What to do with land if the cattle industry collapsed?

[backhoeboogie]

Walk the talk Dave...

I think I already did that. I sold my place in Washington and gave up the leases two years ago. I bought a place here that is six times bigger than my total deeded and leased acreage in Washington. If you count the BLM allotments this place is 81 times bigger. The only way to be successful is to not be afraid of the occasional loss along the way. The people I see who make it in the cattle business are in it for the long haul. The occasional bad spots are just learning lessons. If I were 40 years younger I would be jumping in a whole lot more than I am now.
I helped haul 186 calves yesterday. They were weaning calves off replacement heifers and some cows who are new to this part of the world. They weaned early to give these cows a little break and fall pasture time to recover and grow a bit. Three owners on these calves. One is 50 yo and started with nothing. He runs 900 pairs. The other two are 21 and 29. The two young guys had more calves that the older guy. 50 years ago people were saying that it is impossible to make it with cattle. But people who were willing to work somehow started with nothing and made it work. It is happening now and will continue to happen.

I wasn't referring to your accomplishments Dave but more specifically the words 'pessimism' & 'attitude' you used ;-).

He's offering positives. Three successful people are cited. I like it.

 

[TennesseeTuxedo]

"what happens when or if there is a correction on land values?"

I hope to get in when it bottoms out. Buy buy buy.

Yup

 

[TexasBred]

Thanks for all the fun facts but nothing you are saying has any thing to do with my original comment. It appears you just want to give every one your resume. Good day :tiphat:

:lol2: :lol2: :lol2: Brute you got it man and didn't even have to ask for it..I'm telling you the man is killing it :lol2: :lol2:

 

[littletom]

Here the tobacco industry has been over for 20 years. It is what built this part of the state. And for years every year the same the last crop will not be another next year. It use to bother me and scare the crap out of me. It has changed in a huge way really consolidated. This year i had over 100 acres. For now small side of a big one, from history thats a big tobacco crop. People still smoke
Same thing will happen with beef that has with everything else in farming. Exactly what Aron said the ones that want it will expand consuming the smaller guy. When cost are spread and you are selling in a bigger package money can be made at smaller margins. I know its not what anyone wants to hear but sto are going to a thing of the past. I don't know many people that work for a living and have some money that are going to stop eating beef. I'm not my friends aren't and we are not old not even to forty yet. 11 years the people that can, will be eating steak the ones that can't burgers. The yuppies cat food or something food eats. my 10 cents. Really big farms are getting bigger

 

[littletom]

I've not seen land get much cheaper. If it won't sell as a farm here cut it 5 ways. People move in mostly from the north get them a steal on rural living.

 

[backhoeboogie]

Thanks for all the fun facts but nothing you are saying has any thing to do with my original comment. It appears you just want to give every one your resume. Good day :tiphat:

:lol2: :lol2: :lol2: Brute you got it man and didn't even have to ask for it..I'm telling you the man is killing it :lol2: :lol2:

Y'all hang in there. Don't go committing harry carry in all your doom and gloom. I wish you success in something.

 

[Dave]

I mentioned earlier in the cattle Sales about a couple neighbors selling 7 potloads of steers on the video. Worked out to be 560 head of steers. They got nearly $1,000 a head for them. And that was just the steers that they sold. I don't know what they did with their heifers. I failed to mention that they are both 32 years old. They might be 33 by now? So keep complaining on how it can't be done. Misery does love company. These young men wouldn't say a word. They are just quietly getting it done.

 

[hurleyjd]

The last land my family purchased was like $1200/ ac in the 90s.

I didn't know we were talking family.

My eldest daughter has 4 ranches and is working a 5th. She is no longer working as an engineer. (Degree TB). I'm really glad she's not following some of the advice here.

If you're losing money, someone else is earning it. They don't throw your money in a barrel and burn it.

The point is you can still buy good land and turn profit on it. People are doing it. Maybe you are not doing it. But other people are.

I do know what my daughter paid for that ranch is Desdemona, TX. She stole it. The entire place is grazing land. 1920's Craftsman home and a huge modern steel barn. 6 deep water wells. I suspect she turned profit on it the first year. That purchase happened in 2015. It is nothing like you are describing.

Interest rates are really good. I just bought 3 more rental houses. These are not for me to live off of right now. I want to pay them off within 6 years. All profit will go against debt or improvements. They will be managed by a management agency. I've already received an offer (thru the lady managing them) but I'm not planning on flipping them. But I could.

