thinking of getting into the biz

[Anonymous]

I am thinking of getting started in the cattle business, but after reading this board, I'm a bit discouraged. I by no means expect to get rich quick, nor do I intend to do more than have fun for the first several years, but it seems pretty bleak monetarily. I was planning on buying 4 bred cows in a few months. When it comes time to sell the calves, I had planned on taking that money and putting it into buying more bred cows, and breeding back what I alredy have. Slowly, I could build a herd. I understand I'll have losses, abortions, sicknesses, low times in the market. I also know that I can't sell a calf and pay even money for a bred cow, but I thought I'd make enough to be able to use it to build what I have. Now it seems like I'll have to use all but $75 dollars just to take care of my existing operation. I don't really care if I can supplement my income or not, but I don't want to have a small hard in 15 years. I'd like to build it. I have lease land at a reasonable price, and a very close friend in the cattle buying business. Should I be this discouraged?

 

[dun]

I am thinking of getting started in the cattle business, but after reading this board, I'm a bit discouraged. I by no means expect to get rich quick, nor do I intend to do more than have fun for the first several years, but it seems pretty bleak monetarily. I was planning on buying 4 bred cows in a few months. When it comes time to sell the calves, I had planned on taking that money and putting it into buying more bred cows, and breeding back what I alredy have. Slowly, I could build a herd. I understand I'll have losses, abortions, sicknesses, low times in the market. I also know that I can't sell a calf and pay even money for a bred cow, but I thought I'd make enough to be able to use it to build what I have. Now it seems like I'll have to use all but $75 dollars just to take care of my existing operation. I don't really care if I can supplement my income or not, but I don't want to have a small hard in 15 years. I'd like to build it. I have lease land at a reasonable price, and a very close friend in the cattle buying business. Should I be this discouraged?

The realistic way to look at it is that if you manage tightly, have quality animals, do most of the work yourself, your net profit per cow will be in the $50-%75 profit per cow.

dun

 

[jt]

I am thinking of getting started in the cattle business, but after reading this board, I'm a bit discouraged. I by no means expect to get rich quick, nor do I intend to do more than have fun for the first several years, but it seems pretty bleak monetarily. I was planning on buying 4 bred cows in a few months. When it comes time to sell the calves, I had planned on taking that money and putting it into buying more bred cows, and breeding back what I alredy have. Slowly, I could build a herd. I understand I'll have losses, abortions, sicknesses, low times in the market. I also know that I can't sell a calf and pay even money for a bred cow, but I thought I'd make enough to be able to use it to build what I have. Now it seems like I'll have to use all but $75 dollars just to take care of my existing operation. I don't really care if I can supplement my income or not, but I don't want to have a small hard in 15 years. I'd like to build it. I have lease land at a reasonable price, and a very close friend in the cattle buying business. Should I be this discouraged?

The realistic way to look at it is that if you manage tightly, have quality animals, do most of the work yourself, your net profit per cow will be in the $50-%75 profit per cow.

dun

dont try to translate that into an hourly rate, or you might really be discouraged, if it is the money thing that is bothering you.. but, on the other hand, if you like it, the money wont matter.

jt

 

[hillbilly]

MM,
Don't be discouraged at all.
Don't get into this business to make you 1st million either.
I think you have a pretty good plan going, that is an important part of this business, planning.
Don't get too stuck to a plan though, be flexible.
You are buying into a way of life, most everybody on here is in it for the love of the way of life, not the money.
Good luck,

Hillbilly

 

[Jake]

I would also say, that if you have good heifer calves save them back instead of buying new bred cows, bred cows or 3 in 1s take too long to pay themselves off. (3-4 years usually)

Have fun with it and if your not worried about the money then you should have a blast.

 

[Craig-TX]

You should be commended on having the patience to build slowly and therefore avoid debt. There is nothing like performing assets that are free and clear. You will sleep much better through the inevitable price swings and market cycles.

