Reposting

[backhoeboogie]

[ if you own the land figuring a recapture of that expense when you exit.

If you want to keep the land, figure saving $30K a year on property taxes with an ag-exemption. From there, profit is above and beyond. If you break even on cattle, you are not paying the additional taxes. If you make $20K in profit, that is all the better.

 

[Brandonm2]

It takes about three good acres to run a cow here, at about $1,500 an acre. A good cow cost about a $1,000. Excluding equipment and operating costs, that's a $5,500 investment per cow. If that money was invested at 5% interest, that's a $275 profit per cow, for doing nothing. What would you consider a good profit per cow?.

I don't include the cost of the land at all. It is a completely seperate investment. AND if you believe that your $5,500 in the bank really generates $275 then you need an accounting refresher course. That $275 generates a yearly tax liability of ~$82.5 so you actually only return a net of $192.5. That is a pathetic 3.5% return. If inflation is higher than that you actually LOSE net worth in REAL buying power terms. IF you had bought the 3 acres and did absolutely nothing at all whatsoever with it (other than leasing the hunting rights to cover the property tax liability) you gain (typically 7%) in net worth gain yearly that is NOT taxed at all until you sell out. Lets throw the cost of the cow out of it completely and compare 100,000 in the bank versus a typical investment in raw land. Multiply the 100g in the bank by 5.5% (then subtract 30% in additional state and federal income taxes from that gain each year. All this can be done easily with any computer spreadsheet. In a parallel column multiply that 100g by 7% (the average annual gain in value of raw lands since WWII). Then multiply the result by 7% over and over again. After 20 years the man with money in the bank will have doubled his money and have $212,877.63 in the bank. He has paid the government $48376.13 in income taxes on that money during those 20 years.
The guy who bought the $100,000 worth of property SHOULD in theory have a $386968.45 property. Even if he then decided to sell out and then had to pay capital gains taxes (32% in Alabama I think) he would have $82260.92 MORE (after taxes) than the guy who left his money in the bank all those years. This ignores the fact that the guy with the property has been PROBABLY leasing those hunting rights for 3 to 5 times what the property taxes were. He also has hopefully made some money off of cows, grains, timber, and/or renting trailer spaces on the property AND he has enjoyed the property for those 20 years. To me (while I do like money in the bank) I will take a typical real estate investment over money in a CD all day long and then some.

In this area, land has been appreciating at a quick rate over the last ten years or so, but if land is unable to pay for itself, the profit from appreciation can only be realized if other money is out there to buy the land. This means for land appreciation to exist and continue, there is and will always have to be better investments, or better ways of getting money, than buying land.

In other words, for Bill Gates to make money with land, someone else would have to have the money to buy that land from him. And since those other people couldn't make that money with the land, there would have to exist better ways of attaining money than buying land; which means there would have to exist better places for Bill Gates to put his money other than land.

If those better investment opportunities cease to exist, then land prices will be forced to be what the land can afford to pay for itself. Otherwise, who will buy the land?

I totally agree. Let's take Bill Gates for example. He makes his money from selling software. While his software is the best software in the world, he makes money in absolutely huge quantities. Why would he make the assumption that his software will ALWAYS own that industry? He can't make that assumption. For the future of his family, he has to invest some of those profits somewhere every year. I think history has shown that wealth is created by controlling land, by having knowledge, and by controlling capital. If I were Bill, I would put some of the money he has made through his knowledge into land in a hedge that he and Microsoft won't alway be the best and brightest. The same is true for a doctor or a lawyer or the best darned car salesman in the world. It would be presumptuous to assume that a high income would ALWAYS be there. Since they have more money than they can easily spend, put some of the money into income generating property while you got it, enjoy the tax benefits of farm ownership, and let the wonders of an ever increasing money supply appreciate your property investment for you. Herefordsire for example makes a lot of money as a C++ programmer. It would be arrogant presumption for him to assume that some super genius somewhere is not (as we speak) inventing the technology that will make his industry obsolete. As a hedge against that terrible day, he is buying farmland in Arkansas and is formulating a new sideline business strategy. Dittoe with a guy who owns the best restaurant in town. Two better restaurants may be in the planning stages as we speak. While you have the money, invest it. There may be better investments; but agricultural land will always have value (when 7 billion mouths have to be fed). It won't always appreciate; but recent history tends to suggest that it will more often than it won't.