There is money in real estate. A lot of money. Farms. Houses. It's there. People are earning money. I've earned a whole lot. Everything I have ever purchased has sold for at least 50% more than I paid.
500% on one 8 acre piece.

I refuse to borrow money for toys or pick ups, boats, atvs etc. If I can pencil out loans for real estate transactions, I pull the trigger. I have 2.7 million net worth real estate that's debt free at the moment. I have other property that I am in debt for. 6 counties here in Texas.

Oklahoma is tempting me but it's too much travel at this age.

Were you in a hot area and selling oil leases to oil companies for umpteen millions. Just asking I think in years past your were posting about this.

 

[HDRider]

I mentioned earlier in the cattle Sales about a couple neighbors selling 7 potloads of steers on the video. Worked out to be 560 head of steers. They got nearly $1,000 a head for them. And that was just the steers that they sold. I don't know what they did with their heifers. I failed to mention that they are both 32 years old. They might be 33 by now? So keep complaining on how it can't be done. Misery does love company. These young men wouldn't say a word. They are just quietly getting it done.

Dave,
You are obviously in a different league than many of us. I mathed that to a 625 pound steer. That steer would have sold for 831.25 here. Livestock Weighted Average Report for 9/13/2019 - Final Ash Flat Livestock Auction - Ash Flat, AR

Why the difference?

 

[ALACOWMAN]

I mentioned earlier in the cattle Sales about a couple neighbors selling 7 potloads of steers on the video. Worked out to be 560 head of steers. They got nearly $1,000 a head for them. And that was just the steers that they sold. I don't know what they did with their heifers. I failed to mention that they are both 32 years old. They might be 33 by now? So keep complaining on how it can't be done. Misery does love company. These young men wouldn't say a word. They are just quietly getting it done.

Dave,
You are obviously in a different league than many of us. I mathed that to a 625 pound steer. That steer would have sold for 831.25 here. Livestock Weighted Average Report for 9/13/2019 - Final Ash Flat Livestock Auction - Ash Flat, AR

Why the difference?

Well like those guys ages at the time of that sale..the market changes week to week..a lot premiums payed for those type calves also..than at the local stockyard..

 

[HDRider]

I mentioned earlier in the cattle Sales about a couple neighbors selling 7 potloads of steers on the video. Worked out to be 560 head of steers. They got nearly $1,000 a head for them. And that was just the steers that they sold. I don't know what they did with their heifers. I failed to mention that they are both 32 years old. They might be 33 by now? So keep complaining on how it can't be done. Misery does love company. These young men wouldn't say a word. They are just quietly getting it done.

Dave,
You are obviously in a different league than many of us. I mathed that to a 625 pound steer. That steer would have sold for 831.25 here. Livestock Weighted Average Report for 9/13/2019 - Final Ash Flat Livestock Auction - Ash Flat, AR

Why the difference?

Well like those guys ages at the time of that sale..the market changes week to week..a lot premiums payed for those type calves also..than at the local stockyard..

I assumed this was a current transaction.

Are you saying there is a $169 premium per head for a pot, or are you saying they are some kind of special steers? My cattle is as good as any, better than most. They always top the sale barn

 

[TexasBred]

I mentioned earlier in the cattle Sales about a couple neighbors selling 7 potloads of steers on the video. Worked out to be 560 head of steers. They got nearly $1,000 a head for them. And that was just the steers that they sold. I don't know what they did with their heifers. I failed to mention that they are both 32 years old. They might be 33 by now? So keep complaining on how it can't be done. Misery does love company. These young men wouldn't say a word. They are just quietly getting it done.

Dave these sound like some good young men. Working hard, marketing a good product and quietly going about their business. Gotta be enjoyable to work with.

 

[ALACOWMAN]

The backgrounding and preconditioning and steered in uniform groups... Not questioning your cattle quality.just different marketing ..but a lot of good ones are dumped in pens with along with the others ,at the stockyards..

 

[HDRider]

The backgrounding and preconditioning and steered in uniform groups... Not questioning your cattle quality.just different marketing ..but a lot of good ones are dumped in pens with along with the others ,at the stockyards..

If they got $1,000 per, I'd like to understand the cost to get them there.

I'd like to hear from Dave.

 

[Stocker Steve]

Cattle business and land business are totally different. Where some folks get in trouble is they try to have it all, funding both of them initially with outside money, and then wonder why they do not have cash flow after a couple years.

