Question for the wise ones...

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Anonymous

If you were to start in the beef business this year with the goal of at least breaking even and ideally making a modest profit, what type of operation (meat, breeding stock...) would you have? Would you go with purebreds and if so would you register? How would you market? What would you use as factors in determining what type of operation and what breed? Still doing research before getting feet wet (or soaked) and sincerely appreciate any advice from those with experience.
 
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Anonymous

Starting up any business and making a profit in the first year or two is difficult. The questions you ask are impossible to answer without knowing location, resources, etc.

One thing I have gathered from following these various forums is that you will most often get a response to your questions and sometimes an informative one. The problem is that you don't know much about the actual knowledge or success in the beef industry some of these "wise ones" actually have. (No offense intended. Some of the writers to this site do have some good ideas but remember many people become experts when they get an hour away from home.) In my opinion you would be better off seeking advice from someone local that is respected and that understands your location and circumstances.

Personally I don't know many people who have made a fortune from solely being in the beef business but there are some of us who have made a good and satisfying living at it. Good luck!

p.s. If I was to sell purebreds of course I would register as that is the only way the breed associations get income to support their programs and promotion. Remember the average lifespan of a purebred breeder is I believe just under 7 years. I think the reason for this is inexperience in the beef industry. A wise choice may be to get experience on a smaller scale with commercial cattle before making the plunge into purebreds.

> If you were to start in the beef
> business this year with the goal
> of at least breaking even and
> ideally making a modest profit,
> what type of operation (meat,
> breeding stock...) would you have?
> Would you go with purebreds and if
> so would you register? How would
> you market? What would you use as
> factors in determining what type
> of operation and what breed? Still
> doing research before getting feet
> wet (or soaked) and sincerely
> appreciate any advice from those
> with experience.
 
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Anonymous

Good points! I think, that for someone that doesn't have any knowledge of the industry, the best idea may be to partner up with someone that's been around for years and just needs an influx of money to expand or change the area of the industry they are currently involved in. Maybe purchase good pasture land and lease it for grazing. Go slow, don;t drown. It;s old and it;s trite, but the best way to make a small fortune in cattle is to start with a large fortune.

dun

> Starting up any business and
> making a profit in the first year
> or two is difficult. The questions
> you ask are impossible to answer
> without knowing location,
> resources, etc.

> One thing I have gathered from
> following these various forums is
> that you will most often get a
> response to your questions and
> sometimes an informative one. The
> problem is that you don't know
> much about the actual knowledge or
> success in the beef industry some
> of these "wise ones"
> actually have. (No offense
> intended. Some of the writers to
> this site do have some good ideas
> but remember many people become
> experts when they get an hour away
> from home.) In my opinion you
> would be better off seeking advice
> from someone local that is
> respected and that understands
> your location and circumstances.

> Personally I don't know many
> people who have made a fortune
> from solely being in the beef
> business but there are some of us
> who have made a good and
> satisfying living at it. Good
> luck!

> p.s. If I was to sell purebreds of
> course I would register as that is
> the only way the breed
> associations get income to support
> their programs and promotion.
> Remember the average lifespan of a
> purebred breeder is I believe just
> under 7 years. I think the reason
> for this is inexperience in the
> beef industry. A wise choice may
> be to get experience on a smaller
> scale with commercial cattle
> before making the plunge into
> purebreds.
 
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Anonymous

Good points from Dun and Amazed. I think I have gained a little wisdom over the years, don't know that I'm "wise" yet, but I have been able to operate my humble operation "in the black". But I've always been a lot more tight with a dollar than most of my acquaintances, coming from an ag-based family of humble means. A wise man learns from his mistakes, but an even wiser man learns from the mistakes of others. I got some good mentoring from "real live ranchers" --- the type that have no other source of income except for the occasional off the ranch part time job. I also tried to learn from the mistakes that I saw many of my clients make (the wealthy oil & gas, real estate, etc. guys that later become "ranchers").

So here are some random thoughts: I think you should seek out an older and experienced mentor in your general location and maybe offer to help in his operation from time to time, like when he "works" cattle, rounds them up and hauls them to market, etc. Ask a lot of pertinent questions from "real live ranchers", most of them will be happy to give you the benefit of their experience if you don't make a pest of yourself. Study, consult with and read a lot of what the county extension service has to offer. In general, avoid big city rich boys that have fancy and impressive operations that have never turned a profit and never will. Then prepare a realistic multi-year plan, budgets, etc. before actually taking the plunge.

Go to equipment and replacement cattle auctions and sit & observe a long time before you start raising your hand. Find out what the actual retail price is for various items of equipment before you go to an auction. Learn to do many equipment repairs yourself and take some welding courses. Build fences, pens and chutes correctly the first time so they will last many years. There is no such thing as a set of working pens, chute, etc. that is too solidly built, so don't scrimp there. To make a buck these days, even with free and paid for land, you really need to be able to do the vast majority of repairs, doctoring, feeding and other misc. things on or about the ranch yourself rather than hiring it done. Do some critical economic analysis before you make equipment purchases --- don't buy a lot of big, fancy stuff that cannot be econically justified. It's amazing how many people go out and get oversized tractors, fancy goosneck trailers that they use once or twice a year, etc., etc. This is the area where it many times makes good econimic sense to forgo doing it yourself and instead hire it done. Lastly, if you are not very experienced with heavy equipment AND you don't have a very large place with a huge amount of work to be done DON'T buy yourself a bulldozer --- that's a mistake that I see surprisingly often.
 
