Big opportunity...dont want to blow it

wberry85 · #1 05/27/14, 07:01 PM

I have been looking for some pasture for rent for a while now trying to fulfill my life long goal of making a living off of a cattle operation. My wife tells me there is a couple just down the street looking to rent 100 acres. It could use some work but otherwise it sounds like a big opportunity.

I have til next spring to get ready and find some good stock for cheap. I have raised cattle before but never for money. I have a couple questions.

Seems to me it makes the most sense to start out with some high quality breeding stock cows, preferably bred. Keep the heifers and sell the steers while I expand.

On 100 acres, at 1-2 AU per acre, I think profit is possible, especially with MIG etc. However, when people say "profit", does that just mean the cattle made enough to expand, or the cattle made enough to pay the bills (gas, mortgage) but nothing extra? I am not looking to get rich but not looking for foreclose on my house either.

I guess if you had this chance, what would you do to start it off right to set you up for a successful cattle operation?

collegeboundgal · #2 05/27/14, 08:38 PM

you're getting into cattle when they are selling for record high prices... you're gambling that they STAY at record high prices. doing this with 5 or even 10 head, not a dangorous bet. doing this with 50, 75, or 100? hope you're young and have time to bounce back if it tanks...

wberry85 · #3 05/27/14, 08:43 PM

Record high prices over what period of time? 1 yr high, 5 yr high, 10 yr high? I am not in a huge rush to go out and blow money on cows but within a year is definitely my goal. I thought about waiting til fall to pick up some extras that someone didnt want to winter.

No way I could start with even 50. I have about $9000 to invest. I plan on holding some aside for hay/vet/etc. I am not looking to borrow $50,000 and start with 50-100 head especially being new to the game. I am in my 20's but still conservative in my approach to any investment. Starting small and growing fast is more like it.

kycountry · #4 05/27/14, 08:54 PM

When they said record high prices, it is ALL TIME, never seen before, record high prices... right now, in my area, 9k would get you 6 cows at most.... and these are poor cows that need to be fed up some...

kycountry · #5 05/27/14, 08:59 PM

And btw, that may be the reason the pasture is for rent. The old farmer that has scraped and beat his head against the wall trying to save his house, farm, or other personal belongings finally seen a way out.. selling his herd for record prices so he could pay himself out of debt..

Right now, if you ever thought about getting out, it's prime time to sell them all..

wberry85 · #6 05/27/14, 09:12 PM

Right now there are around 50 horses on the property. The woman who owns them husband is not doing well at all and he wont be able to keep up the place. I imagine she isnt paying much in rent at all, so I am hoping to get the land at a good price.

Whats behind cattle prices being so high? I imagine price corn is a big factor, along with higher land cost, and more beef demand. Over the long term I do think cattle is a great long term investment as the population grows and demand for beef is greater than ever. Everyone talks about how cattle used to be so cheap. So did everything.

All these points aside, I was hoping to get more advice on cattle operation details, and not so much reasons on why I shouldnt do it. I have heard plenty of that before. I am determined to do it, and I am determined to be successful at it. There are people out there making a living on cattle, and I am hoping to discuss with some of those people on what mistakes they made and how they would do it over again if they had the chance.

nosqrls · #7 05/27/14, 09:36 PM

Prices are high Because so few cattle left in the u.s. period.(drought,heavy snow, freeze) A heifer ready to breed will cost 1500$ or more. You better be getting the land for less than 1000$ for the year. or you wont make any money. And if it has 50 horses on it It will take time for it to recover because horses beat the ground up bad. Disk, fertilize, re-seed, there goes half of your budget. You would be better off buying bottle calves raise them throw them out on pasture then sell when ready to beef. do that a couple of times get your cash pool built up then buy bred cows/heifers.

kycountry · #8 05/27/14, 09:45 PM

Well, I make my living in cattle along with a few other farm hobbies.. not saying a great living, but we get by..

And, I never said you shouldn't, but you need to realize buying in at record high prices is a very risky venture.

What actually do you want to know?

What equipment do you have?

What's the hay market like there?? Here, spring hay is short, so if your rolling your own, expenses are up for the amount of hay you get.. if your buying, you better be praying for a better fall cutting, or you may be selling because you can't feed them...

