[ARCHIVED THREAD] - Cow Farming Question (Page 1 of 2)
Posted: 4/18/2006 12:08:08 PM EDT
|
I've got a chance to buy a farm in KY with about 50 acres of pasture. The previous owner kept a herd of breeder cows and sold the calves to feed lots. My question has two parts. 1) Is the above strategy a revenue maximizing strategy for a small farm? 2) What would be the expected revenue from a cow farm of this size assuming a highly competent farmer? Thanks! |
|
You forgot to ask one question and that is what would the startup costs be in buying a heard of quality breeder cows. Unless they are going to be included in the purchase the expense of them will fairly high. Also what do you mean by "cow farm"? I assume you are talking beef cows. What breed, where are you going to get your stock from, will you buy pregnant cows or hefers and have them bred? Who are you going to sell the calfs too, what breeds are they looking for? Why not raise the calfs and sell them directly? Everyone one of those questions completely changes the equations of if this is a good deal and will it make money. |
| A couple other questions, where is the farm located in KY? Is all of the 50 acres flat and usable for pasture or is it hills and trees making it much less usable? How many cows did the previous owner keep and raise on that 50 acres? Does it have a stream flowing through it or do you have to provide water for the cows? |
+ big plus one on that. Have somebody work up the usable ground and hay it, sell the hay. If your not too familiar with ranching, it's got a real quick curve for learning  Buying replacment heffers, keeping your bulls seperate so your not dropping calves all year long, supplement feed during the winter, Vacc's in the spring, selling your calves at the right time to go to the feed lots...all of it's quite complex. Be prepared for a few years of buy high and sell low, it seems to be the thing to do anymore 
|
|
Consider yourself a hobby farmer (i.e. you will not make a pile of money right away). 50 acres; 5-10 head of cattle buy cattle buy bull or pay to have cows bred (borrow bull, move cows to bull, inseminate) vet services or learn to do it yourself inoculations castrating the bull calves additional feed when pasture not available upkeep of fence water supply truck cattle to market (auction house, feed lot, butcher) Something to consider is to raise cattle with no supplements. There is a specialized market for beef cattle raised without supplements. Or find some other niche market or breed. Angus and Simmental (or cross of Angus?Simmental) seem to bring the best money in my neck of the woods. The good news is that calf prices were up over the winter. |
The farm is in Calloway county. It has a stream and pond. In the past it has held between 10 and 30 cows. It is rolling hills and I'm told "aint good for nothin' but cows" which I believe means you can't grow tobacco on it. As for all those other questions, I haven't a clue. If the operator of the farm were competent and made good choices what kind of cash could it generate from operations? If I bought it and decided to operate it myself I would have plenty of startup money. If I buy it and rent it out as a farm, knowing how much cash it can produce would determine if I could get a decent rent. |
|
It's nothing more than a tax dodge. With the cost of the land, cattle, feed, fertilizer and upkeep, your yearly losses will greatly outweigh your income. You'll get a fat refund check from the IRS for a few years if you can afford to pump money into it, but you better show a profit in 5 to 7 years or they will disallow the deductions. If you can lease additional land, you might make it work. Good luck, we need more family farms. |
|
I did it for about 10 years and rather enjoyed it. Didn't make much money after all said and done, usually glad I didn't lose money at the end of the year. You will be money ahead making the pasture into a prime hay field. Hay doesn't run off if the fence is down. Usually doesn't die if hit by lightening. Etc.... Hay is still an ag product, so qualifies for the various tax breaks. It is easier to schedule activities when raising hay as opposed to cows. Once established, much of your hay is pre sold before you roll it. |
|
A decent calf will go for 1.30 a pound on average. Feed lots seem to like them between 250 and 400 pounds. Price will start down from there. Depending on the feed on 50 acres and how you manage it, you could keep up to 30 cows. If it is cross fenced and you rotate your pasturage you can keep more cows than if it is one big pasture. figuring 10% mortality you could have 27 calves to sell after keeping them for 4 to 6 months. Calculate feed over winter, bull costs and time spent on calving you can make a little money best case and lose your shirt worst case. Cows are a lot of work and quite possibly are the dumbest animals in all of creation. |
|
Go buy around 35 calves just off momma in early spring, graze them until late fall and sell them. Be your easiest bet, you will make some money this way w/o all the cow/calf hassle that you don't know anything about. You can do this with the least start up costs. Edit to say: Ranchers.............not cow farmers. haha |
|
