Neighbor's cattle profits

[alisonb]

Owner labor is an indirect cost. It should be considered an offset to net income because the farmer would have had to make money some other way, were he or she not farming.
Many farm budgets do not include costs of own labor which is wrong in my opinion, you are running a business. Apart from that, what happens when the farmer gets a little older and can no longer handle all the work, or there is a catastrophe, or the operation increases substantially and help needs to be called in, maybe not 'own labor' but still labor that has to be budgeted for - there are a lot of examples I can use.
You have to pay yourself a realistic wage. With that money allocated to you, you will pay for insurance or/and retirement benefits etc. which you would have received had you been working for someone else. It is also a mental thing, many people tire of the same old thing especially when they are not being compensated, budgeting/paying a wage and reaching your goal is a motivator.

 

[M.Magis]

AlisonB is absolutely correct. Personal salary and business profit are, or should be, two totally separate things. It's business 101, yet rarely understood by the self employed. It's probably why so many businesses fail within the first couple years.

 

[ALACOWMAN]

AlisonB is absolutely correct. Personal salary and business profit are, or should be, two totally separate things. It's business 101, yet rarely understood by the self employed. It's probably why so many businesses fail within the first couple years.

i know my cattle business failed the first couple years,,, but i aint gave up hope on it yet..

 

[backhoeboogie]

Did anybody mention labor or is that for free as well?

Let the gubment pay it. That's what Wal-mart does.

1,558,000,000 is the price tax payers pay to support Walmart employees, a multi-billion dollar company. In 2008 taxpayers paid out 18 million dollars to Walmart employees and dependants in Boston.

There's more if you wanna read and get depressed.

http://drgdarealgrinc.hubpages.com/hub/ ... pros--cons

 

[TexasBred]

Did anybody mention labor or is that for free as well?

Let the gubment pay it. That's what Wal-mart does.

1,558,000,000 is the price tax payers pay to support Walmart employees, a multi-billion dollar company. In 2008 taxpayers paid out 18 million dollars to Walmart employees and dependants in Boston.

There's more if you wanna read and get depressed.

http://drgdarealgrinc.hubpages.com/hub/ ... pros--cons

Let's shut them all down....then they can draw unemployment, food stamps AND you'll still be paying for their health needs.

 

[plumber_greg]

I wasn't gonna' get into this, but it's hot out and it feels good inside. Agman, please don't take anything personal, I'm using you as an example just because you're willing to share your operation with us.
Management style has a cost of production just the same as out of pocket expenses. I'm using Agman's 100 cow herd as the example. I may not get every number correct, it's the best example of reading his posts that I can remember.
1. Agman has stated that his cows are a 4 or 5 frame cow, raising calves that will sell in the top 10% of his market. Great, but, if he weans off the cow 500 lb. calves that bring 10% of 1.75/cwt, if costs him 17 cents per hundred lbs. 17cents x500lbs.
extra cost of his production $85 per calf
He has stated that he never calls a vet. If one gets sick and can't recover, it dies. Cost of productive cow, $2000, lost calf that doesn't sell $1050. Total $3050 divided by 100. I am figuring that he has lost 20 cows over 20 years.
Extra cost $30/calf
Never worm cows. I think university studies show a $50 return on worming cows. I will figure $30
$30/calf
He calves year around. Wish I could. 90% calf crop. 10 lost calves @ $1050= $10,500
$105/calf
Enphodyte fescue, me, agaman, dun or anyone else has no idea what this costs us. We have spent a lifetime adapting cows to it. Put our cows on some native grasses or some bermuda and we may wean 1000lb. calves
put your own number here
He likes 1000lb. cows for his operation. Culls are selling for $75/cwt. 1400lb. cows will put $300 more per cow in his pocket. Sell 5 per year.
$15 per calf
This is what I can think of. It's $250 per calf, not counting the fescue. I'm aware that some things will be offset with other costs, but my point is that even mangement styles have their own costs.I'm sure that there are other things. but you get my drift. gs
Agman, sorry to use you as an example, but that's all you are in my post.

 

[Massey135]

What the hells a vet gonna do that I can't? Just bc he says he never calls the vet sure doesn't insinuate he jus let's em die.

