Developing a Farm Business

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Caustic Burno
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Re: Developing a Farm Business

Postby Caustic Burno » Tue Dec 09, 2014 1:50 pm

TexasBred wrote:
muleskinner wrote:Just a note from our Extension service. They say if you are running 30 cows or less, don't buy equipment. It is cheaper to buy your hay and inputs than to grow your own.

Even when milking 400 head of cattle I also felt I could get higher quality hay for less money than I could put it up myself. I can be selective rather than being stuck with what I grew and then have to supplement it.


When I had 35 head and bailing hay for myself and neighbors I had 36 dollars a roll in my hay.
That was back in 2010. Hate to see what that would pencil out today.
Small scale increases input cost. A hay baler can make a preacher cuss. Nothing I mean nothing can go
fubar as bad as a hay baler.
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SteppedInIt
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Re: Developing a Farm Business

Postby SteppedInIt » Tue Dec 09, 2014 6:04 pm

GACowboy wrote:I've got 30 cows already yet I am looking at doing an LLC. Or Farm business so I am not tying up my credit. I mean I am sure a bank wouldn't like seeing a note on my credit report for $70,000 worth of equipment when it comes time to buy a house. Also would a business help by means of tax brackets and help cover you if a lawsuit came down?


Setting up an LLC is easy, at least here in TX. Cost $300 and a few minutes on the internet. There are benefits in doing business as an LLC that you can google and read all day about. I believe its especially beneficial when you have partners, instead of creating a partnership. A partnership has no protection like a LLC. As far as taxes go, if you are the sole member of the LLC, the IRS treats it as if you are a sole proprietorship. There are grey areas as to lawsuits and protection. Having the LLC is not a guaranteed protection for sole member LLC's, but I guess its better to have the LLC. I believe this varies by state.

I created an LLC with the state with the intensions of separating the cattle business from my personal affairs and some of the other reasons as discussed.
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bverellen
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Re: Developing a Farm Business

Postby bverellen » Tue Dec 09, 2014 7:42 pm

The most profitable ranchers don't own any land, cattle or equipment. Think about that awhile.

A small operator would be money ahead to buy in his hay(fertilizer and micro nutrients), avoid the money and time involved in growing and making hay, and use his hay fields to run more cattle.

According to Gordan Hazard all you need is a pick-up and a two hammers to run cattle.(two hammers in case you lose one)
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Re: Developing a Farm Business

Postby Nesikep » Tue Dec 09, 2014 10:48 pm

I would also minimize the equipment purchased.. If a neighbor has a WORKING baler for sale, pick that up and an old, working sicklebar haybine... you can set yourself up for $10,000 easily... it can even include the tractor.. that is something you can buy on a line of credit if need be and can pay off in a weeks notice by selling a couple cows and calves... $70,000 is going to take selling the entire herd.
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Son of Butch
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Re: Developing a Farm Business

Postby Son of Butch » Wed Dec 10, 2014 4:50 am

IMO
With 30 cows the fewer wheels the better. Equipment costs, fuel ect. can quickly and easily eat up any money they produce.
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Re: Developing a Farm Business

Postby cowgirl8 » Wed Dec 10, 2014 6:09 am

I dont know how anyone could start up a farm business now days unless they take over a family business. With the price of land, equipment and how many hours you have to work, there arent many left who will dive into that. And if you dont already have mechanical skills you are at the mercy of repair shops and long waits. If you dont do your own baling, you're at the mercy of the custom guy and weather. Out of our 4 kids, our son is the only one interested in doing this work. He's got a good start, so i hope he carries on and takes over. We just hope inheritance taxes dont take it away from him. We were very fortunate when we got our place, land was at the lowest ever, people spend what we paid per acre on a good meal out now...lol.. We just had to tame the area, but it paid off in the long run. Land down the road, unimproved, is listed for 3000 an acre. Thats even more unbelievable than 3 dollars a pound at the sale barn.
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Caustic Burno
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Re: Developing a Farm Business

Postby Caustic Burno » Wed Dec 10, 2014 7:48 am

Son of Butch wrote:IMO
With 30 cows the fewer wheels the better. Equipment costs, fuel ect. can quickly and easily eat up any money they produce.


