Off Farm Income

[JMJ Farms]

I've said it myself and seen it no telling how many times right here on CT regarding the cow business, mainly the cow/calf business ........ "can't do it with out off farm income" or "requires off farm income" or something similar. Most of us have not only said this but proved it by living it. So here's the question(s). Is this because our modern standard of living is too high on the hog for the most part? *or* Is it because of a changing of the times such as global markets, electronic traders, inflation, inputs, etc? Either way if I really take time and think about it a little, it makes me kinda sad. I sure would love for my boys to be able to continue to experience both the good and bad experiences that go with the farming/cattle/country lifestyle if they choose as they grow older. Lots of life lessons to be learned and keeps you busy and out of trouble.

 

[City Guy]

Look at it the other way round--You don't have an "off farm" job--you have two jobs. Be grateful that the cattle job allows you enough time to have a second job.

I realized a long time ago that cattle ranching is a slender margin enterprise best practiced on a large scale. Small farms should forget about doing what they like and start doing what it takes to make money (unless doing what you like is more important than making money) Small operations should produce a specialized product that large producers can do.

 

[Cross-7]

Debt load !

Seen it my whole life
Grandpas land free and clear vs buying land.

Edit
Seen them piss it off or grow it for the next gereation.

In my business operating capital is # 1
Debt and lack of funding is a business killer

Edit again
250k investment and needing a 30% to live
Vs
Million dollar investment and 10-15 % return and not a part of your living.
The ability to buy in bulk/volume and take more risk.

 

[Bigfoot]

It takes a fortune just to live now a days. Sure, we could all live on less, but I know what my families monthly living expenses are. Just the things you can't get around add up:food, insurance, property taxes, electric, water, fuel. It takes a small fortune just to not scrape bottom.

 

[RanchMan90]

I make half my income off the farm and half off the livestock, but I took a 50% pay cut to come home off the road and do what I like. I suppose I could live off the livestock but I would sure be roughing it and not be able to grow and build something. I have no inheritance coming though I was raised on a ranch. I don't know what will be harder to stomach, seeing the old home place leaving the family or take the profit out of my cattle for 20 years by buying it.

 

[TCRanch]

JMJ, I believe the answer is both, contingent on the ever fluctuating market/economy and the perverse need to Have It All. City Guy, some times doing what you like is more important than making money. We were fortunate to retire early even though my husband "quit while he was ahead" & had numerous subsequent offers (my job was not as auspicious). Was no longer important and we lead a relatively simple life. We would love nothing more than to pass the ranch on to our heirs but their priorities & needs are different than ours (which is a polite way of saying Too Much Work).

 

[NECowboy]

Around here even with full time ranchers the wife usually works in town. They do it to make ends meet and for the wife to be able to drive a fancy vehicle. Chalk it up to expensive inputs, low cattle prices and margins, expensive land and rent, the high cost of living these days (food prices probably way higher vs inflation these days, teenage girls just gotta have those 100 dollar buckle jeans), and higher expectations of keeping up with the joneses these days and buying kid a nice used pickup ($$$) when he turns 16 and going to every sporting event even if it is 3 hours away, and you need the off farm income. There are some people that only ranch part time but those are usually smaller operations. Then a lot of people here raise both crops and cattle and usually it works out ok (the bigger you are and less debt you have of course the easier) but years like this just make you scratch your head as both crop and cattle prices are terrible!

 

[littletom]

It not just the cattle its farming in general. I farm full time 95% of income comes from the farm. Like some others said size is the problem with everything costing so much. The more head or acres you can spread eqt. cost over the cheaper it is. My family lives with out a lot extras. It would be so much easier knowing we had x dollars to live on. I really think inputs is the biggest hurdle it cost a lot of money to farm. I have no problem admitting had my parents not helped me get started this would not had worked. They let me use some ground and a tractor rent free at first before I bought farms, and eqt., and built a reputation people would lease to me. And the variable profit swings you can't plan for. Some years are so great it's amazing, the last 2 just try and make payments and hope for next year. Sorry to ramble my answer is inputs and crazy swings in markets and yield. I'm ten years in and wouldn't trade it for anything.

 

[Kingfisher]

Look at it the other way round--You don't have an "off farm" job--you have two jobs. Be grateful that the cattle job allows you enough time to have a second job

You know most fire men I know have a side job.
What's " farm income?"

 

[callmefence]

Around here even with full time ranchers the wife usually works in town. They do it to make ends meet and for the wife to be able to drive a fancy vehicle. Chalk it up to expensive inputs, low cattle prices and margins, expensive land and rent, the high cost of living these days (food prices probably way higher vs inflation these days, teenage girls just gotta have those 100 dollar buckle jeans), and higher expectations of keeping up with the joneses these days and buying kid a nice used pickup ($$$) when he turns 16 and going to every sporting event even if it is 3 hours away, and you need the off farm income. There are some people that only ranch part time but those are usually smaller operations. Then a lot of people here raise both crops and cattle and usually it works out ok (the bigger you are and less debt you have of course the easier) but years like this just make you scratch your head as both crop and cattle prices are terrible!