Short of some internal surgeries, there's never a need to pay for a vet. Sure the situation could arise, but I never see it necessary to budget for those fluke scenarios. I can order any vet meds I need from a few different online sources - excess, nuflor, baytril, even equipoise or anastrazole.

Some can get on here and ramble numbers off but the fact of the matter is most naysayers are trying to expense other assets through their cattle and its just not right.

Land taxes, tractors, barns, and all the other unnecessary equipment and infrastructure have nothing to do with the cattle. Those are all either appreciating or deprecating assets of their own.

I've got a group of brangus cows on a 91 acre lease and I guarantee their total cost per hd was less than $100. Only the depreciable cost per hd can be expensed and with the salvage value of cattle as high as it is, the yearly depreciation might be 50 bucks per hd. I fed those 18 cows 20 rolls of hat at $35/roll my cost and maybe 10 salt blocks all year. The land lease is $15/acre. I don't have exact sale sheet on hand but 17 calves averaged over $650 bucks and that's with weaning em early bc of no rain. You do the math.

 

[Massey135]

And I bought a hay buggy for $75 and put my old truck tires in it works perfect. I expense the fuel when I feed as personal entertainment bc I like cows. Some go to the movies, some to the mall, some to braums - I go feed cows and drink tallboys.

 

[Brute 23]

And I bought a hay buggy for $75 and put my old truck tires in it works perfect. I expense the fuel when I feed as personal entertainment bc I like cows. Some go to the movies, some to the mall, some to braums - I go feed cows and drink tallboys.

Amen! Thats why its a pointless conversation. No matter how high on the hog some people like to pretent to be.... there is no wrong way when your the boss. There's only my way... the right way... or the highway. :kid:

 

[TexasBred]

And I bought a hay buggy for $75 and put my old truck tires in it works perfect. I expense the fuel when I feed as personal entertainment bc I like cows. Some go to the movies, some to the mall, some to braums - I go feed cows and drink tallboys.

Amen! Thats why its a pointless conversation. No matter how high on the hog some people like to pretent to be.... there is no wrong way when your the boss. There's only my way... the right way... or the highway. :kid:

Most everybody has "their way" and they all think it's the only way yet they all do it differently.

 

[Ouachita]

Let me throw a stick in the spokes..........

I have 130 acres. I did NOT buy this land to raise cattle. I bought it because it was where I wanted to live, without close neighbors. I'm going to live here and own this land, with or without cattle, till I die. I'm also going to fire up my truck and drive all over my place, with or without cattle. I owned a tractor before I owned cattle. I owned several farm implements before I owned cattle. If I sold all my cattle today, I would still retain everything above because I need it to maintain my place.
Before I had cattle, I spent a lot of money bush hoggin the place. Cattle seemed to be a way to utilize my land; And they are. So, my question is this; Should I be counting all of the "expenses" that I would have anyway, if I didn't have cattle???????? They save me about $2,000 in bush hogging each year. Can I count that toward my profit?
Also, should I count the hay that I pay nothing for, as income? Because I could have sold it?? I get about 60 rolls per year off my place from a man that cuts and rolls it on the halves. This hay value is less than the cost to bush hog. Should I subtract the difference???

 

[agmantoo]

plumber_greg

I have no problem with you using my inputs as an example. The problem with your presentation is that it is not applicable to my operation. There are partially correct statements with totally incorrect assumptions and non applicable figures. I market what my farm will support and produce with minimal purchased inputs. I probably produce more pounds of calves sold per acre of pasture than anyone here. I produce these animals at a cost to me less than anyone I know. I do this with pride and at a nice profit. The cattle have generated a profit every year since I went to rotational grazing. Steer calves sold on 4 June brought $1.95 per lb, on June 25 my best steer calves brought $1.70 per lb. Lots sold in the same weight range on Superior auction today sold for less. The calves I produce are not trash! You guys are free to try to fabricate scenarios that blow my figures away but at the end of the year I know the true profit, money that I can put my hands on, that is generated. Money that I used to buy my D5 dozer and my 312XL excavator as well as a number of other big boy toys in previous years, all from a part time venture that I enjoy. Realize I am not selling anyone here anything. My intent, as I have stated previously, is to share information and experience. The reason for sharing the numbers is that I felt it would add credibility and some people better comprehend numbers than written words. I am not asking anyone to accept my numbers and if you are offended or just do not believe them just skip over my posts and go forward and be happy, healthy and successful .

