Nesikep wrote: ↑
Mon Aug 03, 2020 2:28 pm
Don't know your specific tax laws, but around here's it's exactly the same of you keep a replacement or sell your heifers and buy replacements
If you sell the heifer, that's income they for the year she's sold.. if you buy the heifer, that's an expense the year she's bought, so if you sell and buy another one for the same price, the same year, you're not better off.
If the purchased one falls over dead, it doesn't matter, you've already written her off when you bought her and can't be expensed twice.. if the kept replacement falls over dead, she was never income, so she can't be expensed. Feed, salt, and the other cash costs are all expenses you can write off regardless.
Exactly... it's a wash. By the time you pay for the income on the sold calf, even with depreciation on the bought your equaling out. Plus, dont forget if you sell the animal for more than the depreciated value it's still taxable.
Actually there is a strong case to be made retaining because you can defer the taxes from selling that calf and grow your asset base much like a tax sheltered retirement plan.
It costs us, on avg $350 per momma cow to raise a calf, annually. Some will say that is too low but it's done by feeding less than 1 bale per head per year. One of the perks of a mild winter in the south.
So you take $350 for the cost to raise that calf to weaning. Now, you did not generate income by selling her so that is another cost. Pick a number, I'll go $650... at $1000 total. Let's say you wean at 7 months, breed at 16 months, you got 9 months on the dole. 9 x 30.4 = 273.6 days @ $1 per day... another $275. Now I'm at $1275. That replacement heifer's bill ends the day she is bred. Once she is bred her costs now go against her calf, not retaining a heifer costs. She is just like any other cow in the herd once she is bred.
Even if you factor a group not calving out 100% and some misc if you think some of my costs were low... from the pics I posted of cattle... does any one here think they can buy that quality of animals, consistently cheaper, year in, year out?
If you can let me know... I'll bring the check book and make sure there is even a finders fee in there for you.
I can tell you it darn sure wont be from from no cattle peddlers like J&J, Clay Nahovitza, or any of the other FB personalities.