start up plans, suggestions needed

[Schram]

Hello all. My name is Jon and I live in Northeast Nebraska. My wife and I are looking into starting a small operation on our land. We have previously been purchasing Holstein bottle calves from a dairy that my father-in-law works for. What we had been doing is buying 5-6 bottle calves at a time and raising them on his land with his facilities. He raises 250-300 steers/year, but has not been bottle feeding for about a decade. He just purchases weaned calves from local farmers and feeds them to 600-800lbs and sends them to the lot. He has been getting a good deal on feed from the dairy and uses their equipment (payloader, etc) when needed because he lives about a mile away.

This last summer we purchased a small farmstead (roughly 10 acres, 7 or so which are pasture that has been hayed for the last decade or so). We have a 45' long cement building with about a 14' overhang that is covered and fenced in for calves with a rough texture concrete floor. We are planning on buying 10 bottle calves at a time, and getting 10 more when they are weaned or nearly weaned. We don't want to bottle feed during the winter, so we are only planning on sending 40-50 to the salebarn each year. Utilizing some equipment from her old man to get started we will have about $200-225/head to get them weaned and on pasture. Hay won't be a problem for us right now, but we will be buying our grain, at least for the time being, commercially from the local farm store. We have the pasture fenced in (4 strands of red brand in July) but no divided yards at this time.

We have a pretty good idea what goes into raising Holstein bottle calves to 600ish pounds, but we are unsure what else would make us more efficient and where we need to move from here. One big difficulty for us is what to invest in the next 2 years or so. We would love to have an efficient yard set up that we see on many local farms with headgates, squeeze shoots, and divided yards, grain bins, but not sure where we should be putting our money when it comes in most efficiently. We have 1 heated cattle waterer at this time and 1 20' concrete bunk that I need to bring over from the FIL. We also have a 3/4ton and an old Ferguson TO-30 tractor (no loader). My uncle also runs an ethanol plant, and could probably get distillers grain significantly cheaper by the load than most folks.

Things that we would like to have/need to have that we don't currently posses. Stock trailer (have access to a 20 or 24' bumper pull trailer, but free use isn't going to last more than a year or 2), flatbed trailer to haul bales, gates and fencing to divide our meager pasture, grain storage, misc equipment (bottles/nipples, bander, vaccination equipment can be borrowed this season--but we are going to need our own stuff in a year or so), another waterer with underground water lines run, more feed bunks, tractor with a loader, etc, etc.

So what I am asking is how we should invest our money wisely on purchases that will make our jobs easier/more efficient/profitable right now. For example, I'd love to buy a 24' gooseneck stock trailer right now but I have access to a trailer for at least a year. I'd love to get the yards set up right now, but we will have so few cattle on pasture this year that it seems a waste to invest this spring. We do have some money to invest into the venture, but it is not limitless by any means. I'd rather have the farm income be totally separate and insulated from our regular income by making the farm venture self sufficient as quickly as possible. The farm needs to make money in order for us to justify the hassle, but we are not planning on it for income to survive on.

With the information I outlined above does anybody see anything that I should absolutely start with? I know we are eventually going to need everything/most of the things I mentioned. Anything that makes me money (or life easier) this year is better then something that makes me money 3 years from now.

Thanks for all the suggestions and I really enjoy poking around the board.

 

[backhoeboogie]

You start out insinuating you want to get your feet wet.

You go on to say this will not be your primary income.

Then you talka about tractors and trailers and equipment that will cost several cows to pay for.

Bottle calves are an education. Sickness can wipe you out if you do not keep ahead of the game.

Think I would start on a smaller scale if I were you just to test the water. Then decide if you really want to do this. Lots of stories about people wanting to get into roping stock and what not. "bought 30 bottle calves and lost them all...."

Be careful. There's people right here in this forum that can tell you horror stories with bottle babies.

You could say I have always been lucky. Daddy did bottle calves back in the early 70's and it was quite an education for me. I have done several since. Prefer grafting beef babies to nurse cows now.

 

[backhoeboogie]

I would have banamine and nuflour on hand before I bought the first calf. You can only get those by prescription here. Over the counter meds do not cure pneumonia and it can take your whole opertion if it breaks out.

 

[Schram]

backhoeboogie: I guess I probably didn't outline what exactly we were getting into the industry for. My wife grew up raising Holstein bottle calves as her family owned a dairy (now gone). My family raised maybe 5-8 bottle calves, various breeds, growing up...but we really didn't know what we were doing at that time. We are now looking to make a little money and raise some beef for our own freezer. My wife's father has a small to midsized operation that we have been raising bottle calves on and making a small (gross) profit on ranging from $1.5-5k per year.

Now that we have our own place, and jobs that allow us the free time and financial security, we want to start doing it for ourselves. I'd like to maybe gross $12-15k/year once we get up and rolling. Enough that we can shovel some into retirement and pay off some rentals we own (which comprise of about 50% of our current assets at this time). We are both fairly young; 27 & 28 years old. We would both like to retire from our current jobs in about 15 years, where we could farm "full time" as supplemental income.