 

[MarkM]

1. Agman has stated that his cows are a 4 or 5 frame cow, raising calves that will sell in the top 10% of his market. Great, but, if he weans off the cow 500 lb. calves that bring 10% of 1.75/cwt, if costs him 17 cents per hundred lbs. 17cents x500lbs,extra cost of his production $85 per calf

What is the cost of the extra inputs to be in the top 1%? Are they more than $85 per calf?

He has stated that he never calls a vet. If one gets sick and can't recover, it dies. Cost of productive cow, $2000, lost calf that doesn't sell $1050. Total $3050 divided by 100. I am figuring that he has lost 20 cows over 20 years.

What if by culling the herd with this method agman sacrificed a cow a year in the first few years, but lost fewer cows than he otherwise would have in later years due to increased herd vigor? I would think that cows that don't need vets tend to have calves that don't need vets.

Never worm cows. I think university studies show a $50 return on worming cows. I will figure $30/calf.

What if by not worming, agman's dung beetle population is higher? Thereby incorporating more nutrients into the soil and decreasing fertlizer costs. What if by culling animals that are performing poorly, a herd is developed that is resistant to parasitic performance losses?

He calves year around. Wish I could. 90% calf crop. 10 lost calves @ $1050= $10,500 $105/calf

Are you saying that by NOT calving year round agman would increase his calf crop to 100%?

Enphodyte fescue, me, agaman, dun or anyone else has no idea what this costs us. We have spent a lifetime adapting cows to it. Put our cows on some native grasses or some bermuda and we may wean 1000lb. calves put your own number here

I don't see how that can be a cost of management, maybe a cost of geographic location.

He likes 1000lb. cows for his operation. Culls are selling for $75/cwt. 1400lb. cows will put $300 more per cow in his pocket. Sell 5 per year. $15 per calf

But running 1000 lb. cows allows more animals per acre may be giving him just as many or more pounds to cull.

This is what I can think of. It's $250 per calf, not counting the fescue. I'm aware that some things will be offset with other costs, but my point is that even mangement styles have their own costs.I'm sure that there are other things. but you get my drift. gs
Agman, sorry to use you as an example, but that's all you are in my post.

Greg, thanks for a post that made me think. I believe that agman's real world hard figures are something to be admired. Just some food for thought.

 

[plumber_greg]

Agman knows that I was just using him as an example, Mark. All I'm saying is that different managment styles have different costs.
If I could make $50 dollars per head by creep feeding, for example, won't I be $50 dollars behind if I don't? If it makes my calves sell in that top 1%, my input costs have went up, but so has my bottom dollar.
Here it would be impossible to calve year around, would lose the black calves today in this 107 degree heat, as well as lose them from Dec. to March in snow mud and ice. There is no market to take them to certian times of the year. If having a 60 day calving season, calving in barns in the winter, and really having a 100% calf crop returns me $50 a calf, won't I lose it if I don't do it? Remember, people are saying labor is free.
I'm just saying that just because I don't do it someone else's way, doesn't mean that my way is wrong or htat their way is wrong, just different managment styles with different costs.
And once again, I have respect for what Agman does, wish I was in an area to do it.
Probably shouldn't have commented on this, and won't again. gs

 

[MarkM]

Agman knows that I was just using him as an example, Mark. All I'm saying is that different managment styles have different costs.
If I could make $50 dollars per head by creep feeding, for example, won't I be $50 dollars behind if I don't? If it makes my calves sell in that top 1%, my input costs have went up, but so has my bottom dollar.
Here it would be impossible to calve year around, would lose the black calves today in this 107 degree heat, as well as lose them from Dec. to March in snow mud and ice. There is no market to take them to certian times of the year. If having a 60 day calving season, calving in barns in the winter, and really having a 100% calf crop returns me $50 a calf, won't I lose it if I don't do it? Remember, people are saying labor is free.
I'm just saying that just because I don't do it someone else's way, doesn't mean that my way is wrong or htat their way is wrong, just different managment styles with different costs.
And once again, I have respect for what Agman does, wish I was in an area to do it.
Probably shouldn't have commented on this, and won't again. gs

Greg,

I am glad you did comment. Specific thoughts give me things to consider and, hopefully, learn from the process. I am sure I am not the only one. Certainly not saying your way is wrong. Even in this particular post, there is something to be learned from your reasoning...and, no, labor is not free.