 

[HerefordSire]

The risk of the markets is in derivatives. Buy tangibles, not intangibles, preferably gold in a fiat currency based economy


1,000,000,000,000: 1 Trillion dollars
1,000,000,000: 1 Billion dollars
1,000,000: 1 Million dollars
$400,000,000,000,000: Estimated total derivative exposure of all banks in the entire world. (20 x U.S. GDP) (up to $400 Trillion?)
$118,000,000,000,000: World Global Capital Markets (Stocks, Bonds, &?) Feb 2005 McKinsey Global Inst.
$75,000,000,000,000: U.S. Govt. unfunded liabilities; social security, etc.
$49,000,000,000,000: World bond market, Fall 2004 PWL Capital Inc.
$46,000,000,000,000: Total World Paper Money supply 2004; from M2 & GDP of EU, USA, Japan, & China (see SSR #56)
$45,153,000,000,000: U.S. Household wealth, as of first quarter, 2004. (Includes Real Estate, and investments)
$37,000,000,000,000: Total global equity market capitalization June 2001 UN.ORG
$21,700,000,000,000: Total global market capitalization of NYSE stocks, Dec '05 http://nyse.com
$21,000,000,000,000: U.S. bond market, Sept, '03: IAPF treas.gov
$12,605,000,000,000: U.S. GDP, 2005 (3Q) http://www.bea.doc.gov/bea/dn/home/gdp.htm
$10,261,000,000,000: M3 (money in U.S. banks) Jan '06 http://tinyurl.com/vra0
$8,249,000,000,000: US debt, 2-23-2006 http://www.publicdebt.treas.gov/opd/opdpenny.htm
$4,000,000,000,000: Total global market capitalization of Tokyo stocks, Dec '05 http://nyse.com
$3,600,000,000,000: Total global market capitalization of Nasdaq stocks, Dec '05 http://nyse.com
$3,000,000,000,000: Total global market capitalization of London stocks, Dec '05 http://nyse.com
$2,622,000,000,000: Total gold mined in all of history, 150,000 T (4.6 bil oz.) @ $570/oz. http://www.gold.org
$2,500,000,000,000: Total global market capitalization of Euronext stocks, Dec '05 http://nyse.com
$2,400,000,000,000: U.S. annual budget 2005
$1,200,000,000,000: Total global market capitalization of Deutsche Boerse stocks, Dec '05 http://nyse.com
$754,000,000,000: Total U.S. paper currency & coin in circulation, March 2005 http://www.fms.treas.gov/bulletin/index.html
$753,000,000,000: Annual U.S. current account deficit (trade deficit) for 2005, (annualized from 1 Q 2005).
$596,000,000,000: U.S. debt increase (true deficit) (Fiscal year '03-'04). http://www.publicdebt.treas.gov/opd/opdpenny.htm
$400,000,000,000: Total silver mined in all of history: 40 billion oz. @ $10/oz. gold-eagle.com/editorials_99/mbutler110799.html
$376,000,000,000: Market Cap of Exxon Mobil (biggest U.S. Corp.) (8-05) http://finance.yahoo.com/q?s=XOM
$286,000,000,000: Debt of General Motors (biggest U.S. car company) Jan 2006
$149,000,000,000: US gold, 261 mil oz., @ $570/oz. fms.treas.gov/gold/
$110,000,000,000: all the world's gold stocks/equities (Sept. 25, 2005, Denver Gold Conference)
$75,000,000,000: Money flowed into Equity funds in the first quarter, 2004
$26,000,000,000: Market Cap of Newmont July '05 (biggest gold company in the world)
$8,226,000,000: all the world's "primary" silver stocks (80 of them on this list, as of June 25, 2004) --my own data.
$7,000,000,000: annual flow of money "lost" in Las Vegas while gambling.
$4,000,000,000: Total annual ATM penalty fees http://redtape.msnbc.com/2005/10/now_even_atm_de.html $13/year per household
$3,500,000,000: 350 mil oz. of "identifiable" silver bullion left in the entire world, according to GFMS @ $10/oz.
$1,300,000,000: 130 million oz. of silver needed by the Barclays Silver ETF: feared to cause a silver shortage by the SUA.
$720,000,000: 72 mil oz. of "registered" NYMEX silver bullion (1-05-05) @ $10/oz. http://www.nymex.com/sil_fut_wareho.aspx
$266,000,000: 40 million oz. of silver purchased for investment, in 2004 at $6.66/oz.
$75,000,000: Limit 7.5 mil oz. of silver @ $10/oz. (limit of 1500 contracts per trader) at NYMEX
$15,000,000: Limit 1.5 mil oz. of silver @ $10/oz. (potential 1 month delivery limit) at NYMEX
$7,500,000: Limit .75 mil oz. of silver @ $10/oz. (over 150 contracts and you must reveal who you are) at NYMEX
$100,000: Limit of FDIC insurance per bank account.
$5,000: Limit of average cash withdrawl from small town banks, without ordering cash in advance.
$300: Limit of average ATM daily withdrawl
$10: Approximate amount of silver available per person in the U.S. at $10/oz., given 300 million oz., if that is available.