Don't forget to factor in the tax benefits. You will be able to expense and depreciate many costs and equipment purchases on your income tax.

Buying bred cows (not heifers) or pairs would be a good way to start. I would buy less than top-of-the-line cows. As long as they are sound they will do fine if they have plenty to eat. It sounds like you will have plenty of grass and you will be in the money much faster than paying a premium for papers or fancy stock.

Craig-TX

 

[Dave]

It sounds like you have a good plan to get started. If you don't quit the day job and keep your costs down you will be suprised how fast your herd will grow. Every winter I buy bred cows for less than what I sold calves for in the fall. This last winter and spring with cow prices as high as they are I bought 15 cows (they all have calves now) and I am only in to them $520 a piece. Be patient and you don't have to buy the fanciest cow at the sale. Those middle of the road bred cows in the winter when others aren't wanting to buy cows will generally work real well. I almost always sell all my heifers in the fall because I can generally buy bred cows for the same money if I am patient. Good luck. Learn as you go and enjoy the time you get to spend with it.

Dave

 

[Rod]

I've been in about a year now and am finally ready to sell my first group of calves. This is my first post in about two months due to my impatiance to start out small as you are planning. I go to the farm before I go to work and have to go back after work until dark. If you are not carefull in how many head you have on hand you can create for yourself another full-time job.I have learned a whole lot from this board and I also have learned more from the school of hard knox. I would be more than happy to sum it all up for you if you sometime if you wish, feel free to reply.

 

[TXBobcat]

I would be more than happy to sum it all up for you if you sometime if you wish, feel free to reply.

Sum it up for us. I would like to hear of your experiences the 1st year. What would you do different? What would you keep the same, etc, etc? I'm sure others would like to know and might benefit as well.

 

[Devin]

MM,
You got alot of good responses on your post. I agree you should keep debt to a minimum and buy bred cows (somewhere around the middle in quality). If you own your own bull or are planning on it, that is where I would put some money. You can then keep your best heifers as replacements. You have leased land and that is a great way to start. Good luck and let us know how it goes.
Devin

 

[MM]

I appreciate all the replies, I feel better about it. I have always enjoyed working with cattle, the little I've done. If anyone needs help in the N. Texas area working, I'd be glad to help just for the experience. just email me and let me know. Thanks again.

 

[Running Arrow Bill]

Welcome MM!

Erase from your vocabulary such negative terms as cattle losses, deaths, sickness, etc. With healthy, quality stock from the onset that are properly cared for your losses (if any) should be negligible. While it can take a couple of years for a "3 in 1" package to develop, it is still a bargain in cattle purchases.

Pay as you go...your assets will multiply fast and you won't have debt. Breeding stock is a depreciable asset. Calves you raise from your breeding stock are considered "gains" and sales of them are taxable (less expenses of your operation).

Do your arithmetic: Project females offspring over a 2-5 year period, only selling your bulls you don't want to keep. Will be amazing how fast your herd will grow.

I started off with 2 three-in-one packages of Registered Longhorns. One package was a fence crasher and went to sale barn. The other package has produced 3 calves which sold for 5X the cost of that package. Still have cow and 6 mo old calf that I expect to sell them for minimum of 5X what I paid for the original mama. Over 3 years dealing with quality registered longhorns, our herd has grown from one cow & calf to about 29. Every female is producing a healthy live calf (did have one rare breech birth stillborn). Still buying better breeding stock...selling some of offspring and occasional breeding animal. No debt of any significance. We start breeding our females at 14 months to have first calf by 2 yrs old, then a calf every year. We sell our "beefy" type longhorn yearling bulls as sires for commercial cross-breeding. A bull that doesn't measure up otherwise (stuff happens, right?) we put in freezer (also will eat one if no one willing to pay us what we think he is worth).

We also lease out good cross-breeding type bulls to commercial ranchers. Also sell semen. These activities help pay the room and board for these bulls: 2 months lease out will support the bull for the other 10 months.

