Who's breaking even or better?

[dyates]

I think the amazing thing about the thread Mr.Billy started is the lack of responses.
Is it that people don't have a clue to what there atually inputs are?

Or are people starting to loose there shirts in this economy with cattle ?
With higher fuel,fertilizer,feed not to count a land note and with the price of beef down.

My numbers are a little hard to crunch and my motifs are a little different than most. I have the benefit of using a lot of equipment in exchange for labor. All in all, my equipment costs are nill. However, I only have a small herd and I don't expect to make much money. I just try not to lose more than I can bare. My wife and I expect to inherit her family's farm in a few years. I'm trying to build the best small herd I can build to have something to start from if we do inherit the farm. Depreciation for what I do have makes it look as if I'm doing horribly. However, when I throw in the equity I'm building, the herd I'm building, etc., I feel like I'm doing pretty good for my little herd. I just don't know how to put a monetary value on some of it at this point.

 

[TheBullLady]

Not to highjack the thread.. but isn't there a point when any profit you make on cattle production can no longer catch up with the value of the land? In other words... if I were paying a mortgage (30 years ) on property that was purchased say 10 years ago at $500 an acre, and it's now worth $1500 per acre, aren't I loosing money trying to produce cattle on that land anyway?

I don't know if I've stated that so anyone can understand.. but I tried!

 

[novatech]

Not to highjack the thread.. but isn't there a point when any profit you make on cattle production can no longer catch up with the value of the land? In other words... if I were paying a mortgage (30 years ) on property that was purchased say 10 years ago at $500 an acre, and it's now worth $1500 per acre, aren't I loosing money trying to produce cattle on that land anyway?

I don't know if I've stated that so anyone can understand.. but I tried!

I would look at the land as a seperate investment. When figuring profit, lease the property from yourself at a rate comparable to lease pasture in your area.

 

[TexasBred]

Heck for me land without cattle is like a parking lot with no cars. Might as well build a wall around your little house and lawn so you don't have to see the rest of it and then just let the rest go to pot. The tax assessor will remind you every fall that you still own it. :lol2: :lol2: :lol2:

 

[gerardplauche]

I agree with TexasBred. Land and cattle go hand in hand. If money was the primary concern, chances are, you would never get into the cattle to begin with.

 

[Bama]

Lets see if I can put this in perspective. I ain't in the cattle business, Im in the money business. I use cattle to make money. You have to know the EXACT cost of everthing to be able to figure your return on investment dollars. If you can't beat the returns on a simple CD your losing money. Putting money on CD's don't take any of your time or effort. Your money grows at a set rate without you lifting a finger. Now put that same money in the stock market and it can grow faster or lose. More money to be made here but you can also loose big time. One has to figure the risk. CD's are less risky but less profit possible. Now back to cattle. Cattle are risky and there ain't a lot of money to be made. Unless one manages them to the last cent how do you know if you have your money in the most profitable investment. Cattle take time and effort. You need to know if that effort and money would be wiser spent elsewhere.

 

[grubbie]

We make good money on cattle. But my situation is very different than most of you here. Third generation rancher, so the land is paid for. I buy old beat up equipment, so its all paid for. We raise our own hay, so aside from fuel and maintenance, the feed is pretty cheap. We still have hay stacked up from 3 years ago. So, yeah, we make good money from cattle. I had no idea some of the costs you guys had to deal with. Of course, if you figure in the time I spend out fencing, I probably make about 50 cents a day. But personally, if I wasn't making money I don't know if I would do it. I'd probably spend my days off with a fishing line instead of a fenceline.

 

[MrBilly]

OKay this is a good discussion, but let me expand the topic a small bit.

You are all talking about cost per cow or calf per day. That is different, but I think some are comparing apples to oranges, no?

How do you figure this cost? What goes into it?

Our farm is an LLC, we are partners in it, share holders so to speak.

Our costs are:

Land -paid for
Taxes
Equipment depreciation or purchase
fertilizer
feed
hay production or purchase
mineral
wormers
fuel
labor
advertising
processing if we sell beef
sales tax if we sell beef
accountant services
Artificial insemination costs
leases
repairs
fencing
vehicle insurnace, registration
cattle id tags
herbicides
cattle purchases
cattle registrations and transfers
chemicals
conservation activity
dues
subscriptions
education
electricity
equipment parts
irrigation costs
licenses and permits - DOT etc
Medical - meds, vet, etc
hoof trimming
office expense
postage
seed
supplies
tests - soil, hay, gender gene
water system expenses
government grants and assistance
etc.