Dairymen have figured out how to seperate the cattle and the land businesses. They put 10,000 cows and a dorm for the workers on 80 acres of cement, and contract for corn silage.

 

[herofan]

The amount of pessimism on this board never fails to amaze me. I am surrounded by people who make there living raising cattle and they never express the type of attitude that I see here.

I am by nature a very optimistic person, driven by the realities I see.

I can only speak to my situation. It I know well.

It cost me more to carry a cow than I get from selling a calf. I am not spending money wastefully, or wantonly. I do not factor in my capital cost when I say that. I am speaking strictly about operating cost, mostly hay, which cost me about $35 per ~750# bale.

More cows cost more, less cows cost less. It is a linear equation for me.

Maybe I am doing it wrong. Maybe I am just too stupid to figure it out.

This is the main point I see. Myself, and I assume many others, don't farm for a living completely as we have day jobs. As long as the day job covers the losses and the person enjoys farming, it goes on. The farmers farming for a living or when the day job doesn't cover the losses are the ones I see being affected the easiest.

I feel like maybe I'm too stupid sometimes, or just look at things too simplistically, but I have never understood how people do something and don't make any money, but yet, they still do it, and for most of those people, it's what puts beans on their table. I don't know how one buys beans with no money.

I could understand having a bad year or two, but I don't see how one goes on and on not making money. I have such a small operation that I'm not making a living at it, but I always make a little each year that I can jingle in my pocket. If I start going a few years losing money, and it appears that will continue, I'll sell out and take my final loss.

Even if I were losing money but stupid enough to think I was making a profit, wouldn't that finally catch up to me? At some point, wouldn't my piggy bank be empty when I needed a trip to the grocery? Culture sure has changed. There was a time when not making any money meant you were poor and ragged. Today, it just means you might have to settle for 3 vehicles instead of 5.

I know some guys who are mechanics, cabinet makers, and farmers, and the one thing they all have in common, to hear them tell it, is that none of them make any money, but they seem to have everything they need and then some. Strange.

 

[Lucky]

It's easy for a business to not make any money and still survive when the owner is living out of it. Farmers and Ranchers are the simplest example of this but I would say most business owners are at least a little guilty of this.

 

[plumber_greg]

Herofan, ifyoure a small operation,lookingfor jingle in your pocket, give up!
However, ifyour a small operation looking to build equity, stay in there, itwill happen! JMHO, GS

 

[herofan]

Herofan, ifyoure a small operation,lookingfor jingle in your pocket, give up!
However, ifyour a small operation looking to build equity, stay in there, itwill happen! JMHO, GS

Everything I have is paid off. I don't owe on anything.

 

[bball]

I helped haul 186 calves yesterday. They were weaning calves off replacement heifers and some cows who are new to this part of the world. They weaned early to give these cows a little break and fall pasture time to recover and grow a bit. Three owners on these calves. One is 50 yo and started with nothing. He runs 900 pairs. The other two are 21 and 29. The two young guys had more calves that the older guy. 50 years ago people were saying that it is impossible to make it with cattle. But people who were willing to work somehow started with nothing and made it work. It is happening now and will continue to happen.

Dave,
Often these discussions turn into a pizzing match between naysayers and yaysayers. I wish to avoid that pitfall and discuss what the successful cattlemaen are doing to make things work during challenging times. I know it's more than just hard work because almost anybody who still owns cattle today isn't afraid of hard work. My biggest obstacle is acquiring more land. I do not have access to BLM, haven't inherited any land, and land prices are between 8k to 10k per acre because I reside in the corn belt. Leases are few and far between, but I was just approached about leasing another 80 acres for $5000 per year(seems steep but they're so rare here that there is no negotiation).
What I am most interested in is how the young men you mentioned acquired enough land to run that many head at such a young age? Lease? Loan/debt? Other avenues? It's very impressive and admirable.
I follow backhoeboogies school of thought about land. I have never lost on real estate and understand the concept of building equity and sweat equity. The cows i keep are on land i bought cheap because it's marginal ground in these parts. Again, down the road, my children will reap the benefits hopefully. To buy more land i would have to either relocate(not an option currently) or attempt a loan(tough sell here if you're running cattle [due to the high land prices]). Presuming I could get a loan, current cattle prices could not cover the note. Not being a pessimist, only stating the reality of my geographic region; hence, my interest in how the young men near you have accomplished what they have.