Reasonable time expectation to get to "Break Even"

[epj]

I've been browsing and reading this forum for quite a while now but this is my first post. This is an excellent forum of information. My "pie in the sky" questions of a reasonable time to break even would be based on these parameters:

1. Location: Northeast of DFW, TX.
2. Property: 20-25 acres
3. Land Note: $350-425/mo. (not sure on tax and ins.)
4. Infrastructure needs: Tractor, stock trailer, headgate/working chute, perimiter and cross fencing, water, etc. (craigslist.org) =)
5. Most likely will try a cross-bred cow-calf operation with 1 cow per acre max.

Resources:
1. Close friends with longtime experience in livestock and cattle buying.
2. Two sons age 20 and 16 not afraid of working up a sweat.
3. Established relationship with large ranch owner as source for seedstock.

I am not looking for an exacting detailed p&l statement. Just more of a viable presentation to give to the wife that there is some potential for my endeavor to eventually become a self sustaining enterprise, and thus gain her approval!

Thank you in advance for your comments both good and bad. =)

 

[jkwilson]

Warning!: Cynicism Ahead!

You won't live long enough. Fixed costs eat you up with a herd that small, and for all of the time it will take, you would be way ahead to get a part-time job at Walmart.

 

[dyates]

I hate to be the bearer of bad news, but I would probably not expect to make money in such an endeavor. I would guess you could only run a maximum of 7, maybe 8 cows on a piece of land of that size. I did some quick 'cipherin. When you consider only the cost of your starter herd (7cows plus bull), buyin one replacement every other year, the cost of winter feeding, and your mortgage payment, you would have to sell $1000 calves every year to just break even. $1000 calves don't exist and there are many more expenses that I didn't even include. Of course, there is the love and enjoyment that, as the credit card commercials state, is "priceless". Good luck convincing your wife of that.

 

[SRBeef]

You know what expense side of the ledger is. What you need is to fill in the income side.

What type of operation are you going to have, what are you going to sell, to whom and when and for how much.

You will need to start with the carrying capacity of your land. Are you going to run a feedlot or grazing only or a combination.

This is basic information on any startup business. Be conservative on the income side.

 

[epj]

I didn't figure on it being a pretty picture. I guess the question should be better phrased as to what income could I expect to help offset my expensive hobby. Great replies thus far. Thank you.

 

[Limomike]

With that amount of land, might be better off raising some goats.

 

[Bez+]

I've been browsing and reading this forum for quite a while now but this is my first post. This is an excellent forum of information. My "pie in the sky" questions of a reasonable time to break even would be based on these parameters:

1. Location: Northeast of DFW, TX.
2. Property: 20-25 acres
3. Land Note: $350-425/mo. (not sure on tax and ins.)
4. Infrastructure needs: Tractor, stock trailer, headgate/working chute, perimiter and cross fencing, water, etc. (craigslist.org) =)
5. Most likely will try a cross-bred cow-calf operation with 1 cow per acre max.

Resources:
1. Close friends with longtime experience in livestock and cattle buying.
2. Two sons age 20 and 16 not afraid of working up a sweat.
3. Established relationship with large ranch owner as source for seedstock.

I am not looking for an exacting detailed p&l statement. Just more of a viable presentation to give to the wife that there is some potential for my endeavor to eventually become a self sustaining enterprise, and thus gain her approval!

Thank you in advance for your comments both good and bad. =)

Well, I am afraid you are not going to like the answer.

Profits are low to non-existant.

Better have an off site job that pays for your plans because you do not have the land base, possibly do not have the knowledge and probably do not have the skill - meaning your first years will be spent losing money - big time.

Probably will never make it to even.

Look, do it as a hobby and then if things look good - after 5-10 years - step into it.

Trust me - if it was easy to do everyone would do it.

Start small, stay small, get smart and have fun.

Bez+

 

[dyates]

1000 dollar calves do exist if you have the right genetics. That is usually around what I get for my feeder bulls every year. Breeding bulls I get 1200-2000 dollars and for non bred heifers I get 1000-1200 and for bred heifers/cows i get around 1200-1700 dollars.

The day you show me a $1000 feeder bull calf, not yearling, not a show animal, will be the day I pucker up to your backside in Times Square. I'll even give you twenty minutes to gather the crowd.

 

[CattleHand]

2. Property: 20-25 acres


Thats not enough land to turn a profit in any reasonable amount of time. Thats pretty small pasture.
Why do you figure you will need a tractor? Are you goign to buy hay in the winter? any way for you to store feed also?

 

[IluvABbeef]

You'll need at least 10x to 100x or more the amount of land you own to actually profit from a commercial crossbreeding cow-calf operation. And even then the costs to get started on that amount of land is no different to how much $/acre you have to put in to start what you want with a small tract of 20 to 25 acres.