It's better to address everything now and get a realistic grasp of how far 9k will go.. than get halfway through the winter and need 20 more rolls of hay and can't afford to buy them even if you could find it..

collegeboundgal · #9 05/27/14, 10:09 PM

If you are determined to do this, buy hay this summer/fall, then buy the cattle in mid and late winter. Bad/long winter? Good for you, bad for a farmer who didn't set enough hay aside and has to cull. You'll get better prices. Check the fences. Cows new to a area will test the fences. Once settled down, they can usually be kept behind one strand of electric fence. Look at the water on this farm. Will it be there in sub zero weather? Do you have a way to get a round bale to them, because even with the best of intentions, you will likely HAVE to feed a bale if their is 2" ice over the grass or under 12" snow. (ask me how I know...) what about a working facility? You'll need a way to round up the cattle to vaccinate and tag/brand the calves/new cows. If you're wife can/will help you all this will be much more easy. As long as you don't get crazy cows, you can use movable panels as a corral since you don't own the property. Don't sink a lot of money in someone else land. Remain mobile...
Good luck and FCS is a great place to get ag lones...

sammyd · #10 05/27/14, 11:42 PM

Edited .

Allen W · #11 05/28/14, 08:48 AM

Quote:

Originally Posted by wberry85

All these points aside, I was hoping to get more advice on cattle operation details, and not so much reasons on why I shouldnt do it. I have heard plenty of that before. I am determined to do it, and I am determined to be successful at it. There are people out there making a living on cattle, and I am hoping to discuss with some of those people on what mistakes they made and how they would do it over again if they had the chance.

Respect and time is how you get the answers you want.

simi-steading · #12 05/28/14, 09:07 AM

Last cattle auction out in our area in WV, somewhat decent breeders are going for 3-3500... butcher ready are selling for 2-2500 and up..

I'd really rethink getting into cattle at this time if the prices are even similar to that in your area..

Even little small weener pigs were selling for $90 and $100.. Livestock prices have gotten crazy..

TripleD · #13 05/28/14, 09:38 AM

I'm selling off my older cows 12 plus years and buying 1 yr old Holstein heifers. They are costing me over 1k each.

lakeportfarms · #14 05/28/14, 10:13 AM

You will not find "good stock for cheap". You'll either find good stock and pay the appropriate price, or you find cheap and probably pay more than they are worth. If you're asking for advice here, you probably don't have enough experience to tell the difference between the two.

As others here have said, cattle prices are at record highs. Anybody who has the eye and experience to raise high quality stock knows this, and they have been through many highs (and lows) before to give anything away that they've worked so hard to build.

I'm not saying you won't do well, but you have to be very careful and take it slowly, realizing you're not "buying in" at the best time. Whatever you do, keep your debt to a minimum and put whatever money you have available to the absolute necessities only. Be prepared for a lot of hard work in any kind of weather, and find yourself, and purchase from, a good breeder that has been successful, because that person will be your mentor. If you pick them up hodgepodge from here and there, don't expect anybody to be rushing to your aid when you run into (and you will) problems.

wberry85 · #15 05/28/14, 02:59 PM

I am thinking my best route will be a cow calf operation. Right now my plan is to get as many 3 in 1's as I can. I have seen them going for around $1600 in my area. Keep the heifers and sell off the steers. If I can get 5 of them for $8000 that's 15 cows assuming I don't lose the calves. Let's say 14 planning to lose one (20% attrition).

I'll be doing AI to avoid keeping a bull. So 14 cattle and lets say half the calves turn out to be heifers used for expansion. So that's 5 more heifers and the steers get sold for $4000 that goes back in to more cows, possibly 2 more 3 in 1's. Still leaves $1000 for hay if I need it. Rinse and repeat from there.

Does that sound like a solid plan? It is warm here and last year I was able to graze my cows and horses at home year round at 2 acres per animal.

The possibility of retaining steers for selling beef is a possibility but more complicated financially. My wife is a photographer and we have potential customers at my farm almost daily if I wanted to market beef. Right now I would like to keep it simple though.

Not much I can do about cattle prices. I don't see demand for beef going anywhere and getting into cattle isn't exactly on every young persons to do list. I am thinking cattle prices will remain high long term mostly because people are not flowing into the occupation like they used to. Everywhere you read talks about the aging farmer population. There has got to be some people able to recognize that opportunity and step into the game right about the time the average 58 yr old farmer is getting out.

kycountry · #16 05/28/14, 03:35 PM

I need to be buying there.. paying trucking and reselling here... 1600 for bred cows with calves by their side??

