Hi, im new and have a question

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cbaracuta
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Hi, im new and have a question

Post by cbaracuta » Mon Jul 15, 2019 3:52 pm

Hello, Im hoping to get a easy answer to a complex question. I just inherited part of my fathers farm after his death last year. 200 acres formally had cattle on it, (about 25 years ago). Im in the process of having it refenced. I have a niebhor who wants to lease it for 25 bucks an acre. The land is very hilly and has many large lakes on it. So no chance of getting a tractor around on it. However, even though it hasn't had animals on it for a very long time the ground is still 60 to 70 percent grass. With the rest starting to grow in cedars and invasive silver thorns. I was thinking instead of leasing the land, I could buy 60 or so small steers in the spring and sell them off in the fall? I dont have alot of experience with cattle and don't have the time for a calving operation. And im not to concerned about making a bunch of money ither. I really just want the cows to do what cows do and eat. My question is, would I make any money on an average year or more importantly could I lose a bunch of money? Thanks



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sstterry
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Re: Hi, im new and have a question

Post by sstterry » Tue Jul 16, 2019 5:30 pm

I will defer to those here more experienced than myself to answer the ultimate question. But in the cattle business, you can always lose money!

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bird dog
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Re: Hi, im new and have a question

Post by bird dog » Tue Jul 16, 2019 7:07 pm

Why don't you let the guy lease it for a couple years and watch what he does before you spend a bunch of money trying to make a little? I would counter offer him. $25 per acre and spray the whole thing with a herbicide that will knock back the cedars and thorns.

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Re: Hi, im new and have a question

Post by Katpau » Thu Jul 18, 2019 1:33 pm

Where are you located?
What are silver thornes and how difficult are they to control?
Can this land support 60 calves and enable them to put on 250 to 300 pounds in 4 or 5 months?
Do you have working facilities so you can vaccinate, worm and treat sick calves?
How much would it cost you to truck these animals in, and then again truck them to a sale barn, or do you already have a buyer in mind?
Do you know how to buy healthy marketable calves and how to keep those calves healthy until sale day? It is almost guaranteed there will be some death loss. I would estimate 5% when bringing in purchased, put together lightweight calves, but realize it could go much higher.
Do you understand that a 450 pound calf costs more by the pound than a 750 pound calf. That means putting on 300 pounds is worth much less than the initial price you pay by the pound for those lightweight calves?
EXAMPLE you pay $1.70 per pound for 450 pound calf ...450lb X $1.70 = $765. Calf gains 300 pounds and sells for $1.40.... 750lb X $1.40 = $1050. Profit on 300 pounds is $285 or 95 cents per pound not considering death loss.

I would let the neighbor lease it and have him work on cleaning up those pastures. You can learn a lot from him. If he's a good leasee, I would give him a longer term contract so he has the incentive to take care of it. You mention that you don't have experience with cattle, so the odds of your making money with stocker calves is slim to none. You have the opportunity to receive $5000 with no work on your end, so I recommend you take it. People do make money on stocker calves in most years, if they know what they are doing, but it is always a gamble. Prices can drop between the time you buy calves and when they come off grass. Your inexperience makes me expect you would indeed be likely to loose a bunch of money. You are talking about over $40,000 up front to buy calves and take care of vaccinations & worming, etc. It is all risk from there on out.

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Re: Hi, im new and have a question

Post by garnetann » Sun Jul 21, 2019 8:20 am

I agree with birddog. Lease it for a couple years and that will give you some time to get a feel for the property. If you lease it, get a written agreement that covers who is responsible for what. (fences, weed control, water, etc)

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Re: Hi, im new and have a question

Post by Son of Butch » Sun Jul 21, 2019 2:57 pm

bird dog wrote: ↑
Tue Jul 16, 2019 7:07 pm
Why don't you let the guy lease it for a couple years and watch what he does before
you spend a bunch of money trying to make a little? I would counter offer him.
$25 per acre and spray the whole thing with a herbicide that will knock back the cedars and thorns.
My Like button is missing on this page... so... :nod: :nod: :nod: :nod: :nod: ... good advice

p.s.
And include buying 2 small steers to run with his... as a test to see how rich you'll become. :)