Behind every successful rancher there's a wife with a job in town.. :hide:

 

[City Guy]

Serenity Prayer comes to mind: "Control the things I can". If you are not direct selling your product you cannot control your income. That leaves only the inputs to control. Some things I have noticed about successful business owners:
1. They have a plan. It is flexible enough to adapt to uncontrollable changes but it has a definable goal with step-by-step instructions.
2. They have disaster plans. They know ahead of time what they will do in hard times; they are seldom taken by surprise.
3. They are stingy. They think long and hard before letting go of each penny. In their minds virtually no expense is considered "fixed" or "necessary".
4. They are ruthless. If an animal, machine or person doesn't carry its load it's gone.
5. They demand their money back. Before spending a penny on anything, they want reasonable assurance that the expenditure will pay for itself in a reasonable time.
6. They don't give a rats azz what everyone else is doing. They are not afraid to go against the "commonly accepted practices".
7. What others think of them is none of their business.
8. During good times they hoard their money and lay low. During hard times they take advantage of the bargains with the money they put away.
9. They are community minded, honest, trustworthy and generous to family, friends and community.

I notice these qualities in others because, as a businessman, I practiced NONE of the first eight.

 

[Rafter S]

I coul live off of cattle if I had enough of them. But I'm pretty sure that land availability will keep me from ever having that many.

 

[True Grit Farms]

I can't see how those folks without an off farm job can make it. And the few I know that farm full time have no kind of life that appeals to me. But to their credit most do seem happy, and get to sleep in their own bed at night and that's worth a lot. In our part of the country if your not willing to travel for work you scratch and claw just to get by.
One of my aunt's and uncle made a good living growing and selling fruits and vegetables off a stand in their front yard. Now a days everyone wants someone to work for them instead of doing it themselves.

 

[mwj]

My folks said that when you can separate your ''wants'' from your ''needs'' life will be a lot easier!

 

[js1234]

The issue is the volume that one has to operate on to make a really great living in this business. Also, there is the challenge that some degree of vertical integration is needed to consistently capture a profit on most of the sets of cattle one owns.
The best operations in the world own sets of cattle that lose money, every year.
Another factor is that the size that it truly takes to be a large ranch that can capture economies of scale is very, very, very hard to build from scratch to today unless there are significant outside cash sources.
In the economics of today's market place, a guy running a couple hundred mother cows, while he certainly can be consistantly profitable, really is operating at a sideline business level.

 

[Bigfoot]

I question if a one man show, can run enough cattle to make a living (I guess that term is relative to how much you can live on).

 

[Craig Miller]

Look at it the other way round--You don't have an "off farm" job--you have two jobs. Be grateful that the cattle job allows you enough time to have a second job


I like the way that is worded.

 

[Craig Miller]

Around here even with full time ranchers the wife usually works in town. They do it to make ends meet and for the wife to be able to drive a fancy vehicle. Chalk it up to expensive inputs, low cattle prices and margins, expensive land and rent, the high cost of living these days (food prices probably way higher vs inflation these days, teenage girls just gotta have those 100 dollar buckle jeans), and higher expectations of keeping up with the joneses these days and buying kid a nice used pickup ($$$) when he turns 16 and going to every sporting event even if it is 3 hours away, and you need the off farm income. There are some people that only ranch part time but those are usually smaller operations. Then a lot of people here raise both crops and cattle and usually it works out ok (the bigger you are and less debt you have of course the easier) but years like this just make you scratch your head as both crop and cattle prices are terrible!

This probably is the biggest reason it's so hard to make it. And now the boys are wearing buckle jeans too. And 100 dollar t shirts. A good truck for me was a worth a thousand dollars. Now everybody is buying their boys 15000 dollar trucks. Another thing is food prices didn't hurt us all that much since we grew gardens to eat out of. Most folks don't have them nowdays and the ones that do just do it as a hobby. They probably don't even break even on them if they put pencil to paper.

 

[jedstivers]

Even back in the 80's when it cost much less to live it would have taken 200-500 mamas yo live off just cattle. That won't do it now. Who all east of Texas has enough land to run that many? Very few.

 

[RanchMan90]

As a rule of thumb I figure $100 margin a year on cow calf on rented or payed for land, and $100 margin on stockers on 100 day deal right now. Cow margins spoiled everyone the last few years though. Pretty easy math to determine what kind of lifestyle you will live.