It's expensive

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Stocker Steve
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Re: It's expensive

Postby Stocker Steve » Sun May 21, 2017 6:19 pm

Brute 23 wrote:Trying to pay for equipment with 30 head is a lot harder than 100 head. If you graph costs vs revenue with cattle there are sweet spots.


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Re: It's expensive

Postby pricefarm » Sun May 21, 2017 7:48 pm

Stocker Steve wrote:
Brute 23 wrote:Trying to pay for equipment with 30 head is a lot harder than 100 head. If you graph costs vs revenue with cattle there are sweet spots.


Tell me more ?


Yes I would like to know where the sweet spot is also.
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Son of Butch
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Re: It's expensive

Postby Son of Butch » Sun May 21, 2017 8:03 pm

economy of scale.... 400 hd should be sweeter than 100 hd
although if you're bleeding red... scale just speeds up the inevitable.
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Re: It's expensive

Postby tom4018 » Sun May 21, 2017 8:12 pm

Stocker Steve wrote:
tom4018 wrote:Sure wish I could figure out how to keep a cow for $120 a year.


These are the same folks that start their tax return with the refund they want and then work backwards. :nod:

Are you talking about me?
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Re: It's expensive

Postby Bigfoot » Sun May 21, 2017 8:41 pm

I understand economics of scale, and the law of diminishing marginal returns, but it's hard to say they apply to cattle (although I know they do). When I look at my inputs, there aren't many I could get cheaper, by buying mass quantities. As long as you don't step outside the bounds of commons sense.......Making 20 cows pay for hay equipment etc.
infact, the converse may be true. The more cattle you run, the higher your death loss on a percent basis.

Thoughts?
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Son of Butch
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Re: It's expensive

Postby Son of Butch » Sun May 21, 2017 8:43 pm

tom4018 wrote:
Stocker Steve wrote:
tom4018 wrote:Sure wish I could figure out how to keep a cow for $120 a year.


These are the same folks that start their tax return with the refund they want and then work backwards. :nod:

Are you talking about me?

I Always do that! But it has never helped me in lowering expenses!
I figured out how to keep cows for $120 a year, but then my neighbors got ticked about using their feed. :)
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Re: It's expensive

Postby ez14. » Sun May 21, 2017 8:55 pm

Stocker Steve wrote:
tom4018 wrote:Sure wish I could figure out how to keep a cow for $120 a year.


These are the same folks that start their tax return with the refund they want and then work backwards. :nod:

I'd like to do that! Do you know how?? Because I had to pay :cry:
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Re: It's expensive

Postby Son of Butch » Sun May 21, 2017 9:07 pm

ez14. wrote:
Stocker Steve wrote:
tom4018 wrote:Sure wish I could figure out how to keep a cow for $120 a year.


These are the same folks that start their tax return with the refund they want and then work backwards. :nod:

I'd like to do that! Do you know how?? Because I had to pay :cry:

I guess it's just a natural talent... you're young, you'll figure it out. Tip: (having a criminal mind helps)
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Re: It's expensive

Postby ez14. » Sun May 21, 2017 9:16 pm

Son of Butch wrote:
ez14. wrote:
Stocker Steve wrote:
These are the same folks that start their tax return with the refund they want and then work backwards. :nod:

I'd like to do that! Do you know how?? Because I had to pay :cry:

I guess it's just a natural talent... you're young, you'll figure it out. Tip: (having a criminal mind helps)
thanks for the encouragement and tip :tiphat:

:lol:
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Re: It's expensive

Postby kickinbull » Sun May 21, 2017 9:28 pm

farmerjan wrote:Yeah, I did quick math and come up with about 1200-1300. And oh boy, we just had a bearing go bad on the NEW discbine. It's covered by warranty, but will fix it ourselves or wait for several weeks for it to get done...so they said they would pay all parts, and shipping if we wanted to do it and it will still be covered but gee whiz....Got the part today so it will get done this week....
Pulled a dead calf out of a bought cow, then she went down and died 24 hours later.....Luckily one of the "cheap" breds, but now a loss... still not ready to pack it in yet....but won't see much "profit". One godd thing is steer prices on the 4+5 wts are up to the 1.40-1.75 range and heifers about 10 to 20 cents less so hope to do okay in about 2 weeks when we ship some. We'll see.
ya and non ag family members say 'but you can write it off!"
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Re: It's expensive

Postby Son of Butch » Sun May 21, 2017 9:41 pm

kickinbull wrote:
ya and non ag family members say 'but you can write it off!"