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Re: Hi, im new and have a question

Post by farmerjan » Mon Jul 22, 2019 11:45 pm

I too have to agree that the idea of leasing for a couple of years and watching what the neighbor is doing would really be a bigger help to you than trying to go it alone at first. Also, the idea of running a couple or so of your own and offer to help for free ( as the part of yours being in his group) to learn about some of the ins and outs. Vaccinating, treatments for pinkeye or worming or whatever they need. The idea of counter offering for the price and spraying is good. Or is any of it accessible that it can be bush hogged off to get rid of some of the brushy growth?
Katpau had some good questions and a good example of the cost differences in steers at different weights. We run a cow/calf operation, but sometimes keep weaned calves over. The lightweights do cost about what he used as an example, we got about 1.82 for a group of 500 lb steers this past spring early in the season. They are bringing in the 1.40-1.55 range right now and calves will be coming off early spring calving cows in Sept and Oct..That is not counting that heifers are running in the 1.10 to 1.30 range, so none of us are making a fortune. Everyone is right that there will be death loss. It happens no matter how good a farmer/rancher you are.

If you are doing the fencing and there are good water sources, I would do the lease for at least 2 years. Get some experience under your belt, get the land cleaned up a little and see if you want to do it. It might be in your best interest to just let someone else do the work, take the risks and profit/loss for a couple years.
Here in Va you can get the advantage of farm/agriculture taxes if the land is leased out. The person leasing the land has to sign a paper that shows they file farm income on their taxes. We sign papers on at least 5 places that we rent for summer pasture. Gives the landowner a good tax break.

If the land has been sitting, then you really can't lose with guaranteed lease money in your pocket. If you are already fencing it, then the renter has nothing to complain about. The fence will be there in a couple of years if you decide to do anything different. The markets are a bit volatile right now, so prices are far from a sure thing.... if they ever were. But we have been in an expansion stage and have reached higher numbers so prices are lower. With the flooding, there have been some losses, but there are still steady to small increases in cattle numbers, so the selling prices will trend down a bit. Most of us are barely selling our feeders for costs if you figure it on an overall yearly average.
Sorry that a death brought about your acquiring the land, but congrats on trying to do something agricultural with it. Keep us posted, we like to know about, and help out new cattle people.

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Re: Hi, im new and have a question

Post by FarmerShell » Fri Aug 09, 2019 3:13 pm

I'm going post my two cents worth...
Could you sell the cedars for Christmas trees or maybe somebody that use them to make furniture? Maybe a cedar closet, chest, etc. If you have big enough ones maybe somebody looking to build a cedar cabin. Use them on some of your fencing corner pole?
What is the person wanting to lease the land for? Hunting? Cows?...
I'm going to agree with some of the others if there is somebody wanting to lease it for $25 an acre, I'd do that depending on his reasons. That will help give you money for improvement needed and cows.
Seriously, I like to think I can make a good decision. I'm no professional life advisor or anything. I don't know much about cows... I started with 2 bottle calfs back in the spring, ended up buying 38 more. I thought you put the cows in the field they graze and you take them to sell in the fall. 🤣😂😭🙌🏽 Live and learn!! Definitely a little more to it than that. I been working my butt off all summer. 🤣😂😭🐂🐃🐄☝🏾🤣😂😭 Don't get me wrong I enjoy it just alot more work than I thought. We have 100 acres it's not all pasture either. So you would be working with more land. If your set on getting cows start small. 🤣😂😭 40 cows for us was like jumping in head first. First time giving them all shots was a GOOD time! I didn't know how to get a cow to walk through a squeeze shoot. "Cow walk!" Yea that didn't work. I do wish I had a video of that. I'd play it in days I need a good laugh. Than again we have to do things ourselves to make money. If we hired that done it cut in to the profits.
Good luck!!.

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