get out while your ahead.

Depends on the area of the country. Around here 100 cows is a big dairy. Most run from 65-85 cows but it's a husband and wife deal with no outside labor or very little. They may not be in tall cotton but they're living comfortably which is about all one can really ask.

I have to agree with you Dun. I have a neighbor that is milking right at 40 head, certified organic and this dude has got it working!! He told me exactly what he did last year $$$ wise and all I can say is WOW! And NO he does not have his land paid for. He started out with 80 acres and bought another 40 this summer. I could not operate as he does, however I like to watch and see what he comes up with next that works. So I guess my answer is, "larger is not always better."

 

[Brandonm22]

That's kind of depressing for me, it kind of makes one wonder how in the future farms will survive? I know in my parts land is around 3500-4000+ an acre and there is no way ill be able to buy 250+ acre to make a income farming. I know other people my age will wonder why would they farm when they can get a city job and make twice that. I wonder who will be future farmers? Kind of points to farming becoming an industry in the future. :? Most large family farms cant hold market up if the smaller farms like me keep dispersing. It seems farming for the small operation is pointless in the future. I just hope somehow the tides will turn and it will be differnt for me in the future but i just cant see it happening. :frowns: :|

You may just have to go where land is cheaper. I know around here people buy it at that price just to sit and hold it hoping that prices double in coming years. There is no guarantee that you will be able to go into business in the county......or the state where you started........and some are cashing in and relocating to Brazil too.

 

[dyates]

Most real farmers I know live on a lot less than $74000. Think about it. For those of you who are real farmers, when was the last time you took a vacation? How much do you spend on eating out and movies compared to "normal" folks. How much do you spend on clothes? I never buy new clothes until they are worn to the point of being indecent (sometimes well after). I'm by no means a full time farmer, but farming is a lifestyle, not just an occupation. I think for most, the farming lifestyle requires much less $$ than many folks. I like to think I make money by saving money. If I'm farming, I don't have time to go somewhere else and spend it.