Today's workshop

[greybeard]

you make your money when you buy, not when you sell. I don't care what it is, if you do this, you won't take a beating. DO NOT buy in when prices are at record high, buy in when there are deals to be had..Trust me, they are coming too...

The other side of that coin is "how low will she go?" or-- when the bottom is in. Just as it's easy to sell too soon when prices are rising, Lots of people have come away with bloody hands trying to catch a falling knife.

[Gators Rule]

As in all investing, buy slowly on the fall and the rise. No real successful investor buys at the height of the market. That's not where the money is made.

[bball]

Like everybody, I know they will go down, and I'm not looking forward to it. Has anybody figured the break even point on a 550 pound weaned calf. It's up there these days. Luckily fuel, and grain are cheap at the moment. My other inputs are not though.

I figured mine earlier in the year in the Gross Sales /Net profit Regional thread....

Re: Gross Sales /Net profit Regional
Postby 1982vett » Mon Jan 26, 2015 6:11 pm

Seed - 1141.84
Fertilizer - 4522.00
Feed - 487.1
--------------------------
Total - $6150.94 / 43 Calves is $143.04 with an average weaning weight of 523.10 lbs ..... now throw in fuel, insurance, depreciation, truck (Schedule F)...... that comes to $645.62 per weaned calf.... but that's just last year for me.

Don't know how that stacks up against others, but I'm fine with it. Hope this year is as good.

If calculations are correct....186 days to get their.

I could be all wet here, but here goes. I do it a bit differently...
I expect a cow to raise her own calf.
2014 my cost per cow per day was $1.54. That includes every expense associated with my beef operation (taxes,fuel,vaccines, wormer,grain, fertilizer, tags on trailer/truck, hay,etc)
Based on 190 days until wean @ $1.54/day = $292.60 per calf
That's what it costs me to maintain the cow that is raising that calf. All my expenses are built into the daily cost of operation. So basically, the more it costs per day to maintain a cow, the less money I make at weaning. These are Simm/ang cross that weaned at avg 573 lb. I do not overstock pasture. Like previously stated, we are really grass farmers, so it is imperative to maintain soil and forages while optimizing animal husbandry.

[bball]

you make your money when you buy, not when you sell. I don't care what it is, if you do this, you won't take a beating. DO NOT buy in when prices are at record high, buy in when there are deals to be had..Trust me, they are coming too...

The other side of that coin is "how low will she go?" or-- when the bottom is in. Just as it's easy to sell too soon when prices are rising, Lots of people have come away with bloody hands trying to catch a falling knife.

I agree but at the same time, I have no problem liquidating half of my stock that I purchased for an avg of $600-650 per head a few years ago when prices were way down. Selling same animals for 1800-2000 after getting 4 calfs out of them, makes me not worry about when or how high or low market gets...smart economics says sell (note, I'm not selling everything) it's kind of a hedge against the market. I bought low,going to liquidate some while prices are at peak, built in win..especially after several years of calf crop at good money.

[Jabes0623]

I'm more curious to see if this move toward quality pounds above else will finally kill the black is king mindset that so permeates the cattle industry.

Also CB brought up what I believe is the single most important & pressing issue that will effect the beef industry in the next decade or two. What is this industry going to look like in 20 years? I believe the average age of Americas cattle farmers & ranchers is the mid 50's. Simple math will tell you that in the next 10-20 years there's going to be massive holes that need to be filled in the beef supply chain due to retirements & deaths. The vacuum that will be created by this will create a massive opportunity for those who are well positioned to step up & fill it. The only question is, as George Jones said, who's going to fill their shoes?

[cow pollinater]

As in all investing, buy slowly on the fall and the rise. No real successful investor buys at the height of the market. That's not where the money is made.

And as with all investing, you don't have to do it the same as everyone else to make money and there's no rule that says cattle have to be a long term investment. This discussion has focused on $3000 young bred cows/heifers and I agree that you could lose your butt on that pretty quick if you're counting on the market not to change for a few years but if you adjust to a short term strategy and buy older bred cows for kill price and plan on turning them around in the near future then you have calves that will stand a good chance of being sold into a really strong market and a cow that you have a really good chance of selling in a year or two for what you have into her.

[cow pollinater]

I'm more curious to see if this move toward quality pounds above else will finally kill the black is king mindset that so permeates the cattle industry.

I doubt it. Quality grade is the driving factor in the angus craze and that breed has had such dynamic growth in the volume of genetics that the are angus genetics that will fit into just about any situation beyond sheer yield grade.

Also CB brought up what I believe is the single most important & pressing issue that will effect the beef industry in the next decade or two. What is this industry going to look like in 20 years? I believe the average age of Americas cattle farmers & ranchers is the mid 50's. Simple math will tell you that in the next 10-20 years there's going to be massive holes that need to be filled in the beef supply chain due to retirements & deaths. The vacuum that will be created by this will create a massive opportunity for those who are well positioned to step up & fill it. The only question is, as George Jones said, who's going to fill their shoes?

