To keep heifers back or not?

[JSCATTLE]

I've never sold a calf off a heifer before she was 2.5 years old . She might have a calf at 2 but she doesnt put money in the bank until the calf is sold at 6 months old ! Unless I'm missing something ??? So you retain a heifer . He dam doesn't have anything to sell for that year to me that's a lost year the next year her heifer calves at 2 you sell two calves . But it is possible to buy a bred cow the first year and sell 3 calves by the time the would be heifer sells a calf . Correct me if I'm wrong .

 

[bigbull338]

you are smarter to sell all your heifer calves.an then buy cows with the money.now im a reg breeder,so i gamble an keep the heifers worth keeping.an i also buy back reg replacement cows an 1st calf heifers if i get the chance.

 

[Caustic Burno]

What if your operation was big enough and you ran separate herds you could also theoretically run separate books and treat each herd as its own business so you could sell heifers from one company (herd) to the other thereby gaining the potential for the tax loss benefit you mention Caustic.

Just a thought.

TT I couldn't answer that one that seems like slide of hand and I don't have a clue how the IRS would view that.
I would want a for sure nuff good CPA if they tried it.

 

[TennesseeTuxedo]

I would consult with a knowledgeable CPA for sure but I see nothing wrong with a fella owning two separate cattle operations. In my case when the day finally comes that I get into cattle full or at least semi full time I'll have a brother in law working the same land so I suppose he could have one herd and me another and we could sell heifers to each other.

Now if I could only stand that son of a buck it might work out. LOL!

TT

 

[Massey135]

What if your operation was big enough and you ran separate herds you could also theoretically run separate books and treat each herd as its own business so you could sell heifers from one company (herd) to the other thereby gaining the potential for the tax loss benefit you mention Caustic.

Just a thought.

The problem with this is that you will have to pay income taxes on both sides and will only be able to deduct one years depreciation against that the following year. Unless of course you expensed the entire asset in yr 1 which would eliminate the whole point of the "sale" - to be able to depreciate the asset on a schedule.

This past year, because of the drought, the IRS allowed cattle income from cattle that were sold DUE TO DROUGHT ( figured by the number over and above what you usually sell) is to be tax free as long as the money was reinvested in livestock. Otherwise you would have to pay income taxes on the gross income and then re purchase with the remaineder- which that value can then be depreciated over the animals useful life.

 

[BACattle]

Thank you for your input. I'm sure my partner and I will go back and forth until just before the day of the sale.

Thank you.

 

[Anguscattle]

With our registered herd we retain heifers yearly. I like to know how my registered cattle were raised etc.. And i have the records on the dams so I know how reproductive she is/was. Therefore I know that this said heifer I keep should produce.

As for our commercial cattle... A little different. I like to stretch a cow out as far as she'll go. In other words, as long as she is retaining and regaining weight before/after calving and is producing a calf within a year, keep her. When she hits 8 years old we start anticipating a heifer to be kept to replace her. The idea is to have that heifer calve before that cow is ready to ship. And 9.5 times out of 10 it works that way. When the heifer calves, the cow is 10. Maybe she's ready to ship, maybe not. But if she is, we have a cow in production to replace her. And my take is, if your cattle cant make it to 10 years old and still produce effieciently, you need to upgrade your genetics. There's NO reason why a cow shouldnt be able to produce at a high level at that age. 10 is our number. If we can get an extra couple years, great. If not, oh well, She earned her way those 10 years. We usually do get a couple extra though.

Although salebarn cattle have made some people rich. I get sick when I have to go get a cow to add to the herd from a salebarn. I hate bringing outside cattle in. Its a risk. There are so many diseases these cattle are exposed to. not to mention you have no idea where they came from, what type of management system they came from, their breeding history, genetics...etc. You ALWAYS have to think, this cow is being sold for a reason!! Usually either bc theyre sick, or werent producing etc. Every once in a while you can find that gold mine in the salebarn. Be prepared to look hard though.

 

[angus9259]

Although salebarn cattle have made some people rich. I get sick when I have to go get a cow to add to the herd from a salebarn. I hate bringing outside cattle in. Its a risk. There are so many diseases these cattle are exposed to. not to mention you have no idea where they came from, what type of management system they came from, their breeding history, genetics...etc.

frequently underestimated issue. Bring in one case of Johnes or BVD and you can throw the calculator out the window not to mention not so toxic issues such as various strains of pinkeye and scours that your own herd has theoretically built an immunity against.

 

[highgrit]

Great post Anguscattle, I like your thinking.

 

[Kscattle]

I completely agree angus cattle, why would someone take some of their best cows to the sale barn unless it's a complete herd dispersal/ retirement and then, why didn't the neighbors buy those first? That is a very good point

 

[1982vett]

You feed the dam and heifer for two years and they generated nothing to the bottom line zilch zero .
At a 1.50 a day upkeep roughly you have sunk 1800 to 2000 in the retained heifer. You have upkept the Dam for 730 days with no generation of income. Wean the heifer at 205 day's now she is no longer riding the cow's train and is costing a 1.50 a day. You carry her another 7 months before breeding another 283 day's before a calf maybe, it is a heifer.
The heifer has no value to the IRS if she fall's over dead, the purchased cow does as well as her input cost.
This is like buying insurance versus driving uninsured. It is an absolutely loss to retain a heifer other than for genetic's.

I will try again.
If one of the purchased cows fall over dead, the tax write off is what one payed for her.

If one of the home raised cows fall over dead, one already payed her by paying what it costs to raise her, and this cost has already made a tax write off.

Is tax not payed upon income minus write off? :compute:

Robbing Peter to pay Paul...you have to know when and how you want your taxable event....growing capital can shelter taxes.

But let me say this....with 5-6 weight heifers now selling for ~$850 ....... and bred cows available for ~$1200....I know which paydays I want.

 

[agmantoo]

I need animals that are adapted to my place and my forage. Where can I buy such animals? IMO I cannot.

I also like the fact that the retained heifers are part of a closed herd. I only introduce new bulls. Bulls are vet checked before delivery and are quarantined at my place for at least 30 days before introducing them to the herd.

It is far cheaper for me to feed a heifer than it is for me to pay someone else for an animal that they have fed. The only thing a purchased animal has is the advantage of time which I would be paying dearly for.