A write off.... the call of the truly ignorant and those lacking in understanding.
that's really funny... if it wasn't so sad
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Re: It's expensive

Postby Brute 23 » Mon May 22, 2017 8:24 am

pricefarm wrote:
Stocker Steve wrote:
Brute 23 wrote:Trying to pay for equipment with 30 head is a lot harder than 100 head. If you graph costs vs revenue with cattle there are sweet spots.


Tell me more ?


Yes I would like to know where the sweet spot is also.


Just like others have said cattle is about volume. Its a low margin, high volume game.

From what I see is the killer with cattle are the capital investments not the actual day to day operating costs. The tractors, the trailers, and all the other equipment that we all love to play with. :) When you crank up a $30K tractor,with a $15K shredder, that burns 3g/ hr of $3 diesel, uses $450 blades, and $200 hydraulic lines... it puts the pressure on those cows to produce.

When your < 10 head its hard to buy any thing... even a bull is a stretch.

As you get to 30 head you might start looking at a little used tractor, maybe a cattle trailer. Those two items may get you from 30 head to 50 or 60.

So if your graphing your costs per head vs # of head you will start out in the bottom left with some gap. As you move north east they will run fairly proportion until you hit a purchase like a tractor or trailer then your costs/h will spike. Lets say that is at 30 head. Then as you move toward 60 head it will start coming together again until you make another purchase like a tractor, then they will part again.

In a perfect world although you get a spike every time you buy a capital investment it should bring your operational cost per head lower over time.

People who have grown naturally over time know the dynamics of this struggle. When you have small numbers its hard to buy some thing simple like hay rings. We all know they are more efficient but on a small scale like 5 head your pay out may be 10 years. When you get to 100 head you can't hardly afford not to have them.

IMO the spikes come in increments of 30-50 head. If you can be aware of this you can see that some times it is not always wise to add more head because it may kick you right it to that next spike. If your not adding enough head to get you in to that next cost per head valley you may be better staying where you are at. Especially with labor becoming a bigger factor as your head numbers grow.

Every ones numbers will be different but you should see the same trend. I use this a lot when leasing land to determine what I would have to pay for it to be worth while. The further it is from "home base" the more head it has to handle because there will be a certain amount of cost associated with the transportation no matter if its 10 head or 100 head.

There are a ton of different variables and situations but its one more tool in the belt IMO.
Last edited by Brute 23 on Mon May 22, 2017 9:03 am, edited 1 time in total.
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Re: It's expensive

Postby Stocker Steve » Mon May 22, 2017 8:50 am

I agree that repairing used equipment, or buying new equipment, can eat you up. But I think that the investment points are personal choices in most cases.

Our local low cost producer has a skid steer, a stock trailer, and a flatbed. He doubled his herd size recently w/o any additional equipment. For folks who want to own a full line of equipment - - it seems like they need to be > 150 commodity cows to be effective.

A regional expert is pushing back grounding your calves (because cows cannot pay the bills). Another expert is pointing out that back grounding is not profitable most years. Seems to be an issue of overhead and ADG. I bought about $1000 of corral panels to background my calves so the additional investment was minimal. Either I am good or way over capitalized. :?
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Re: It's expensive

Postby Brute 23 » Mon May 22, 2017 9:11 am

Stocker Steve wrote:I agree that repairing used equipment, or buying new equipment, can eat you up. But I think that the investment points are personal choices in most cases.

Our local low cost producer has a skid steer, a stock trailer, and a flatbed. He doubled his herd size recently w/o any additional equipment. For folks who want to own a full line of equipment - - it seems like they need to be > 150 commodity cows to be effective.


That means he was operating is a cost spike before and when he double his herd with the same equipment he should have brought his cost/h down. That is what we would all like to do. That is easier to do once you break over a certain threshold and have accumulated a pretty good stable of equipment. The good thing is some thing like a flat bed trailer or a good tractor can last for ever and holds their value over time. They can service a lot of cattle for a lot of years so their cost per head is better than some thing like a round baler.

If you chart it over time you should be able to get an average cost per head that can help you determine if its time to buy some thing or not.
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Re: It's expensive

Postby TexasBred » Mon May 22, 2017 9:49 am

ez14. wrote:
Stocker Steve wrote:
tom4018 wrote:Sure wish I could figure out how to keep a cow for $120 a year.


These are the same folks that start their tax return with the refund they want and then work backwards. :nod:

I'd like to do that! Do you know how?? Because I had to pay :cry:

EZ you missed the key point. You start at the bottom and work up.
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