Here's a little summary I found on the cow-calf operations. It comes from Canada so the units of measure are metric. 1 hectare = 2.47 acres. The summary says between .5 hectare and 12 hectare per cow, or 1.25 acres to 30 acres per cow. Since you have a stream and pond there should be plenty of water and vegetation. So if we go with the average of 6ha or 15 acres per cow. That would only give you 3 breeding cows. Regardless of how much profit you make there is no way to support a farm on 3 cows. Even if you had 10 cows, I don't see how it would pay for all the work that would go into it. First article on the operations. ------------------------------------------------------- The cow-calf enterprise involves maintaining a breeding herd to produce the heaviest weight of weaned calves possible. Breeding-herd size varies considerably, from a few cows on small mixed farms to several hundred in large range herds. The larger units (averaging 38 breeding females) are found in the 4 western provinces, where over two-thirds of Canada's breeding herds are located. However, about one-sixth of Canada's supply of veal and young beef comes from unneeded male and female calves of dairy herds, most of which are located in Ontario and Québec. The western emphasis on beef production probably stems from the fact that the cow-calf operation is usually based on a low-cost pasture resource, eg, sparsely vegetated areas, nonarable land (12 ha required per cow), or very intensively cultivated and irrigated pastures (0.5 ha per cow). Some of the largest operations are found on predominantly natural pastures requiring 8 ha or more per cow. In such areas, the winter feed supply may be purchased but most often comes from improved native meadows or intensively managed arable land. The female side of the breeding herd usually consists of cows and heifers of a single breed, or the female crosses of breeds that are likely to produce hybrid vigour in the various maternal characteristics such as milking and mothering ability. Performance-tested, purebred bulls from breeds noted for their post-weaning growth and carcass characteristics make up the male side of the herd (see ANIMAL BREEDING). Summer grazing is usually controlled by a good distribution of watering facilities and trace-mineralized salt licks, pasture rotation, or movable electric fences. Calves, "identified" at birth, run with cows. If not naturally polled, they are usually dehorned and vaccinated against common diseases (eg, blackleg) early in the pasture season. Male calves are generally castrated. If range is limited or extra gain is economically warranted, calves may have access to grain. Breeding takes place in summer, preferably during a 6-week to 2-month period when cows are exposed to fertility-tested bulls (approximately one bull to 30 cows). Yearling heifers (approximately 15 months old), if well grown (300 kg), are bred to sires known to produce easily delivered calves. High conception rates are extremely important but seldom exceed 85-90%. Calves are weaned from early October to mid-November, usually just before winter feeding. At 6 months, calves from British breeds and their crosses usually average 200 kg for males and 185 kg for females. Earlier-born calves or crosses with "exotics" may be 50-100 kg heavier. Male calves and those females not needed for breeding are transferred to stocker operations, as are cows that failed to become pregnant or produced poorer calves. Wintering requires feeding in most areas, although pasture or cash crop residues may be used, weather permitting. In some areas, eg, the CHINOOK belt, winter grazing of mature herds on specially reserved pastures is normal. Feed is supplied only under severe weather conditions and before calving. The herd is usually broken into 3 or 4 groups so that replacement heifer calves, pregnant yearling heifers and 2-year-olds expecting their first calves can be fed to facilitate growth. In large herds, bulls are usually fed and managed separately. In the smaller herds, they may be allowed to run with the mature and pregnant cows. Winter feed is usually home-grown hay or silage from GRASSES, legumes or CEREAL CROPS. Grain and protein concentrates may augment poor-quality feeds; mineral mixtures and vitamin A supplements are the main purchased feeds. The average cow will consume 2% of its body weight in dry feed (eg, hay) per day; hence, wintering a mature cow normally requires 2 t of feed. Second article on costs and prices. ------------------------------------------ The U.S. bred female market is very strong. In mid February, some 2-year-old Montana heifers sold for $1,650/head. Given that today's calf prices aren't projected to last, how will these $1,650, bred 3-year olds pay for themselves? Depreciation alone on a $1,650 purchased 3-year old is calculated at $171/year over a seven-year period, or $240 over five years. This is in addition to the production costs of running a cow for a year. My Northern Plains benchmark herds spent $1.40/cow/day to run a cow for 365 days. That amounts to $512/cow/year (2004 data), including $128/cow for heifer replacement costs. If I substitute the $171 depreciation charge for the $128 annual replacement cost of the benchmark herds, my annual cow cost is $555/cow. But not all cows have a calf. If I wean 480 lbs. of calf/female exposed (many herds are below this), that generates a breakeven calf price of $116/cwt. of calf produced. My projected steer-calf price this fall is around $115, with heifers $5-$6 below that. In fact, I project downward trending calf weaning prices for the rest of this decade. Taking these projections into account, the economic value of a 3-year-old, second-calf heifer is well below $1,650. |