These are the things we need to consider the cost of; the number of cattle we have and the cost per day, no?

So, let's now see how you all are coming up with your costs. :tiphat:

I think we can all learn from eachother on this and should help us focus on cattle as a business.


Billy :cowboy:

 

[dun]

We aren;t a LLC but those are all of the costs we figure. I didn;t read the tntire list closely but it seems to be all inclusive. Part of the cost per cow from year to year changes based on the appreciation of the land but that's only reralized when the land is actually sold,

 

[Caustic Burno]

We aren;t a LLC but those are all of the costs we figure. I didn;t read the tntire list closely but it seems to be all inclusive. Part of the cost per cow from year to year changes based on the appreciation of the land but that's only reralized when the land is actually sold,

Same here every dollar that it takes to run the place is charged to the cow.
With as little profit as we made this year with no notes owed on anything.
Our cost to maintain a cow came to 438 dollars a head. Doesn't leave much room.

 

[Bluestem]

Good list. I could not think of anything to add. Our goal should be to shorten it up. It comes down to what we have control over.
Going over the list, here is what I have no control over.
Taxes
Vehicle reg. Insurance. (I do have some control over this, less vehicles)
Licenses and permits
Which leaves us with a long list of items we do have control over. The hard part, deciding where to cut. I see some items where I could cut back on with a simple management change.
government grants
hoof trimming
chemicals
herbicides
accountant services
labor
wormer's
fertilizer
fuel
feed
hay production, purchase
Mr Billy- hope I did not steal your post. I know where you're coming from here. Most people I deal with have no clue. I've been going over every cost. Trying to prepare for the downturn. We get a little fat and lazy when times are good.

 

[grubbie]

Yes I include all costs. Every dollar I spend on the land, cattle, equipment, ........anything it takes to get a calf to auction in the fall. I keep records on everything. My biggest costs last year were fuel and fencing supplies. We started putting up some new corrals last year so that raised our numbers quite a bit in that area. I use "Quickbooks" program for my bookkeeping. I really like it as I can customize it for my operation.

 

[Bama]

Everthing I buy is charged to the cows. I also buy and sell calves. Everthing is charged on a per day basis. I take all expenses, down to the last cent. This number is divided buy the number of total "cow days". Then each cow is charged this number times the number of days she was on the farm. I always have a pretty good total of what each one is costing me at any given time. The numbers are not exact until the end of the year. At years end all the numbers are in and divided between all the cows. I also keep track of the stuff carried over from last year and carried over to the next. This way I can get a yearly cost. I also have a column that gives me a total from a cows first day until her last on my place. I wrote a program with excell to keep track of everthing. I could not find a commerical one that would do everthing I needed. Each cow or calf has its owns sheet. There are summary sheets that take data from each cow sheet generates a report. I also have another book that all expenses are entered into. Each cost has its own sheet.(feed,salt and mineral, health and medicine, etc...) All of this cost is added up and charged to each animal by number of days on farm. I realize this is over the top for some folks. I am somewhat of a nerd I guess, but I just have to know if this is the best place for my money to be invested or if I could do better putting it somewhere else.

 

[Jogeephus]

Interesting post. I'm glad I'm just a farmer and not a rancher who relies solely on cattle income for a living. Cattle are just one commodity I produce and I do not rely soley on them to buy my vehicles and equipment. Granted, cows do not bring in the income that I would like but what commodity does? Nonetheless, cattle are relatively easy to manage and do not demand a tremendous amount of time or energy to produce. In my situation, cattle compliment other areas and can be used as tools in themselves.

While I am not foolish enough to think with today's land prices you can boot-strap your way to richs in the cattle business. In my opinion, a successful farm or ranch must be diversified. Let one element compliment another. Managing all of your resources to the fullest is the only way you are going to make a living off the land. Today, I have more land and cattle than I did last year and I have very little debt. I also have several hundred rolls of surplus hay. As I see it, I gained wealth. May have lost money but I'm wealthier for it. To me, its not about cash. Its about maintaining the land and doing the best I can with it. If it was all about cash, I'd liquidate my cattle, sell the all the hay and equipment and bust the land up and sell every bit of it in the first quarter of a new year and move down to Costa Rica and live like decadent royalty rather than working like a share-cropper for the government.