 

[TheBullLady]

If you're collecting the bulls for semen, you have costs involved with that also.

The trick is all those "hidden" costs you tend to forget about. Who's responsible for fixing the fences on the lease property? Do you have enough forage for the cattle? Will you need to buy hay? Keep in mind the extremes in the cattle market as well. If you can buy when they are cheaper and sell high you'll make more $$ quicker. Of course, that would be in a perfect world!

 

[la4angus]

If you can buy when they are cheaper and sell high you'll make more $$ quicker. Of course, that would be in a perfect world!

From reading lots of the posts on here, many want to buy against all time record high prices thinking they will never be cheap again.

 

[Texan]

Erase from your vocabulary such negative terms as cattle losses, deaths, sickness, etc. With healthy, quality stock from the onset that are properly cared for your losses (if any) should be negligible.

Bill, I have to disagree with you on this one. Better advice would be to be sure you do include these in your vocabulary. A lot of people thinking about getting into the business want to ignore the negative side.

Death loss, sickness, medication, etc. are a very real cost to all cattlemen! In fact, when you figure the cost of morbidity/mortality on a percentage basis, that cost in dollars will be at record highs just like cattle prices. Others may disagree, but I think MM should be commended for considering these things in his projections.

 

[dcara]

A word of caution on buying bred cows at auction. One of my neighbors did that last year and all 3 died in calving. They were Herefords and the Vet's post mortem was that they had been bred back to a beefmaster.

 

[Craig-TX]

A word of caution on buying bred cows at auction. One of my neighbors did that last year and all 3 died in calving. They were Herefords and the Vet's post mortem was that they had been bred back to a beefmaster.

It's very possible that he bought bred heifers.

Craig-TX

 

[eric]

I got into the cattle business almost a yr ago now. If you are doing it just to make money, then you are alot better off keeping your day job and putting in a few more hrs there! But if you really enjoy working outside, working around animals, dont mind the initial expense of fencing, pens, feed and such, then by all means go for it.
Unless something really drastic happens, such as death/disease, you really shouldn't lose much $$ after the first yr or so. I am into my herd for about a couple grand or so,(not counting purchase price), but I have 3 calves I could sell this yr and make a good portion of that back, but like you, I would rather build my herd than sell and buy again. I dont mind the expense of feeding the calves over the winter even though they aren't bred. In our part of the country, big round bales run about $30-$35 a roll, and 4 big bred cows went through a roll a week last winter. So figure a $150 a month or so for 3-4 months per 4 hd.
Again, if its strictly a money deal, I can come into work and work on Saturday and make alot more than I can off these cattle, but it isnt nearly as enjoyable, and we just enjoy watching the big ol' goofy things graze around all day!

 

[royB]

A little more from a late starter. I've only had my cows now for 3 yrs. We started with 4 3-in-1's. The next spring I thought I was going to be ahead by buying a bred cow with a bull calf (reg Angus) and using the bull for my herd bull since the guy I bough them from was going to breed back the cow for me after she calved. She calved alright and the bull grew to be a really nice looking bull. Very much like his reg sire that was in the top f the Angus herd. Jump ahead to the next yr when I was waiting for the calves to start arriving. After a few months I had the bull checked by the vet and he failed the breeding soundness exam. Twice. Bull was then gnoe, but not till I lost an entire yrs calf crop. I finally got a new bull, had my cows preg checked and they are now all bred.

My point? Even the simplest things can mess you up. Like most have suggested I paid cash for my cows/bulls so it didn't hurt me nearly as bad as if I had to make payments on them.

We are now up to 14 cows and a bull and with prices as high as they are I've sold off some of the older "annoying" cows and left the money in the bank waiting for the fall price drop (hopefully anyway)

With that said, I too get discouraged about not being able to move faster into it full time (my wife would love to tell you about it I'm sure). It makes for a long week working full time and building up a herd and improving the facilities at the same time.


Roy