cow/calf operation vs stockers

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LWC
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cow/calf operation vs stockers

Postby LWC » Wed Nov 11, 2009 11:34 am

I'm trying to decide what kind of small cattle operation to start. I have some experience with cattle, but not a ton. I have 50 acres in the north TX area. I think I could run about 10 cows on this land. My question is would I be better off with 10 cows on year round basis, or just run something like 20 steers while I have grass?

I am going to use some very rough figures, but here goes. Cow/Calf operation: raise and sell 10ea 500lb calves at $500 each for roughly a $5,000 gross. Subract out expenses of say $2,000 for hay and medicine leaving approx $3,000 profit (not including initial purchase of cows).

Stocker operation: buy 20 steers at 400lbs for say $9,000 (in the spring). Run on grass until fall w/ approximately 250lb gain. Sell in the fall for $13,000. Gross $4,000 less $1,000 for medicine and supplements = $3,000 profit.

I know these figures are very rough. But, seems to me I could make as much or more profit off of running stockers and not have to worry about buying hay, feeding in winter, calving, etc... What are some of your thoughts? Thanks

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Re: cow/calf operation vs stockers

Postby Workinonit Farm » Wed Nov 11, 2009 1:15 pm

LWC wrote:I'm trying to decide what kind of small cattle operation to start. I have some experience with cattle, but not a ton.

I know these figures are very rough. But, seems to me I could make as much or more profit off of running stockers and not have to worry about buying hay, feeding in winter, calving, etc... What are some of your thoughts? Thanks


That would be my suggestion. Generally, overall, running stockers can be less labor-intensive than cow-calf. And as long as your 'stockers' are/remain healthy and you run them while you have grass and minerals and not need hay and any other type of feed, it will cost you less to run them.

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Re: cow/calf operation vs stockers

Postby farmwriter » Wed Nov 11, 2009 1:51 pm

If you can run the steers a few years and stick back a little profit, you could use that money to buy some bred cows down the road if you decide to go that route.
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Re: cow/calf operation vs stockers

Postby Bez+ » Wed Nov 11, 2009 3:13 pm

Are you prepared to lose the money if the price goes south?

Seems everyone thinks the profit is there automatically.

You also have to factor risk, drought, fences, time and the return you could get from renting the land out and investing your available cash.

Your numbers do not represent a lot of other things - but you can search for yourself on that - here a just a few to start you out.

You do not tell us your experience level and you do not tell us if you are a cash or credit guy and you do not tell us what your plans will be to recover from deads and disease - which you WILL have.

You do not tell us how you will fix problems with health or with deads and you do not have any mention on what you will do if grass runs out and you have to sell early.

You do not tell us where the stock will come from.

You do not tell us if you are prepared to spend more money if you have to hold them or will you sell at a loss - which people are sometimes forced to do.

I would re-do those numbers before I stepped in

Any answers you got right now are based upon you being an experienced person - maybe you are and maybe you are not.

You have a lot of holes - yeah, a lot - that all need to be filled in - otherwise we would all be doing this on a bigger scale if it were as simple as you have made it look.

Best of luck - do more homework.

Cheers

Bez+

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Re: cow/calf operation vs stockers

Postby Howdyjabo » Wed Nov 11, 2009 4:01 pm

I got a new one to add to how to loose money with cattle---

We had a bad week

We were loading a load of calves and a nut case tore up three gates and a corner brace.-- there goes a big part of the profit on that load.
A BIG tree fell in a pasture last night- the calves must have been bedded down close and panicked . They wiped out 200 ft of brand new fence(there are miles of old fence on the place and they get the new piece :( ). Then I spent most of the day getting them back. There goes most of the profit off of them.
And a stupid calf stepped into a feed bunk flipped and busted it up good(not to mention dumping all the feed I just put out)- there goes some profit on that load.

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Re: cow/calf operation vs stockers

Postby dun » Wed Nov 11, 2009 4:03 pm

Howdyjabo wrote:I got a new one to add to how to loose money with cattle---

We had a bad week

We were loading a load of calves and a nut case tore up three gates and a corner brace.-- there goes a big part of the profit on that load.
A BIG tree fell in a pasture last night- the calves must have been bedded down close and panicked . They wiped out 200 ft of brand new fence(there are miles of old fence on the place and they get the new piece :( ). Then I spent most of the day getting them back. There goes most of the profit off of them.
And a stupid calf stepped into a feed bunk flipped and busted it up good(not to mention dumping all the feed I just put out)- there goes some profit on that load.

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Re: cow/calf operation vs stockers

Postby LWC » Wed Nov 11, 2009 5:16 pm

Bez+ wrote:Are you prepared to lose the money if the price goes south?

Seems everyone thinks the profit is there automatically.

You also have to factor risk, drought, fences, time and the return you could get from renting the land out and investing your available cash.

Your numbers do not represent a lot of other things - but you can search for yourself on that - here a just a few to start you out.

You do not tell us your experience level and you do not tell us if you are a cash or credit guy and you do not tell us what your plans will be to recover from deads and disease - which you WILL have.

You do not tell us how you will fix problems with health or with deads and you do not have any mention on what you will do if grass runs out and you have to sell early.

You do not tell us where the stock will come from.

You do not tell us if you are prepared to spend more money if you have to hold them or will you sell at a loss - which people are sometimes forced to do.

I would re-do those numbers before I stepped in

Any answers you got right now are based upon you being an experienced person - maybe you are and maybe you are not.

