Profit Margins

[Anonymous]

Please tell me, on annual sales of $10,000 from a commercial herd what percentage of profit would you expect? ex: Two dental labs #1 28 employies gross sales 1.2 mil annually. Husband 65 hrs wife 25hrs wkly. 10% profit. gross income $120.000 #2 0 employees 0 overhead, gross sales $200,000 annually Husband 70 hrs wife 30 hrs wkly. 75% profit. gross income $150,000. So whats the point? If you run your farm like #2 no debt no out side labor baleing your own hay etc. is 50%+ or - profit unrealistic or is 10% closer.Excluding family labor and no compromise on herd health. We are 2 yrs. out from moving to our 60 ac. farm in Ky. The fella looking after it now keeps 12 head and 1 bull. tells me he makes between 5 and 6 grand yrly. but has no idea how much of that is profit. It is under grazed so he mows for me twice a year. My motivation is to hunt it keep it clean with the cattle and teach my boys how to work. But I'm not into slave labor. Would there be enough profit for them to put away yrly. towards buying a truck etc. I'm not a complete green horn, I have a few cows on the place I live now ,they are strickly lawn mowers and have never been bred. I would greatly appreciate any imput. Thank you Al

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[Anonymous]

I've read that the average profits are $75 per cow for cow calf producers. I'm no good with math, but if calves sell for 500 per head at weaning, for 10k gross you would need 20 momma cows, at 75 bucks per cow profit that's 1500 per year profit. Most years we do better then that, but a lot of years e don't do as well. That takes into account land payment, taxes, health, depreciation, infrastructure, feed, etc. I'm sure there are others that do better, but I know of a lot of folks that figue breaking even is a profit for them.

dun

> Please tell me, on annual sales of
> $10,000 from a commercial herd
> what percentage of profit would
> you expect? ex: Two dental labs #1
> 28 employies gross sales 1.2 mil
> annually. Husband 65 hrs wife
> 25hrs wkly. 10% profit. gross
> income $120.000 #2 0 employees 0
> overhead, gross sales $200,000
> annually Husband 70 hrs wife 30
> hrs wkly. 75% profit. gross income
> $150,000. So whats the point? If
> you run your farm like #2 no debt
> no out side labor baleing your own
> hay etc. is 50%+ or - profit
> unrealistic or is 10%
> closer.Excluding family labor and
> no compromise on herd health. We
> are 2 yrs. out from moving to our
> 60 ac. farm in Ky. The fella
> looking after it now keeps 12 head
> and 1 bull. tells me he makes
> between 5 and 6 grand yrly. but
> has no idea how much of that is
> profit. It is under grazed so he
> mows for me twice a year. My
> motivation is to hunt it keep it
> clean with the cattle and teach my
> boys how to work. But I'm not into
> slave labor. Would there be enough
> profit for them to put away yrly.
> towards buying a truck etc. I'm
> not a complete green horn, I have
> a few cows on the place I live now
> ,they are strickly lawn mowers and
> have never been bred. I would
> greatly appreciate any imput.
> Thank you Al

 

[Anonymous]

Al...that's a tough one! Aren't we into livestock just for the love of it? All kidding aside, in our operation, we have been spending a large portion of our income on our infrastructures for past couple of years and subsidizing our operation with other income--no debts, everything free and clear. Now...until I work up our 2002 figures, my "estimate" cost (investment) per 1000# bovine animal unit is running about $35-50. per month. We have 2 of us who are available 24/7, but only work about 1/3 of that time on livestock things, including lot of paperwork. Right now, we're running 13 foundation stock (more or less) with 6 cows in active breeding. All of our stock is registered, some dual registered, and expect our calves to be worth a minimum of $500 each when they hit the ground, depending on pedigree. We do our own vaccinations except those required by a a Vet. Think if anyone in livestock industry could average a 5-10% overall NET profit margin, they would be doing well....others may have different opinion.

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