You're better off raising mini's or goats if you do want to make this a working enterprise. And you'll have to carefully manage your small pasture accordingly so that you can get second growth or growth for next spring instead of taking $$$$ out of your wallet for more hay.

 

[Howdyjabo]

I second goats or sheep- with a three pasture rotation and a dry lot to manage over grazing and parasites.
No tractor

 

[grannysoo]

:lol2: :lol2: :lol2:

Stick with the goats and you'll have a better chance. Plus, they smell so much better than cows! :roll:

 

[Running Arrow Bill]

Don't let the "naysayers" discourage you from having a "Life" in the country raising animals... ;-)

However, do not expect to "return a profit" on any usual livestock operation. It is a way of life first, and hopefully a break-even or profit second. Some show a profit on 25 acres, some lose their A$$ on 25,000 acres. All depends on your goals, management strategy, and market potential.

One of the basics of ANY business venture is to produce those products that continue to be in demand. Do not produce something that "you" like only when there is no market potential. Carefully and logically researched "nitch" markets are another possibility...just don't fall victim of transient fads or marginal trends.

Land is a long term investment...they are NOT making any more of it! Better than any other so-called "investment".

Livestock (as a rule) will never pay for land + their upkeep. The best one can usually hope for is for the livestock to pay for their basic upkeep and maybe show a little profit. Over time, land appreciates; livestock is a long term roller coaster. Livestock is therapy. A way of life. Enjoy!

 

[Howdyjabo]

Heard a quote today

Profit is to Farming that Breathing is to living.

Its necessary......... but not the end goal.

 

[Jim62]

Probably never show a profit, but those cows will sure help you pay for a lot of improvements on your place. And the ag exemption will save you a ton on taxes.

Go for it !

 

[V_Key]

I don't know but I've been told _ it take at least 100 cows Run Right to break even!

 

[xbred]

cattle farming....rich man's hobby and a poor man's dream...

 

[CattleHand]

Someone can correct me if Im wrong but i think that the gain on each cow profit wise is very marginal. Therefore a large profit (or any substantial profit) is made when you have alot of animals making a little bit on each. That's the way i see it. With only a few head you will never pay off the intial expenses you have planned.

 

[djinwa]

Ignore the advice to get goats. I spent a couple years trying them, and am still in therapy trying to overcome my shame and regret. Those are two years I will never get back. Men are not designed for goats - maybe you can get a few for your wife or something.

If you want something smaller, try lowline angus or a cross of them. There are some quality animals available. I would use them for practical purposes, not a fad. One niche might be selling beef directly from the farm as "natural" or grass-fed. Smaller cattle are easier to sell to some people. My AI guy the other day was asking if I knew anyone who wants a 1200 pound steer. Said with the economy, not as many want that size of beef.

You might also have a cow or two with some Jersey in her and get those boys of yours milking. You'll save on the milk bill, and money saved is better than money earned. And your boys can complain proudly for the rest of their lives about you making them milk.

I have a lowline/jersey cross cow from which I take a gallon or more of milk daily, milking once daily through the year. Of 300 gallons yearly, we use 200, which would cost $600+ at the store. We also sell around 100 gallons at $5 per gallon, so that's another $500 value. Add the value of the calf, and she earns her keep.

Of course this all takes too much labor to make a living at it. But my hobby mostly pays for itself.

 

[pwilli3]

If I were you with the same acreage I would consider more than cattle. You might want to look at both cattle and pastured poultry. You have a good acreage size for a profitable pastured poultry operation, and they help clean up after the cattle. I could go into details, or you can check it out for yourself by searching PolyFace Farms. There is low start-up cost, and a great turn cycle on stock for the poultry. You, and your sons, will have to do the marketing and the grunt work, but it sounds like a good gamble for you. With as close as you are to DFW you could market directly to a few high end restaurants and/or supermarkets for the superior poultry. You'd probably be able to do 100-200 hens every 8 weeks, bringing in $2,500 - $3k profit per load. That's upwards of $15k per year. The beauty of it is that you run the same amount of cattle you would have before. You rotate in four pasture on your 25 acres. The chickens rotate in when the cattle rotate out. They clean up the parasites in the cattle manure, and better spread all the natural fertilizer, and keep the bug population down.

Now, I'm sure I'm gonna catch some guff around here recommending chickens, but I am full force behind your cattle plan too. Just trying to put an idea out there for you to make some money to get that land and infrastructure profitable. Cattle alone on that piece of land isn't going to do it. Your ambition of the stocking rate seems about 2x what it should be. Have you contacted an extension agent to see what they think? What kind of water is available?