http://www.safehaven.com/article-4677.htm



http://cattletoday.com/forum/about32481-0-asc-0.html

 

[Txwalt]

I purchased 25 acres near a friends place that was 48acres. We both put cows on the place for the ag exempt. We became friends with someone who purchased 90 acres in between our places and leased it from him for some work on his place. My friend and I both have full time jobs. We both bought our cows from the same guy and now we keep all our cows together. Around here you can't buy tons of feed anywhere close. For the most part this area does not grow anything but hay. Pretty much animals and hay. For my situation Caustics advice fits. We supplement minerals and have a protein lick. We will rotate the cows on the properties and start trying to be grass farmers. The idea of getting in a bind during a drought does not appeal to me. We probably wont try to maximize the land to cattle ratio. The land for us was not originally bought to raise cattle. It was purchased to get us out of the city. Once I got into it and started figuring in cost for a trailer, squeeze chute, corals, vaccs, and of course purchase of the cows it seemed like the cows were/would be a money pit unless I got a bull. Getting a bull didn't seem to make sense to me for only 2 cows but since my friend had 3 cows and the same problem we decided to put them together and the same neighbor that sold us the cows lent us a bull. Well now instead of just having cows for the ag exempt we have enough land for more cows. Then the neighbor asked us if we wanted to put cows on his place so he could get ag exempt and now we have land for even more cows. So as you can see I fell into this. I enjoy it and take every oppurtunity to learn by helping the neighbor with his cows whenever he asks. I know I rambled on but my point is that Caustics advice seems to fit my geographic location and my time situation. Thanks for the post Caustic.

Walt

 

[TheBullLady]

You have five cows and one bull on 178 acres? :roll:

 

[aplusmnt]

you should be able to but some type of supplemental feed from your local mill for around $40 per ton.
Call them and find out.
Tell them you want to feed out a couple of steers and are looking for the cheapest feed you can find.
SL

Cheapest feed around here I could find last winter was about $145 a ton. That was a soy hull, glutten and corn mix in bulk not bagged. Could have saved maybe another 5 bucks or so if used only glutten instead of corn. Corn was $7.75 a hundred and Glutten was $6.60.

Not sure how many people across the U.S. can find feed for $20 or $40 a ton. But if that is the case I would say it changes the ball game. But I doubt many are finding them kind of supplement prices.

If I could get a supplement for $20 a ton most winters they could just eat stock piled fescue and supplement them with that cheap feed. Only put out hay when it snows.

 

[Caustic Burno]

I purchased 25 acres near a friends place that was 48acres. We both put cows on the place for the ag exempt. We became friends with someone who purchased 90 acres in between our places and leased it from him for some work on his place. My friend and I both have full time jobs. We both bought our cows from the same guy and now we keep all our cows together. Around here you can't buy tons of feed anywhere close. For the most part this area does not grow anything but hay. Pretty much animals and hay. For my situation Caustics advice fits. We supplement minerals and have a protein lick. We will rotate the cows on the properties and start trying to be grass farmers. The idea of getting in a bind during a drought does not appeal to me. We probably wont try to maximize the land to cattle ratio. The land for us was not originally bought to raise cattle. It was purchased to get us out of the city. Once I got into it and started figuring in cost for a trailer, squeeze chute, corals, vaccs, and of course purchase of the cows it seemed like the cows were/would be a money pit unless I got a bull. Getting a bull didn't seem to make sense to me for only 2 cows but since my friend had 3 cows and the same problem we decided to put them together and the same neighbor that sold us the cows lent us a bull. Well now instead of just having cows for the ag exempt we have enough land for more cows. Then the neighbor asked us if we wanted to put cows on his place so he could get ag exempt and now we have land for even more cows. So as you can see I fell into this. I enjoy it and take every oppurtunity to learn by helping the neighbor with his cows whenever he asks. I know I rambled on but my point is that Caustics advice seems to fit my geographic location and my time situation. Thanks for the post Caustic.