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Anonymous

Seriously... Amazed, Dun, and AZ offer excellent advice. The trick is much like any other form of business, and personal finances as well. Maximizing income is important, but not nearly as important as minimizing outflow. That’s how the old timers did it. We wonder how they made it in the depression or trying to make land pay for itself, but we forget that they did without a lot that we take for granted. If they didn’t have the cash, they didn’t buy it. If they did have the cash, they didn’t buy it unless the really and truly needed it.

Keep overhead to a bare minimum. Watch expenses very carefully. Don’t make any capital investment that does not obviously cost justify itself with a rapid pay back. Don’t let your pride make business decisions. When you see a fancy operation you can bet it’s a money loser.

So, when you’re looking for a mentor, look at the guys 1) with gray hair, that 2) have been doing this for years, 3) that run a plain no frills operation. If you pick the loudmouth hotdog that’s driving a new pickup, running fancy purebreds, is always calling the vet out, has a show place, etc. he will ruin you. Either he’s got real money coming from elsewhere or he’s headed for bankruptcy.

While the rewards and satisfactions of ranching are numerous and genuine, they’re just not monetary. Good luck.

Craig
 
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Anonymous

I could write volumes on this one, as this is just what I've been doing for the past year or so.

Profits are at least another year away. Break even this year is making the loan payments on time. Even the banker didn't expect any more than that.

My situation is probably very different than yours, as is everyone's on this message board. I bought a farm to expand an existing farming operation. I went more heavily into cattle, but the basics were already there. I had the resources, backing, net-worth and an experienced husband that made bowrrowing money feasible and not a totally stupid move.

A lot depends on what you have, what you'd need and what you can live without. Email me if you like at <A HREF="mailto:[email protected]">[email protected]</A> and I'd be happy to share my experiences. I love talking about cows anyways...

At any rate, bet on hamburger. I did. I figured out my income by figuring the least possible price I could expect to get by hauling my calves into the sale barn. If I get more through direct marketing, or selling on a grid, or selling purebred breeding stock, it's gravy. The bottom line is the bottom line and that's hamburger. Don't count on the fortunes many claim can be made by niche markets, etc. If it happens for you...good, if not, you won't go broke waiting for it to happen.

Make a friend. If you can't find one locally, make friends with a cow person on-line. I did and she has saved my butt more than once. She knows so much and has always been willing to answer my questions and share her ideas with me. She claims her only failure was talking me out of doing this in the first place, but after that initial failure, she has been a total godsend.

You'll find that as you get something down, you'll find something else to ask questions about. Once you get answers, there are just more questions. Get a dependable source of GOOD information, preferably several. Some of it you can figure out beforehand, some you won't even think of until you're in the middle of it. Make sure you can find out what you need to know when you need to know it! As has been pointed out, this probaly isn't a good place to count on for good information! Some of it is really good, but sometimes....I wonder and I'm still new!

Everyone has had good points. Good luck. I still might go broke at some point, but I wouldn't trade this for the world. Most satisfying thing I have ever done.
 
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Anonymous

Excellent questions! Don't know how wise and all I am (have owned and run several businesses in past years)...broke even or made some money variously. Anyhoo, here are some of my ideas (I've read the other posts and some excellent advice from them):

1. Building a good infrastructure (fences, corrals, etc., water source) costs money; however, a good one will pay for itself in long run with fewer "duct tape" repairs.

2. Don't borrow money if you don't have too...are a lot of "ex-business people" who over-borrowed.

3. Probably expect to be in red or maybe break even over first 3 years.

4. With equipment, consider renting seldom used pieces (if you can find them) from rental place or from other local people (farmers, ranchers, etc.).

5. In Texas, some say that the "cost" to maintain a bovine for one year (pregnant or not) is about $350.

6. We do our own vaccinations except those required by law for Vet to do (brucellosis or rabies).

7. "Learn from the UNSUCCESSFUL people and try to use the information from the SUCCESSFUL people.

8. Research, research, research.

9. If sale barn prices are less than beef...eat your critter.

10. Go and expand slow; learn as you go; don't overextend yourself.

11. And, some of your "competitors" who are wearing gold chains, driving a new dually, and all may not in fact be making any money...all show.

12. TRY to make some money. On the other hand, if you have another source of income to sustain you, ENJOY the cattle business and hope you at least break even while having a very rewarding (at times frustrating) lifestyle!