I've never been able to buy into that. I know a lot of young guys who farm/ranch/dairy for a living. The problem is that they're working on multi-generational multi-million dollar operations as managers while their fathers and grandfathers are semi-retired. The young guys are running the whole operation but it's still owned by the older generation until the young guy is in his forties so when the USDA sends out the mandatory surveys for the owner to fill out it doesn't show that the real farmer is in his thirties.

[Caustic Burno]

I'm more curious to see if this move toward quality pounds above else will finally kill the black is king mindset that so permeates the cattle industry.

Also CB brought up what I believe is the single most important & pressing issue that will effect the beef industry in the next decade or two. What is this industry going to look like in 20 years? I believe the average age of Americas cattle farmers & ranchers is the mid 50's. Simple math will tell you that in the next 10-20 years there's going to be massive holes that need to be filled in the beef supply chain due to retirements & deaths. The vacuum that will be created by this will create a massive opportunity for those who are well positioned to step up & fill it. The only question is, as George Jones said, who's going to fill their shoes?

I believe this that the small operator will become extinct.
In my area alone in the last 15 years half of the salebarns are gone.
One or two more go due to volume, transportation cost will keep rising to a breaking point.
What happens when they all close there is no way to ship your product unless you have a pot
load there is no way you can turn a profit freight alone will eat you alive.
The only way you could a pot load together you and your neighbors would have to pool your calves.
Now that means that you are going to have to sync your operations.
Or open up a small slaughter house and meat shop if you can get through all the regs and money.
Today in Texas 90% of the cattleman run 35 head or less can't remember the exact percentage it was something like less than 2% were over 250. That is the survivors IMO. That is a lot of producers disappearing the void will be filled by corporations again IMO.

[Caustic Burno]

I'm more curious to see if this move toward quality pounds above else will finally kill the black is king mindset that so permeates the cattle industry.

I doubt it. Quality grade is the driving factor in the angus craze and that breed has had such dynamic growth in the volume of genetics that the are angus genetics that will fit into just about any situation beyond sheer yield grade.

Also CB brought up what I believe is the single most important & pressing issue that will effect the beef industry in the next decade or two. What is this industry going to look like in 20 years? I believe the average age of Americas cattle farmers & ranchers is the mid 50's. Simple math will tell you that in the next 10-20 years there's going to be massive holes that need to be filled in the beef supply chain due to retirements & deaths. The vacuum that will be created by this will create a massive opportunity for those who are well positioned to step up & fill it. The only question is, as George Jones said, who's going to fill their shoes?

I've never been able to buy into that. I know a lot of young guys who farm/ranch/dairy for a living. The problem is that they're working on multi-generational multi-million dollar operations as managers while their fathers and grandfathers are semi-retired. The young guys are running the whole operation but it's still owned by the older generation until the young guy is in his forties so when the USDA sends out the mandatory surveys for the owner to fill out it doesn't show that the real farmer is in his thirties.

CP you live in farm and ranch country as I did as a child.
The rice farmer is virtually extinct here it used cover the entire Gulf Coast counties.
The family farm is gone the county I live in is 96% owned by paper corporations today. We had dairy, hog,chicken, sugar cane etc. The place next to mine was 400 acres of sugar cane all gone along with the hogs my grandpa used to run a 100 sows along with cattle.
It has been replaced with pine trees as Jr. chose another way to earn a living. The only hog you can find
today is feral or a show one. Most of the chicken houses are empty and rotting to the ground.
Most of the pastures that ran cattle all my life between me and the 70 miles to the salebarn in Crockett
are empty and growing up in weeds. Lady at church this morning that runs a few dairy cows and has a little niche business ask where did all the cattlemen go. I told her to town.

[plumber_greg]

Don't ever forget-----------If something good happens to people, (whether it be weather, prices, etc), something bad has to follow. The people that forsee the future, or the common man who predicts the future, never believe good things can continue. Woo is them. gs

[js1234]

if managed properly, very good money can and is made at ALL points in the cycle.

[Jogeephus]

Jo we are getting hit now on slaughter cows prices sliding due to the San Antonio plant closing.
Somebody is going to take the hit for the freight always us.

Since the feds past the wholesome meat act there has been a lot of freight on our cattle as well. This, I think, is why very few people raise the fats. Cost per head freight drops significantly with increased number of head on the truck.

[TexasBred]

Don't ever forget-----------If something good happens to people, (whether it be weather, prices, etc), something bad has to follow. The people that forsee the future, or the common man who predicts the future, never believe good things can continue. Woo is them. gs

True with any commodity, product or service....but the smart informed manager can make money in any market. Might take a lot more work but can be done.

[jallen]

Good thread, but I don't agree with calling this high artificial. It happened and the prices are real. Will they last, of course not. Trends are trends, prices will go up and down over time. Plenty influences can affect the market, none will last forever but it doesn't make them artificial.

[Jogeephus]

Good thread, but I don't agree with calling this high artificial. It happened and the prices are real. Will they last, of course not. Trends are trends, prices will go up and down over time. Plenty influences can affect the market, none will last forever but it doesn't make them artificial.

Good post. This is all the more reason to be diversified in so far as possible. Some of the other commodities are in the tank so its nice to have one or two that are doing great. It sucks to be treading water on all and I remember several years of treading water with cattle. Its nice to finally have a good payday. But like they say, tomorrow is promised to no man.