Walt

The trap that most get in is listenig to you are going to make a fortune in cattle.
The national average for profit for a cow is a 100 dollars a year in a well run operation.
I don't know about the average herd in the nation T A&M published a paper a few years ago the average herd was 20 head in Texas.
With those numbers you make 2000 dollars profit that was with a 100% calf crop which is not reality 90% is ,so your 2000 dollar profit is now 1230 dollars on 18 cows. They had to pay the upkeep on the two that didn't generate a dime.
Twelve hundred bucks a year is not going to pay the land note the set up cost or the tractor note.
If you want to live the lifestyle and consider the above mentioned cost as getting the life style. You can get old Belle to pay the mantainence if you operate as a cattleman.
You will here your land is appreciating in value not unless you sell it the only thing appreciating is the tax liabilty going up each year.
People say the land is an investment not unless you plan on selling it it is a liabilty to be maintained.
It take's a dollar a day to maintain Old Belle running the operation like a cattleman you can get her to pay the taxes the upkeep on fence, fuel and fertilizer and put a few frog hides in the old billfold.

 

[Stepper]

Brandonm2,

I am very impressed with your investing knowledge. So let me ask your opinion about this. What are your thoughts about putting money into 401k plans verses investing that same money into agriculture land ?

And to i am a little lost as to what you were talking about earlier as to wether or not pine timber is a worth while investment ?

 

[Caustic Burno]

The thicket also supports a wide variety of animal life and is especially noted for the many species of birds, around 350, that either live in the area or visit annually. The abundant rainfall and the long growing season, around 246 days, ensure that vegetation and all the animal life that depends on it thrive.

Do you have wild (feral) hogs?

I imagine you do, but if not you can certainly come get some of mine!!!!!!!

Dun knows I am ate up with hogs the crusty old Cattlemen is trying to poke a stick through the fence.

 

[Txwalt]

The trap that most get in is listenig to you are going to make a fortune in cattle.
The national average for profit for a cow is a 100 dollars a year in a well run operation.
I don't know about the average herd in the nation T A&M published a paper a few years ago the average herd was 20 head in Texas.
With those numbers you make 2000 dollars profit that was with a 100% calf crop which is not reality 90% is ,so your 2000 dollar profit is now 1230 dollars on 18 cows. They had to pay the upkeep on the two that didn't generate a dime.
Twelve hundred bucks a year is not going to pay the land note the set up cost or the tractor note.
If you want to live the lifestyle and consider the above mentioned cost as getting the life style. You can get old Belle to pay the mantainence if you operate as a cattleman.
You will here your land is appreciating in value not unless you sell it the only thing appreciating is the tax liabilty going up each year.
People say the land is an investment not unless you plan on selling it it is a liabilty to be maintained.
It take's a dollar a day to maintain Old Belle running the operation like a cattleman you can get her to pay the taxes the upkeep on fence, fuel and fertilizer and put a few frog hides in the old billfold.

While I don't expect to make a lot of money off of the cows I do expect to make something. In the short term I know I'm going to lose for the next 2 or 3 years. I've got a deal to trade bull calves for replacement heifers. I havn't done it yet but I'm hoping to be able to pic and choose to some degree. I noticed I got the :roll: from bull lady. I'm stocking cows as fast as I can wich will be a slow trickle. An old rancher told me to snatch up whatever leases I could and worry about getting cattle on it later) I just don't have the money on hand and can't see going into debt to buy additional cows. As I mentioned I fell into this and I don't have thousands of dollars to jump in, I just fell. I don't see 3 in 1's here but I do see cow calf pairs at auction and would like to buy some real soon. Our current goal is to get our herd up to 20 then put a charlais bull on them for a terminal cross. We could buy replacement heifers from the neighbor (He raises mostly red brangus but has one herd with a herford bull on them, I would like to get some f1's from him but havn't talked specifically about that yet). We currently have a red Brangus bull on our mixed but mostly red brangus cows (2 are red brangus 2 others have some herford and one is quarter simmental). What do you think Caustic? I know its a small time operation but I do want to maximize profit on it.