Taxes are a major issue for us at this time, as 28% anything we make beyond expenses on the farm is going to go to Uncle Sam...part of the reason I brought up future acquisitions. Making some money here would allow me to put more into my work retirement, and come out with the same dollar amount at the end of the year. I'm OK with buying a tractor that costs several cattle to pay for if at the end of the day I have a tractor that takes some of the effort out of the work...but don't want to get in too heavy too soon.

The only way this works for us is for the farm to be self sufficient within a year or 2. I know too many friends that have dumped their life savings into cattle and got burned to wager much of my own income in this venture...hence the questions.

Most vaccinations/medicine will be pretty available to us, and just down the road. Her dad has been raising cattle for 40 years and is about 15 minutes away, so we will lean on him a lot during the first year going "solo". The local vet lives about 5 miles from me and hunts with me, so I think that will be a major asset for us as well. Thanks for the suggestions.

Honestly, I'm leaning on letting it run a year with what we have and see how it does. If it appears economically feasible, then go from there. I just don't want to short change ourselves if there were several things we could do right now that would have immediate returns.

 

[backhoeboogie]

Sounds like you have several things going for you. Your wife has experience with it and she is not pulling away from it. That means a lot. Many who have done it would never do it again. I don't know why either but that's just how it is. Not a problem for you.

Tractors and equipment can be depreciated. It seems that every CPA has a different opinion and some are willing to do things differently from others. If you have a CPA, I would talk to him. If you don't have one, I would seek one. They're expensive from some's perspectives but they are worth every penny they charge.

Having access to a vet is huge. He being a personal friend makes it even better. That gives you access to things you need in an emergency. A huge plus. Something a lot of folks don't have.

Keeping costs down is always a challenge. I estimate it will cost $1.50 per day, per calf. Could be more and I have not bought milk replacer in 10 months. There is profit to be made. Having a good market could be a plus for you.

I would suggest you give it a try with the assets you have. Make a profit. Then decide if this is something you would like to continue doing.

Pens and shelter can get into expense too. Facility cost is a one time expense unless you modify or expand. Know what you want before you construct. Isolation capability, even in a dog kennel, can make a huge difference if you have a sick calf. You need to have the facilities to cope with injuries and isolation, before you need them.

 

[ChrisB]

With access to dairy steers and already having some experience with them, that is the way I would go. Calf huts will keep the calves healthy and help reduce any problems spreading to other calves. I would get as many of them as you want to feed. After weaning you can move the calves to a group pen, disinfect the huts, move them to a new location and get ready for another group.

Weaned Holstein calves can go right on a high energy diet. With your location I would think you could buy corn from a neighbor. Check into the different dairy steer programs most feed companies have and mix their protein pellets with whole shelled corn either in a stuffer or hand fed. Maybe corn stalks for bedding/roughage. Take them all the way to finish if you have room.

Don't bother with a trailer yet. If your just buying baby calves build a crate that slides in the back of your pickup and lift them in and out. Hire a neighbor to haul them to the sale barn when they are bigger. If you sell in groups of at least 10 the cost for trucking per head won't be worth the cost of owning a trailer. I have a trailer and still hire a lot of my trucking done.

With steins you don't need all the pasture either so no rush on that. Cheapest though for a feedlot situation would be several strands of hi-tensile, not sure what people use for a feed pen but maybe 7 strands? With one waterer you can have at least 2 bigger pens, maybe 4 if you get creative.

If your tractor has a 3 point you should be able to at least be able to handle bales. For a little more money you can probably have a neighbor deliver any bales you buy and unload with their tractor. A used headgate at the end of a wooden alley way would work fine for a long time but a couple 6' gates hanging off the headgate posts would be better. You can get by a long time without spending money on big ticket items. Keep reinvesting profits into the number of calves you raise each year.

The biggest question to me would be how to handle manure. Maybe rent a skidsteer a few times a year and stack it somewhere and have it hauled by a neighbor for the cost of manure? Or at worst buy/borrow a spreader and spread it on their fields.

Good luck!

 

[Schram]

Thanks again Backhoeboogie. One of the things I had not considered seriously enough was isolation. I downloaded Google Earth and partitioned my lot off. Looks like I should be able to build a small pen for sick calves that will be about 1/4 of a mile from the main pasture and quite close to the garage.

ChrisB: My thinking is very similar to yours. I think there is money to be made from bottle calves short term that would allow us to get in the game. You made some very good points on equipment that we will have to review and work in with what we have. I probably don't have the room to finish them here, but I might be able to hang on to a couple batches of calves beyond 1,000lbs without our small pasture becoming a mud pit. I think the neighbor would take the manure away to be spread if we would load it up (no loader on the tractor right now...but I could use a blade to get it all in one area at least).

Thanks again everybody!