Here is what I'm seeing.. cow calf pairs from $2300 for non registered stock cows weighing around 1000lb to $9500 for registered Angus cow calf pairs... and none of them are bred back..

Now, if I could buy them at 1600 per pair, I'd hold them for 400+ lb weaner calves. That's $1200+ for the calves, and then sell the bred cow for $1600 in my market...

CIW · #17 05/28/14, 11:01 PM

Some people think that cattlemen raise cattle. I tend to disagree with much of there reasoning.
Think of a cow as a piece of machinery used to harvest grass. That being said, the more that it takes to power that machinery the less profitable the piece of machinery is. The more work that you do to help her harvest the grass the less profit that you make.
Many folks worry about the cost to get into the cattle business. I always want to know what its going to cost me to get out.
With the market so high, buying any long term animals (brood cows) at this time, is financial suicide. If your already in, theres 2 ways to make money. Skim the cream by selling out all calves you have and wait to grow when to market takes a drop. Or, buy into short term animals that will gain weight quickly and be marketable within 2 weight classes.
Now here's my opinion.
Right now that animal is a grass calf. 500 to 650# calves are going to yield you the quickest way to increase and turn the greatest return on your investment. Buy slim, growthy animals with a plenty of structure to put meat onto.
A brood cow is going to take between 4 and 5 years to realize any return from. The grass calves will return each fall, with no overhead through the winter, and cash to reinvest next spring. Then after a couple of years when you have built up, buy into a couple of cows along with the grass steers. Sell off the steers in the fall and keep those cows. Slowly over the years you can then keep replacement heifer's and buy less grass steers.
Doing this will tie up less cash flow and yield more return. + get you into the cattle business without a debt hanging over the operation.
All that being said. You will be working a full time, day job, while you do this.
One last bit of advice.
Your young. Realize that young folks want to often bull their way into many situations and many times loose their shirt doing it. Curb some of your passions (passions are good when controlled) and make business decisions not emotional ones and you will keep your $9,000.
You have been given a lifetime of sage advice in all the above posts. Put it to use.

sammyd · #18 05/28/14, 11:30 PM

If you haven't looked at the pasture then any plan is open to failure. Maintaining horses is quite different than growing beef. You need to walk the land and take a very hard look at what you intend to turn into money.

COWS · #19 05/29/14, 01:40 PM

First, be sure the horses are off and don't allow any more back on. 50 horses for 100 acres is too much. The pasture is beat to pieces. This summer I would have soil tests done and repair fences. If the soil test says lime is required(it almost certainly will) put lime on. Not sure of the cost of lime but you need a ton per acre. You are in piedmont GA and I'm north of you in piedmont SC so I'll claim some familiarity with conditions. This fall plant fescue. Fertilize at a rate of maybe 200 pounds of 17-17-17 per acre, less if its too expensive. Next spring put 100 pounds of 33 1/3 % nitrogen down.

During the year go to sale barns with your notebook and take note of selling price of livestock. I hope there will be some weakening of prices in the fall because I will want to buy more calves, but I'm not going to bet on it. You can't buy calves this fall because the pasture that is newly planted will not be high enough to graze. You could put cows on the pasture next spring, by April, but prices are always high in the spring. Your best bet is to bale the new fescue, sell most of the hay, keep some if you buy cows. If you sell the hay at good prices, you may want to rethink buying cows for the time being. The hay, after all, wont tear down fences and get out. BTW, there are two kinds of cows, those that get out and those that are going to get out.

Get local advice on baling and selling the hay. You make the most money by selling square bales, IN THE FIELD, to people with horses to support. If you have round bales made you need a tractor to move them, preferrably with a front end loader.

Good luck.

COWS

wberry85 · #20 05/29/14, 02:32 PM

The pasture needs work for sure. The landowner has told me he would like it to rest before I could put animals on it. I am thinking he is going to spray and stretch more fence before I get out there. I told him I would help him but I think he is going to pay for spray and lime and such.

I have 11 acres at home that if I needed somewhere to put the cows I could until spring is ready. Are the prices low enough in the fall to where I could try to winter the cows and save money instead of buying in the spring?