 

[Wewild]

We took in the years past but not in the far past.

We lose now because we are paying for our recent past mistakes.

Recent can be as long as 10 years.

I won't even try to put a pencil to a "individual" cow cost. It's may be like measuring with a micrometer and cutting with an axe. We all know where our warts are.

It is easier to calculate the cost a $/cow per farm if you want to.... a profit and lose statement is fairly common in a operation.

 

[larryshoat]

It's may be like measuring with a micrometer and cutting with an axe.

Did you make that up? I like it. :tiphat:

Larry

 

[Wewild]

It's may be like measuring with a micrometer and cutting with an axe.

Did you make that up? I like it. :tiphat:

Larry

I was taught that. There is not much new in the common sense area.

 

[novatech]

We took in the years past but not in the far past.

We lose now because we are paying for our recent past mistakes.

Recent can be as long as 10 years.

I won't even try to put a pencil to a "individual" cow cost. It's may be like measuring with a micrometer and cutting with an axe. We all know where our warts are.

It is easier to calculate the cost a $/cow per farm if you want to.... a profit and lose statement is fairly common in a operation.

This is a matter of perspective.
If one is in the buy sell business end of cattle then herd figures are all that is important.
On the other hand if one is raising replacement heifers or in the seed stock business it is highly important to have individual cost records. No diferent than having EPS's.

 

[Caustic Burno]

We took in the years past but not in the far past.

We lose now because we are paying for our recent past mistakes.

Recent can be as long as 10 years.

I won't even try to put a pencil to a "individual" cow cost. It's may be like measuring with a micrometer and cutting with an axe. We all know where our warts are.

It is easier to calculate the cost a $/cow per farm if you want to.... a profit and lose statement is fairly common in a operation.

This is a matter of perspective.
If one is in the buy sell business end of cattle then herd figures are all that is important.
On the other hand if one is raising replacement heifers or in the seed stock business it is highly important to have individual cost records. No diferent than having EPS's.

Without knowing cost per day everything is just a guess on profit or loss a cow in your operation are returning to the bottom line. A cow that calves every 12 months versus 13 means a difference of 438 dollars to produce a calf versus 474 bucks. No matter how good old Belle looks she is a leach on the operation. Carrying a poor producing cow or one that misses is the quick way to go out of the cattle business.

 

[Wewild]

We took in the years past but not in the far past.

We lose now because we are paying for our recent past mistakes.

Recent can be as long as 10 years.

I won't even try to put a pencil to a "individual" cow cost. It's may be like measuring with a micrometer and cutting with an axe. We all know where our warts are.

It is easier to calculate the cost a $/cow per farm if you want to.... a profit and lose statement is fairly common in a operation.

This is a matter of perspective.
If one is in the buy sell business end of cattle then herd figures are all that is important.
On the other hand if one is raising replacement heifers or in the seed stock business it is highly important to have individual cost records. No diferent than having EPS's.

Without knowing cost per day everything is just a guess on profit or loss a cow in your operation are returning to the bottom line. A cow that calves every 12 months versus 13 means a difference of 438 dollars to produce a calf versus 474 bucks. No matter how good old Belle looks she is a leach on the operation. Carrying a poor producing cow or one that misses is the quick way to go out of the cattle business.

I agree with both of you. Everyone knows that one cow is going to consume more forage than another but it can't be measured in a herd with a pencil. So the cost per cow can be calculated from a gross cost but one cow was still cheaper to carry than another. There are other examples that are easier to quantify such as the years gross sales price, wt, and $ per pound of the calf sold on an individual cow basis.

Maintaining a productive mother that excells in her consumption and product output is the goal.

Our capital or M and R cost has been high of late. I expect several more years of this. Despite that we had to pay taxes on our net last (2006) year as the way the calves where batched and sold.

I will get better at the cost per cow in the future. Tagging is complete on the cows and documentation is improving. Calves are another challenge when one goes to work before daylight and get home just before dark in the winter time. I have got to get to calving at a set period. What do you think about fall sales verses spring sales?

I don't think I have really said anything other than what ya'll have.