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So it begins...

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Silver

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I think a lot of people make the mistake of thinking they need to own a bunch of land to ranch. If I were just getting into it I'd be looking for land to control and own very little of it to start with.
I am also fortunate to be a third generation rancher. I wasn't given to me but I got a discount. I think. I spent a lot of years making improvements that I almost couldn't afford to buy lol.
I hate it when people tell me something along the lines of " oh well you're ranching, that's a way of life not a business". In fact I tend to snap. It's a business like any other with expenses and income. I have no other sources of income anymore, so this business sustains me and my family.
 

gcreekrch

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The feedlot we have put cattle in the last couple years grows their own feed. They sell it at a profit and charge 55 cents per day yardage. The yardage includes bedding. Not sure how many cattle you would need to feed to pay a tractor and tmr wagon and cover bedding costs if the owners of the cattle were providing the feed.
 

504RP

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I think part of my problem with farming is that i am getting tender hearted !!! Lol !!!

I have just enough cows ( 29 ) that i am not making much off of them as it is. And because i feel sorry for them i spend most of what i make trying to take care of them the best i can !!! Lol ! Isn't that silly ?
 

Dave

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I have neighbors with considerably less than 500 cows that make a living with no outside income. In fact I can't thing of a single one of the ranches here that have any outside income. The man with the most cows in this small valley inherited absolutely nothing but the ability to work. And work hard he did and still does everyday. I like a comment he made to me when a hired man quit. He said, "I was in business before he came here and I will still be in business long after he is gone." It is a business pure and simple. Operate as a hobby or life style and you will make hobby and life style money. Operated as a business it will pay considerably different.
 

C-Ranch

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@Dave..I couldn't agree more. We have made many improvements, but only do so if the ranch has a good year and books are in order. I have outside income(military retirement) but work the ranch 24/7. It's hard to find help and the ones that want to help are normally the old timers (well older than me..haha) and a few young kids. The majority want an 8-5 job so they can work inside, so they are cool in the summer and warm in the winter. So I like the "quote' the old man told you. A lot of truth to his statement..;)
 

Lucky

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When people talk about running cattle for a living and not being able to make it I wonder if they mean living off 1 or 2 calf checks a year and nothing else? Everyone I know living off ranching does some sort of ranch related work on the side for extra income. For example build fence, bale hay, sell hay, pasture spraying, tractor work, horse training/selling, sell bulls, or something along those lines. I can only speak for this area but even running 500-800 head around here would still leave time to work extra during the year. Most guys feed and tend cows from Dec - April then start on the side work through the spring and summer.
On another note as many have said on here, once you start treating the cattle like an actual business it’s much clearer how to make money at it.
 

HDRider

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Just got done renewing a lease and the land owner was trying to go up on me because we... "are making so money on beef." Said beef prices had jumped in the store and they were selling out so we had to be making more.🤦‍♂️ Guess I understand what a trigger word is now. He got an ear full from my soapbox. I told him if he would like to lease based off all the profit we are making I'd take that deal all day long.

This made me realize we, as producers, are not doing a good job of getting the word out to people how the business really works.
I have been beating that drum for a while.
 

Dave

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So I like the "quote' the old man told you. A lot of truth to his statement..;)
The old man isn't all that old. In fact he is 19 years younger than me. I am 69. He was raised on a poor scab rock farm along with 10 siblings. There was nothing to inherit. But he learned how to work.
 

C-Ranch

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The term "inherit" or "passed down" is sometimes viewed as "free". When in reality there are usually siblings which don't have any desire to work or run the farm/ranch, but they want compensated financially. Therefore, in most cases the next generation who decides to stay often face the burden of paying everyone off.
 

Dave

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The term "inherit" or "passed down" is sometimes viewed as "free". When in reality there are usually siblings which don't have any desire to work or run the farm/ranch, but they want compensated financially. Therefore, in most cases the next generation who decides to stay often face the burden of paying everyone off.
True. One of the best plans I have heard of was early on the stay on the ranch person bought a life insurance policy on the parents naming the non staying person as the beneficiary. The amount was agreed to early on. If the value of the ranch had increased, well the stay there and work person contributed to that.
 