Yea buddy they do, I got to counting tire's around here one day amazed at how many you can acquire.
If it has testosterone or tires it will give you trouble.
I have no idea how someone gets started today, when I bought my place sold the timber and paid for it.
You can't find that today.
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Re: Developing a Farm Business

Postby highgrit » Wed Dec 10, 2014 8:16 am

The way I see it is, I'm going to depend on myself and my family to get things done. The heck with depending on other folks, your going to be last in line. I've decided to go in the cow business for the long run. It got to the point of either get bigger or get out. The best move I've made dollar wise is buying my own hay equipment. It's opened doors to folks that I can work with. We're sold out of hay already, wish we had 300 more. There's money to be made hauling cows and calves for folks also. I've bought some nice cows that way already. Stay busy, treat folks fair and if you can't make it CALL them.
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Caustic Burno
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Re: Developing a Farm Business

Postby Caustic Burno » Wed Dec 10, 2014 8:22 am

highgrit wrote:The way I see it is, I'm going to depend on myself and my family to get things done. The heck with depending on other folks, your going to be last in line. I've decided to go in the cow business for the long run. It got to the point of either get bigger or get out. The best move I've made dollar wise is buying my own hay equipment. It's opened doors to folks that I can work with. We're sold out of hay already, wish we had 300 more. There's money to be made hauling cows and calves for folks also. I've bought some nice cows that way already. Stay busy, treat folks fair and if you can't make it CALL them.


Now you can make a cattle trailer pay for it self here.
I haul regularly for several. Hay is a different story here unless
your place alone is big enough to keep you bowed up.
I think a lot would have to do with the area, since the drought it changed everything here.
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bverellen
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Re: Developing a Farm Business

Postby bverellen » Wed Dec 10, 2014 9:32 am

If you truly want this to be a profitable business and not a hobby, you should do you and your family a a huge favor and invest in some education that will help make this venture profitable.

Sign up and attend "Ranching for Profit" school, put on by Ranch Management Consultants. This will be the absolute best money you will ever spend on yourself, your family and your ranch.

Link: http://www.ranchmanagement.com/

These folks won't teach you or tell you how or what to ranch. They, and the class, will help you to think about what you want, what you are doing, and make your self ask yourself why you are doing what you are doing.

You will start to think out of the box and look for ways to be profitable. You will begin the process of planning your business for success.

Between the 7 day class and hotel accomodations, it will cost you upwards of 3 grand. Sounds expensive, but consider the cost of 2 good cows or 3 dead calves and you already paid for the class. Alot cheaper and more effective than running out and getting a $70,000 loan so you can play weekend rancher.

This was the most challenging and eye opening course that I ever took, and has changed the way I look at ranching & business forever.

There is life time support after the class by other real world ranching peers, by the company and by the freindships you will make along the way.

You could puchase the book by Dave Pratt, the founder, entitled "Healthy Land, Happy Families and Profitable Businesses". Link: http://www.ranchmanagement.com/book/book.html

This book alone will give you a taste of what the school is about and the advise given within will make/save you potentially hundres of thousands of dollars over the span of a ranching career.

I'll bet alot of folks are going to poo-poo all over this post, but I'd be asking them if they really know the true cost of production, their true margins and if they are really making a profit after taxes, overheads, interest, fair wages, equipment costs, operating costs, depreciation and opportunity charges. Most places won't pencil out no matter what excuses they come up with.

I challenge you or any other person wanting to get into ranching or who wants to ranch and be able to quit their day job to look into this school.

Good Luck.

Bart VerEllen'
South Central Iowa
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Re: Developing a Farm Business

Postby Stocker Steve » Thu Dec 06, 2018 1:50 pm

Dave Pratt will be in Minnesota next week, doing a series of one day workshops, for a cost of $45 each, including lunch.
I understand that he is an excellent speaker. What do you think about Thief River Falls Aaron?

(This is NOT the week long class mentioned above.)
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