[email protected]
 
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Anonymous

50 yr old, I'm still a puppy compared to most cow men, and the guys that I KNOW consistantly make money always seem to run a place that looks like dogpatch. Buddy of mine (now selling cars and making a damn fine living) has gone broke 3 time farming. He says "I can make a living, or I can make payments but I'll be darned if I can figure out how to do both"
 
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Anonymous

If we had to do it again, we’d likely do the same thing (registered Angus), but cut out the years we bought mediocre cows cheap. Whatever you do, buy quality animals. Not necessarily the highest price, just good, productive cows. But if you don’t have the time to heat detect, AI, attend purebred sales, shows, etc., you might do better by buying some good commercial cattle and feeding your own calves. If you go commercial, pay special attention to the bull you use; he’s half the calf crop. The last year we owned commercial cattle we sent some steers through the state sponsored feed out program and I learned as much about cattle and meat in that one experience as I have learned everywhere else. The importance of feed efficiency and quality carcass can’t be denied. Today the source verified branded beef programs, Nolan Ryan, Bradley 3, PM Beef, Lauras Lean, USPB, etc. are causing a lot of producers to look to the genetics of their cow herds and try to produce beef that will fit specific quality targets. If you are in an area where one of these programs is in place, that would probably be your best bet for being profitable on a regular basis. Good luck….



[email protected]
 
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Anonymous

If you wanted to go into the beef business this year and make money, best to go and buy cow/calf pairs this spring at the auction (probably older cows), Keep till fall ship the calves and feed out the cows and get rid of them right away too. Maybe keep back a couple of replacement heifers. But I would not recommend jumping into the purebred industry right away. Best to slowly work into it unless you got lots of money to buy good quality stock.
 
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Anonymous

> If you wanted to go into the beef
> business this year and make money,
> best to go and buy cow/calf pairs
> this spring at the auction
> (probably older cows), Keep till
> fall ship the calves and feed out
> the cows and get rid of them right
> away too. Maybe keep back a couple
> of replacement heifers. But I
> would not recommend jumping into
> the purebred industry right away.
> Best to slowly work into it unless
> you got lots of money to buy good
> quality stock.

Are you saying that you would buy a pair, sell the calf in spring and then turn around and sell the mama? Or do you keep the mama and let her have more young?

[email protected]
 
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Anonymous

> Are you saying that you would buy
> a pair, sell the calf in spring
> and then turn around and sell the
> mama? Or do you keep the mama and
> let her have more young?

when you buy cow/calf pairs you have an income sooner then any other way, if the cow is good you will know by weaning time (200 days) if not ship. this happens most if you buy a herd and get a varity of ages and quality, careful if buying one only!!!!

why? is someone dumping, bad milk,bad temper,hard calving or many other reasons BUYER BEWARE

any other questions?

[email protected]
 
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Anonymous

> when you buy cow/calf pairs you
> have an income sooner then any
> other way, if the cow is good you
> will know by weaning time (200
> days) if not ship. this happens
> most if you buy a herd and get a
> varity of ages and quality,
> careful if buying one only!!!!

> why? is someone dumping, bad
> milk,bad temper,hard calving or
> many other reasons BUYER BEWARE

> any other questions?

No further questions at this time, but I'll never be too smart. If I do get too smart then I will be the fool, won't I?

[email protected]
 
OP
A

Anonymous

> If you were to start in the beef
> business this year with the goal
> of at least breaking even and
> ideally making a modest profit,
> what type of operation (meat,
> breeding stock...) would you have?
> Would you go with purebreds and if
> so would you register? How would
> you market? What would you use as
> factors in determining what type
> of operation and what breed? Still
> doing research before getting feet
> wet (or soaked) and sincerely
> appreciate any advice from those
> with experience. what ever ye do dont buy a bunch of wore out equipment.looks canfool you.iwent through 2 tractors 1 hayroller_cutter_rake. nothing but headeaks & wasted $$$ i finally went an got new stuff. thats what i should of done to start with. i'd had it paid for by now &not wasted all the $$$ on used stuff. & alot less headaches. it fills good to get my hay in with out breaking down everytime i go to the feld. good luck: tc
 
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Anonymous

Sometimes you even have to be careful that the cow/calf pair you buy is an actual pair and truly belong to one another. As in any business, there are all types who try to get away with anything. Is there someone you know who knows the business that would go with you to the sale barn?

> No further questions at this time,
> but I'll never be too smart. If I
> do get too smart then I will be
> the fool, won't I?

[email protected]
 
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A

Anonymous

> Sometimes you even have to be
> careful that the cow/calf pair you
> buy is an actual pair and truly
> belong to one another. As in any
> business, there are all types who
> try to get away with anything. Is
> there someone you know who knows
> the business that would go with
> you to the sale barn?

I've been stung that way a couple of times. The lesson I learned - keep mama and baby corralled for a few days to see if they truly are a pair. If not, then take them back and get a refund!

[email protected]
 
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Anonymous

Buying old cows with calves cheap,not loosing any to death,good cheap grass pasture, sell calf in fall, don't breed old cows back, let old cows gain cheap weight on fall pasture and sell when fat.Usually can make money this way.
 

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