So the plan is to buy calves at their highest possible price point and sell grown ones in the fall at the lowest price point? Everybody is looking for calves in the spring and selling them in the fall. |
|
1st, it's ranching. You can feed 2-4 calves per acre in the fescue belt during the active growing season.. Buy 100 skinny calves in March and sell them in July. Buy 100 more skinny calves toward the end of August and sell them in December. The grass grows best from March-June and Sept-Dec. If it rains, you'll make money. If it doesn't rain, you'll be buying feed and will lose money. Plan B is to buy old worn-out dog food cows. Half of them will turn out to be pregnant. |
This is your best bet. I went to Texas A&M for a seminar on cattle operations, and they told us that if you have small acreage, your best bet was doing this. One thing you have to remember, those damn cows do nothing in the winter but get skinny and cost you money. A big plus 1 on the low startup costs. Make sure that you fertilize your pastures. It will actually make you more money. |
From what I've seen and do, it's just the opposite here. We buy calves at 4 weights to supplement what is short to ship a "load". Right now steers are at $1.40 and Heffers are close behind at $1.30 or so. You pasture them, get the weight up, someone will be by to buy them here shortly and we will ship them at an 8 weight or close by to the feed lots. 2 times for shipping over here, usually around 1st of June and again in November. This year, predictions are at .90 for steers and I'll bet heffers are close by at .86 or so. As for getting started? Your best money is in Cow/calf pairs. You can always rent a bull when the time is needed. Let someone else haul him, feed him and take care of him for 11mos out fo the year! 2-3 year old cows will give ya another 2 calves or so before you have to worry. Sell the calf off at weight and by the time the second one is out and on it's way to the feedlot mama is paid for 
|
First, it will be a hobby, and with most hobbies, you will probably never make more money spend. However, your losses will be an annual tax write-off. Do NOT go into a 50 acre cow farm expecting to make a livable wage. Matter of fact, probably the only way you will make money with 50 acres is to put chicken houses on it, and I seriously doubt you want to do that. That being said, you'll probably enjoy it immensely, you will join the small % of Americans actually making food, and you will also be in the extreme minority of pickup truck drivers...those with farm tags for their trucks. And parcels of land that size are not getting any cheaper. The most revenue to be had from 50 acres is to wait until it's taken in by the suburbs and sell it to a developer...but that probably wasn't what you wanted to hear. FYI, most feed lot bound animals are crosses of some type or another (like crosses of simmental or angus with brahma you'll hear as simba or brangus); typically the local environment controls which crossbreeds do best. In Ga, for example, crosses on brahma were common to cope with the heat. More of the purebreed breeders out there were producing broodstock, not feeders. |
|
Reminds me of an old joke. A farmer and a guy from the city were asked what they would do if given a million dollars. City guys says, "I'd buy a new car and house and kick back and sit back and watch life go by." Farmer scratchs his head and says, "Well, I guess I'd just keep on farming till it was all gone." |
Technically you are neither, you're a grass farmer. You actually manage their forage, they do the rest.... |
|
The best cows in the world are someone else's cows. Rent your property out to a cattle farmer. Cows look cool on property, they keep the vegetation trimmed back, and if they get out / die who cares? You can still shoot birds and such on the property, you just rent the right to keep cows on it. Now a seperate question would be "How much should I rent out the rights to keep cows on my property for?" I think somewhere around $24 an acre is the going rate. |
|
Here's my suggestion: Start small. Lease out 45 of those acres to other farmers or ranchers, and use those remaining 5 acres for your house and/or for a small "herd" of cattle. Cut your teeth on them, and learn the ropes. Then, next year, go as large as you think you can handle. So on and so forth. You probably won't make anything for the first couple years anyway (while you're learning), so better to start small and not tie up too many resources. |
| On 50 acres raising cow/calf pairs you will be real lucky to break even. Profitable ag normaly takes a large amount of land, Unless you are using some intensive techniques you are a hobby farmer. I have seen Dairys be successful on less land than that but they essentaly turned it into on big feedlot with freestall barns and a milking parlor. Best way to make money on that amount of land would probably be a nursury biz. If you are set on raising animals I would say go with sheep or possibly goats. With the huge influx of hispanic people in this country the demand for chevron (goat meat) is only going to go up. |