 

[backhoeboogie]

704 miles on the truck last year just dragging the trailer to the sale barn and back. That's at least 50 gallons of fuel in itself. I suppose some of ya'll must be having good old fashion cattle drives since you have no expenses for this.

No one here has to repair fence ever? I still don't see anyone expensing fence repairs. No one has any storms, fires, or neighbor's rogue bulls doing damage?

I give myself an annual budget each year and stay below that budget. It is hard to do. It makes it even harder for me to believe some of the things I read in this thread. Uncle Same must be very proud of all of you who are turning in 100 percent profits.

I enjoy cows too. Especially when all the calves are hitting the ground.

 

[agmantoo]

704 miles on the truck last year just dragging the trailer to the sale barn and back. That's at least 50 gallons of fuel in itself. I suppose some of ya'll must be having good old fashion cattle drives since you have no expenses for this.

Lets compare

For my operation......4 haul trips to the sale barn per year on average. Cost per trip is $200 or $800/year.. Cattle are insured by the contract hauler for any injury. The driver helps me load the animals. The loading help labor is included in the $200. No time wasted by me spent going to the sale barn. The auction is on the internet if I wish to watch. The haul expense is deducted by the sale barn. I have a receipt for the expense. The receipt is sent to my tax preparer. IRS is satisfied and so am I.

 

[ALACOWMAN]

What the hells a vet gonna do that I can't? Just bc he says he never calls the vet sure doesn't insinuate he jus let's em die.

Short of some internal surgeries, there's never a need to pay for a vet. Sure the situation could arise, but I never see it necessary to budget for those fluke scenarios. I can order any vet meds I need from a few different online sources - excess, nuflor, baytril, even equipoise or anastrazole.

Some can get on here and ramble numbers off but the fact of the matter is most naysayers are trying to expense other assets through their cattle and its just not right.

Land taxes, tractors, barns, and all the other unnecessary equipment and infrastructure have nothing to do with the cattle. Those are all either appreciating or deprecating assets of their own.

I've got a group of brangus cows on a 91 acre lease and I guarantee their total cost per hd was less than $100. Only the depreciable cost per hd can be expensed and with the salvage value of cattle as high as it is, the yearly depreciation might be 50 bucks per hd. I fed those 18 cows 20 rolls of hat at $35/roll my cost and maybe 10 salt blocks all year. The land lease is $15/acre. I don't have exact sale sheet on hand but 17 calves averaged over $650 bucks and that's with weaning em early bc of no rain. You do the math.

spend more time in school than a MD, and tons of money on it....

 

[Hondac]

Having read and studied Agmantoo's posts on this site as well as others, following is my personal "Guesstimate" as to his profitability with his operation as it is NOW. Land costs are not considered and neither are the investments he made to get to where he is NOW.

INCOME (cash):
I assume that Agman's 100 momma cows yield 90 marketable calves per year at 550 lbs. each
He keeps 10 heifers to replace lost or culled cows and sells the 80 remaining
Calves sold yield an average price of $1.25 per lb.
Cull cows yield an average price of $700 each

80 calfs x 550 lb. x $1.25 = $ 55,000.00
8 cull cows ( 10 minus 2 died) x $ 700 = $ 5,600.00

Total Cash Income = $60,600.00

EXPENSES (cash)

Chicken litter for 30 acres = $1,800.00
Lime as needed = 2,000.00
Fuel for clipping, dragging, etc. = 1,920.00
Maintain tractor & equipment = 1,920.00
Transport to market costs = 800.00
Electricity for fences = 600.00
Insurance Liability = 1,000.00
Water (and related expenses) = 2,000.00
Salt & Minerals = 2,000.00
Seed = 2,000.00
Fence repairs, etc. = 1,000.00
Misc. Expenses = 4,000.00

Total Cash Expenses = $21,040.00

Net CASH gain from operation = $39,560.00

This is MY view on Agman's methods and I hope to one day achieve similar results.

 

[J&D Cattle]

I go feed cows and drink tallboys.

PRICELESS!!! My wife is convinced I can't talk about much less feed or mess with the cows without a tallboy. It's early and I'm already thristy.