You have a lot of holes - yeah, a lot - that all need to be filled in - otherwise we would all be doing this on a bigger scale if it were as simple as you have made it look.

Best of luck - do more homework.

Cheers

Bez+




Thanks for the replies so far. I understand that the numbers I used do not factor in very many variables or market risk. I also understand profit is not a given. The holes that Bez+ brings up are the kinds of info I am trying to understand. I basically have 50 acres of decent pasture with good fences. I have been working for the last few years to get fences back in working order. Now I'm trying to decide what would be the best kind of cattle operation for me.
My experience level would probably be considered low. I grew up on the farm with cattle, but that has been a couple of decades ago.
This would be a cash operation.
Health - plan on doin the initial doctoring myself. What do you think the cost per head would be? What medications/treatments would you recommend?
Deads- not sure I have a plan for that - drag off and let the coyotes have 'em. Hopefully not too many.
Where will the stock come from? Hopefully I could find a deal from some local ranchers...possibly sale barn....thoughts?
Would I sell at a loss? I guess if I had to. If I could get a couple hundred pounds on them (I know a big if), I am hoping there would not be too much of a loss. I guess if it was a severe drought and I ran out of grass, I would try to hold out for a while (buy some hay) and then sell at some point and try to cut my losses. I don't think anyone is prepared to lose money, but if you get in the game you have to know you could lose.

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Re: cow/calf operation vs stockers

Postby jerry27150 » Wed Nov 11, 2009 6:26 pm

just remember calves will be highest in the spring & lowest in the fall. knew one guy that would put up hay & buy calves in the fall & keep them till about june or july. them let hay grow & bale again for next year

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Re: cow/calf operation vs stockers

Postby J+ Cattle » Wed Nov 11, 2009 10:14 pm

LWC wrote:I have 50 acres in the north TX area. I think I could run about 10 cows on this land.


I makes a big difference where you are located and how much rainfall you get on how many head of cattle your land can support. I am in north central Texas and you cannot run an animal unit per 5 acres on a year round basis unless you have access to irrigation, improved pastures, lots of fertilizer or a combination of all three. I suggest you check with your more experienced cattle raising neighbors and see what they recommend.

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Re: cow/calf operation vs stockers

Postby Jeanne - Simme Valley » Thu Nov 12, 2009 8:31 am

10 cows = 10 calves = 500# each in fall = $1/lb
Oh my - "the perfect world" - wouldn't it be nice.
I would suggest you start out with feeders in the spring (less number of head than you THINK you can graze). See how you make out with them. It will give you an idea of what you might be able to run next year. And, I would strongly advise you to sub-divide your 50 acres so you can rotational graze. You will get a lot more quality feed off your land.
Your neighbors would be much more helpful on what you can and can't do with your acreage than we can.
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Re: cow/calf operation vs stockers

Postby Brute 23 » Thu Nov 12, 2009 10:25 pm

Why don't you get say 5 stockers and do a little test run.

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Re: cow/calf operation vs stockers

Postby backhoeboogie » Fri Nov 13, 2009 8:10 pm

Jeanne - Simme Valley wrote:10 cows = 10 calves = 500# each in fall = $1/lb
Oh my - "the perfect world" - wouldn't it be nice.


Sign me up for that too!!!!!!!!!!!

I hate putting myself on a one way street. If the prices tank and your steers are ready, you're kind of stuck.
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Re: cow/calf operation vs stockers

Postby options » Fri Nov 13, 2009 9:53 pm

jerry27150 wrote:just remember calves will be highest in the spring & lowest in the fall. knew one guy that would put up hay & buy calves in the fall & keep them till about june or july. them let hay grow & bale again for next year
That may be a regional thing. In the Dakotas demand for calves is much higher during the fall calf sales than any other time of year.

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Re: cow/calf operation vs stockers

Postby jdot » Sat Nov 14, 2009 5:42 pm

Owning cattle is alot like owning stock in the stock market. Yes there are certain types of "stock" that involve taking more of a risk when it comes to losses, but in the same breath let me say this, usually the more risk you take the more you will profit. Not saying this holds true 100% of the time but for the most part thats how it goes.
As for factoring in things such as fences, deads, sickness, feed, vaccinations, water, mineral etc..... all of these factors, factor in, no matter which operation you choose. If you own them, they will get sick, they will need a vet for good times and bad, they all need fences, feed and water. Don't let those who are not willing to take a chance discourage you from doing so. This is a great place to do some research but don't let the ranking of the posters sway you.
I personally run a small cow/calf operation but I am considering changing that next fall??
I guess that the moral to my story is, do your homework. (looks like you are already doing that) Follow through with your plans and be honest with yourself. In the end check the numbers and see what works for YOU.

:tiphat:

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Re: cow/calf operation vs stockers

Postby cowboy43 » Sat Nov 14, 2009 10:20 pm

You are figuring a 100% calf crop for 10 calves for 10 cows , good luck, year end year out you will be lucky to average an 80% calf crop, also you need to figure the cost of a bull and upkeep of him. Also I question 10 cows and calves + bull on 50 acres without a lot of feeding in north Texas, if you figure all costs of paying loan back + interest and all aditional cost ,tractor, equipment , fuel, truck and trailer,expenses, fences , depreciation of livestock, you will be lucky to clear $0 to $100 per cow. Even if you pay cash for them you need to handle as a loan paying yourself back, you can buy a stocker for the price you will have invested in a cow for the year. and if it turns off dry you can unload them easier.


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