C-Ranch

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True. One of the best plans I have heard of was early on the stay on the ranch person bought a life insurance policy on the parents naming the non staying person as the beneficiary. The amount was agreed to early on. If the value of the ranch had increased, well the stay there and work person contributed to that.
Not a bad idea, save a lot of money and even some squabbling.
 

504RP

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In my location lease land is hard to come by. When and if you find any. Most wont give you a signed lease. Most of the land you find is bad condition from the fencing, soil condition, ph, needing lime things that is going to take two years in order to get it in good enough condition to grow descent forage etc..., in order to run cattle on. And i don't care if they are family or your priest once you get back in working order. They most of the time are going to take it back.

Even when you can get a land owener to sit down with a lawer present and the two of you work out a legal agreed up on lease you can still have problems.

Example i have one legal written lease on 65 acres. Good for 5 years. I had to build a quarter mile of fence. Spent $1500 runing a water line for a back up water supply because the creek that runs across it and pond sometimes runs dry in the summer.

The place was covered in black berry vines , not to mention all the other brush. I should have had my head examined for ever considering leaseing it.

The owner was 74 years old was brush hogging it with a little 4 foot brush hog doing the best he could. Was tilked to death that i would be willing to lease it.

Had to haul in 5 semi loads of lime and i can't remember how many semi loads of litter.

It wasn't a year that the old man informed me he was going to let his son in law and daughter build a new house on it. They fenced off 5 acres right in the middle of it. They now have 4 horses that arent broke to ride. One is a stud the other 3 mares. Looking for some minuture hores for the grand kids.

The old man is happy as a lark and has told me more than once he wants to renew out lease a year from now when it runs.

I haven't told him yet but it's no happening.
 
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I don’t post much, but will chime in here. Realistically, for most people starting out, I don’t think traditional ranching operations will ever pencil out if you truly start from scratch. I think innovators can always find a way, but traditional operations as a new start up just have a hard uphill battle. Of course, with inherited land, equipment, etc, that would change the equation.

I retired from the Coast Guard about two years ago, and bought a farm just down the road from my dads farm, and across the road from my late grandfathers farm. Despite the family farms being on this road, I bought my land, it’s never been in the family, and started from scratch. Working by myself I spent about a year clearing fence remnants that had been last replaced and cleared when my 68 year old dad was a senior in high school. The farm had been cropped for at least the last 30 years, and the soil was in rough shape. I had no equipment when I started and realistically, I couldn’t get by with older stuff...I tried for a bit but the breakdowns when my farm work is on a schedule was making it impossible. By the time I bought a tractor, cattle trailer, hay equipment, fencing (I did pay to have the fence built, great decision), pasture seed, soil amendments, I’m well over 100 grand. I did buy some very helpful but unnecessary items (used dozer, built a shop, grapple, etc...) that I could’ve done without but chose not to, probably another 60k there.

I paid 3k an acre for my small 80 acre farm, so about 240k before any interest is figured in. So that’s close to half a million-before the first cows came to the farm.

Granted, I could’ve skipped the hay making decision and just purchased hay, that would’ve certainly saved me short term, but long term for my set up I think it works.

So as it stands most of my retirement income goes to pay for me to raise cattle. Will I eventually be profitable? Yes, in a way. I probably would’ve bought a farm anyhow so cows or not I’d have a land expense. But being realistic financially I’d be FAR better off to just invest money and kick back.

So for me, why don’t I kick back and do something else? Because I like being a farmer/rancher. My family has always been in cattle, and I always wanted to raise them once I finished my military career. I think the real profit for me is that with any luck this money pit will be paid off by the time I kick the bucket and hopefully my children will have the option to pick up wherever I leave off and actually get the advantage of being able to have a non-startup farm. I will have borne the financial burden and they can enjoy the benefits of it. For me that’s the profit.

I used to be a bit skeptical of folks saying there isn’t any money in cattle. Now I marvel at how foolish I was to not take them seriously 😂
 

C-Ranch

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Money in Cattle!? There's tons of money to be made it's the next get rich quick fad didnt you know. 🤣

Keep up the good work, everything will work out and your kids will enjoy it for years to come.
 