Walt

 

[Caustic Burno]

Walt hard to go wrong with Brangus cattle in East Texas.
If I could run the perfect herd for my area it would be hereford cows with a Brangus bull. Char and Brangus is a hard combination to beat they grow good and sell good with a lot of pounds.

 

[KNERSIE]

Walt hard to go wrong with Brangus cattle in East Texas.
If I could run the perfect herd for my area it would be hereford cows with a Brangus bull. Char and Brangus is a hard combination to beat they grow good and sell good with a lot of pounds.

I would have expected it to be the other way round, would have thought brangus cows, hereford bull.

 

[novatech]

F-1 Braford with an angus bull, or Char.

 

[Caustic Burno]

Walt hard to go wrong with Brangus cattle in East Texas.
If I could run the perfect herd for my area it would be hereford cows with a Brangus bull. Char and Brangus is a hard combination to beat they grow good and sell good with a lot of pounds.

I would have expected it to be the other way round, would have thought brangus cows, hereford bull.

Have you ever dealt with Brangus cows? They come in two models hot and getting hotter. Easier to deal with one.

 

[novatech]

Walt hard to go wrong with Brangus cattle in East Texas.
If I could run the perfect herd for my area it would be hereford cows with a Brangus bull. Char and Brangus is a hard combination to beat they grow good and sell good with a lot of pounds.

I would have expected it to be the other way round, would have thought brangus cows, hereford bull.

Have you ever dealt with Brangus cows? They come in two models hot and getting hotter. Easier to deal with one.

I think we look at these breeds with a new perspective when can,t get over a fence like we used to. :lol: :lol:

 

[Caustic Burno]

Walt hard to go wrong with Brangus cattle in East Texas.
If I could run the perfect herd for my area it would be hereford cows with a Brangus bull. Char and Brangus is a hard combination to beat they grow good and sell good with a lot of pounds.

I would have expected it to be the other way round, would have thought brangus cows, hereford bull.

Have you ever dealt with Brangus cows? They come in two models hot and getting hotter. Easier to deal with one.

I think we look at these breeds with a new perspective when can,t get over a fence like we used to. :lol: :lol:

True very true and it hurts worse than it used to as well.

 

[WORANCH]

Everyone needs to read this link . And it doesn't matter what breed you insert .it should apply to all .

http://www.lasaterranch.com/2002_sum_news.htm

 

[3MR]

I have tagged my newborn calves with Brangus moms in the pasture. With no problems. I have even tagged them in the pasture up to a couple weeks old where I had to rope the calf first to catch it. As soon as they heard the calf bellow the mommas come running over and get within a few feet of your face bellowing, but they stop short. A couple have licked the calf. I just keep one eye on them and one eye on the calf. As soon as I release the calf they are both fine again. The calves dont even really run off more than a few feet.

Im not saying they are all like this, but at least mine are.

Of course the straight Angus mommas do the same thing, but are just as likley to lick me as to lick the calf. Now that can get annoying.

 

[KNERSIE]

Walt hard to go wrong with Brangus cattle in East Texas.
If I could run the perfect herd for my area it would be hereford cows with a Brangus bull. Char and Brangus is a hard combination to beat they grow good and sell good with a lot of pounds.

I would have expected it to be the other way round, would have thought brangus cows, hereford bull.

Have you ever dealt with Brangus cows? They come in two models hot and getting hotter. Easier to deal with one.

I have no experience with brangus, but have experience with brahman. I can see your point, thought you needed a bit of ear in your environment.

Where would the biggest advantage be with a bit of brahman influence? In the cowherd or the calves?

 

[CUZ]

Since this has become kind of a catch-all cattle discussion, can someone explain to me why 205 days is the magic number? I constantly am reading about calves at the 205 day mark. I figure 205 days = about 6 months and 3 weeks. What makes 205 better than, say 212?

Thanks
Cuz