You won't be able to retire and live off cow revenue, for sure. 50 acres of pasture in GA will hold about 25 cows with calves in a GOOD year, on average closer to 20. In KY I'd expect no more than that, and probably a little less. RIght now cattle are pretty high in price, and the cattle cycle has went on a lot longer than I can remember without a crash--it is over due one. YOu may want to look at alternative farming, such as custom grazing or grassfed beef. To maximize revenue (and I assume profit, also) doing it the standard way of cow/calf and sell once a year won't work. Find something different with a high value and go that route. Also, DIVERSIFY DIVERSITY DIVERSIFY. Cows, sheep/goats, chickens, etc. "Stack" the enterprises. Also, remember, horses are nice to look at but will DESTROY your grass. I consider myself a grass farmer first and a cattleman next. Go here www.stockmangrassfarmer.com for a free sample issue and some other ideas. Read some books by Joel salatin ESPECIALLY one called "You can farm". this will help you think outside the box, but since you don't know what the current box is, you are already ahead. ALso read the book "pasture profits with stocker cattle" it gives you a good idea of the cattle cycle, etc. it is oriented toward buying calves and selling them, not birthing them and raising them. They are both availible from the website. If they are not listed call them. They have GREAT customer service there. If 20 cows produce 19 calves a year (one at least will die, usually more, if you have my luck) that is $8550.00 gross. assuming they bring $450.00 each, as an average. This is in a GOOD year, they may bring half or less in a bad year. The cows will cost $1,000.00 each today if they are good ones, and a bull will be $2,000.00 for a good one. You can figure on one cow a year dying or having to be sold due to some insane reason, and you have to buy another or raise a replacement. Figure vet bills, hay, insurance, etc. It all depends on what you do and your local market. Hope this helped. GR |
Read this post, it's something to strongly consider. I've done this very thing myself. I picked up 25 head of steers (3-4#), let them graze all summer and that fall, when everybody else weaned and shipped calves, I sent my steers to town as well. This isn't to say that it'll be a sure bet, but you're better off starting out this way. You won't have to feed them through the winter and you won't have to fool around with calving season. If you make money on it, you can either A) sock it away and do the same thing again in the spring, or B) buy your own momma cows. Up to you. Oh, and most guys I know prefer to called "cattlemen"....sounds fancier I guess |
|
1 cow 10 acres,50 acres of alalpha might yield you hay that you could sell other cow breeders! If you dont have the equipment to plow,harrow,drill,swarth,rake,bail it can be done by others! And I lived on 800 acres! If you want to build a house there and put about 1 bull and two cows there,raise two calves to sell and one to butcher,you will be okay if you have GREAT pasture! You will still have to buy someone elses hay through the winter! Go for it if you know cattle! You ever band a calf? Ever pulled one? Lots of things to concider! Bob 
|
Aw, hell...just raise basil and a few other herbs and heirloom tomatoes for the restaraunt market. Beeves are a pain in the ass. Herbs and 'maters....you plant em....you pick em....you ain't out chopping holes in the pond when it's 10 below so they can get water. 
|
SO TRUE!! 
|
First 50 acres is not alot of land for cattle. A land lease only pays depending on area $12 an acre. Cows require lots of atention as already stated you have to be their when its cold to give water if the pond freezes, give bales of hay. Start up costs like a tractor that used but good in condition $12,000 Bailer for hay $8,000 used hay rake $1000 Barns to store your hay $15,000. Lots of pens and chutes which can run about $2000-5000. dont forget the big 1 ton truck and cattle trailer $15,000 for a used truck and trailer. Vet bills and even meds you apply yourself can get expenseive Unless you plan on doin this for years think twice... The guys that make money on cattle are thje guys that lease others peoples land like yours for $600 a year while your stuck paying $500 or whatever mortgage a month. |
My family "farm" is 100% cattle operation on over 100 acres. We call it farm becuase a ranch is considered a larger plot of land in my area. I know in California a ranch is considered 10 acres... LOL 
|
Apparently you don't know much! LOL |
Lease the land or grow hay and sell it to the guys trying to make a go out of cattle. The vet and winter feed bills (among others) will eat you alive. Then there is always some asshat that'll take a shot at your stock "just because".  If you absolutely positively have to have critters, get a couple of calves at auction and raise them for the family freezer. My family raises Spanish goats and Boers. It's a decent living, but you need a lot of goats. Most of the money coming in is actually lease fees. 
|
I know Robert Schuller was talking about his sons 10 acre "ranch" when we went to his church in Garden Grove.. A ranch in my area is considered 500 acres plus A Family farm like ours is considered "the farm" We call small family operation in my area is called a family farm, if you CA boys want to be "elite" and call family cattle farms "ranches" just like J.R. Euing on Dallas then go ahead. In my area you call your "farm" a ranch people will know your a city boy... Remember when your Russia speak like russian, When in America Speak like an American. |