RDFF

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Or fight over it between themselves... Always see plenty of that when it comes down to it. That "insurance policy" idea doesn't sound like too bad of a solution! Stay on the ranch person contributed to the increase in property value both by working there AND by paying for the insurance policy that's to be an inheritance for the non-stayer. Best to get that all worked out well ahead of time though... getting one on somebody in their older years gets pretty spendy!
 

504RP

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I don’t post much, but will chime in here. Realistically, for most people starting out, I don’t think traditional ranching operations will ever pencil out if you truly start from scratch. I think innovators can always find a way, but traditional operations as a new start up just have a hard uphill battle. Of course, with inherited land, equipment, etc, that would change the equation.

I retired from the Coast Guard about two years ago, and bought a farm just down the road from my dads farm, and across the road from my late grandfathers farm. Despite the family farms being on this road, I bought my land, it’s never been in the family, and started from scratch. Working by myself I spent about a year clearing fence remnants that had been last replaced and cleared when my 68 year old dad was a senior in high school. The farm had been cropped for at least the last 30 years, and the soil was in rough shape. I had no equipment when I started and realistically, I couldn’t get by with older stuff...I tried for a bit but the breakdowns when my farm work is on a schedule was making it impossible. By the time I bought a tractor, cattle trailer, hay equipment, fencing (I did pay to have the fence built, great decision), pasture seed, soil amendments, I’m well over 100 grand. I did buy some very helpful but unnecessary items (used dozer, built a shop, grapple, etc...) that I could’ve done without but chose not to, probably another 60k there.

I paid 3k an acre for my small 80 acre farm, so about 240k before any interest is figured in. So that’s close to half a million-before the first cows came to the farm.

Granted, I could’ve skipped the hay making decision and just purchased hay, that would’ve certainly saved me short term, but long term for my set up I think it works.

So as it stands most of my retirement income goes to pay for me to raise cattle. Will I eventually be profitable? Yes, in a way. I probably would’ve bought a farm anyhow so cows or not I’d have a land expense. But being realistic financially I’d be FAR better off to just invest money and kick back.

So for me, why don’t I kick back and do something else? Because I like being a farmer/rancher. My family has always been in cattle, and I always wanted to raise them once I finished my military career. I think the real profit for me is that with any luck this money pit will be paid off by the time I kick the bucket and hopefully my children will have the option to pick up wherever I leave off and actually get the advantage of being able to have a non-startup farm. I will have borne the financial burden and they can enjoy the benefits of it. For me that’s the profit.

I used to be a bit skeptical of folks saying there isn’t any money in cattle. Now I marvel at how foolish I was to not take them seriously 😂
Sounds like your happy ! Bottom line thats the main thing.
 

farmerjan

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We also have gotten to the point of not catering to landowners that seem to think we are a bottomless well and their land is just the very best...... if they keep wanting to go up, go right ahead.... find someone else. We try to give them a fair price and do what we say in upkeep. Not going to do all this extra and then lose it the next year when someone tries to lease it out from under us and offer more money. We have adjusted our numbers to what we have to graze, and a few less cows gives us longer/more grazing if we have a good year. Have had a few places that we lost, the owners come back after a few years and practically beg us to come back.... most we refuse because they would require way too much time/money to bring it back to where it was. 20 years of taking care of a place can get run down in a few years of not feeding the ground....fences not taken care of, bush hogging the weeds off yearly, and things like that. Tired of trying to take care of people's land that only see the $ they get paid. We also had one come back, that the place had been leased, overgrazed, then no one put cattle on it, and the new people to lease it never signed their land use papaers required for the tax breaks. Told them that the only way we would come back would be that we wanted a 20 year lease this time, and that we would use chemicals to try to get the autumn olive and weeds back under control. They were die hard "orgainc nuts" ..... and I am a big believer in as little chemical use as possible..... and they agreed because the place had gone to he// in 3 years of overgrazing, then no grazing, no bush hogging, nothing. Ridiculous.
 

HDRider

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True. One of the best plans I have heard of was early on the stay on the ranch person bought a life insurance policy on the parents naming the non staying person as the beneficiary. The amount was agreed to early on. If the value of the ranch had increased, well the stay there and work person contributed to that.
My wife worked with financial advisers in Illinois. Big farms there. It was very common for them to put a lot of money into life insurance policies. Folks should figure this out on their own, or talk to an advisor.
 

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