I Just Paid My Taxes

[Oldnslo]

I need a drink.


and a hug.

I'm going to go lie down now.

[C&CDean]

Heh. I'm projecting to get back ~$20K this year.

Owning a farm rules.

[BudSooner]

Dean, after you paid the bills on the place, what is the margin of profit in owning a farm? You don't have to answer, I just wondered since my uncles brother has about 130 head of Angus cattle, with some milk cows thrown in, he's always talking about selling out due to costs involved with running the place, equipment and such. It's about 75 acres out near Beggs btw.
It wasn't in the family fwiw, he bought it about 25yrs ago.

[C&CDean]

Dean, after you paid the bills on the place, what is the margin of profit in owning a farm? You don't have to answer, I just wondered since my uncles brother has about 130 head of Angus cattle, with some milk cows thrown in, he's always talking about selling out due to costs involved with running the place, equipment and such. It's about 75 acres out near Beggs btw.
It wasn't in the family fwiw, he bought it about 25yrs ago.

If he's running 130+ head on 75 acres then his feed bill must be astronomical. For him, it couldn't pay.

To make a cattle operation profitable, you have to operate on a cash-only basis. If you ever buy property/cattle/feed/seed/fertilizer on credit, you're ****ed. Equipment? It's OK to finance - especially if you're getting a 0% deal from John Deere like I am on my new 7230. You also have to keep yourself positioned to operate just like somebody who is playing stocks. Buy when they're low, sell when they're high. Sometimes you have to unload some cattle (I sold 10 calves a couple weeks ago while beef prices were down) because I needed them out of the herd due to their age. I've also been buying bred momma cows because they're pretty cheap right now.

In all honesty, if you have to pay today's prices for a hunk of land, it'll probably never become profitable to run cattle on it. What I do is supplement my cattle income by selling hay, and custom baling for other folks. I also harvest pecans for myself and customers.

One thing I have going for me that most farmers don't is that I don't have to make a profit on the farm to pay the bills. I make enough $$ with my "real" job to take care of everything. Anything I make on the farm is gravy. Also, there's a lot of money made in farming that doesn't show up on any of Uncle Sam's paperwork. I don't personally know anything about this, but I've heard about it...

[Oldnslo]

The way it was explained to me is this:

You don't run cattle to make money. You run cattle to pay for the land.

I, however, am a 100% city boy who knows absolutely **** about dick when it comes to this topic. I've got in-laws who laughed at me, to my face, when they discovered I'd never been on a combine.

On the other hand, I know which fork to use in a restaurant. Beyotches!

[OUDoc]

Also, there's a lot of money made in farming that doesn't show up on any of Uncle Sam's paperwork. I don't personally know anything about this, but I've heard about it...

No wonder Dolemite comes over so often.

[Turd_Ferguson]

If he's running 130+ head on 75 acres then his feed bill must be astronomical. For him, it couldn't pay.

To make a cattle operation profitable, you have to operate on a cash-only basis. If you ever buy property/cattle/feed/seed/fertilizer on credit, you're ****ed. Equipment? It's OK to finance - especially if you're getting a 0% deal from John Deere like I am on my new 7230. You also have to keep yourself positioned to operate just like somebody who is playing stocks. Buy when they're low, sell when they're high. Sometimes you have to unload some cattle (I sold 10 calves a couple weeks ago while beef prices were down) because I needed them out of the herd due to their age. I've also been buying bred momma cows because they're pretty cheap right now.

In all honesty, if you have to pay today's prices for a hunk of land, it'll probably never become profitable to run cattle on it. What I do is supplement my cattle income by selling hay, and custom baling for other folks. I also harvest pecans for myself and customers.

One thing I have going for me that most farmers don't is that I don't have to make a profit on the farm to pay the bills. I make enough $$ with my "real" job to take care of everything. Anything I make on the farm is gravy. Also, there's a lot of money made in farming that doesn't show up on any of Uncle Sam's paperwork. I don't personally know anything about this, but I've heard about it...Question for ya Dean. When you sell cattle, why does your insurance also pay you?

[C&CDean]

Question for ya Dean. When you sell cattle, why does your insurance also pay you?

Huh? My insurance? No comprende.

[Turd_Ferguson]

Huh? My insurance? No comprende.I heard my bro tellin Dad over Christmas that he'd sold a bunch of his 400#'rs a week or so ago, for .98 lb and that his insurance paid .13 lb, and that it sure made a big difference when your talk'n 20 or 30 thousand pounds.:confused: Not sure, I didn't ask him about it. Thought you might know.

[C&CDean]

I heard my bro tellin Dad over Christmas that he'd sold a bunch of his 400#'rs a week or so ago, for .98 lb and that his insurance paid .13 lb, and that it sure made a big difference when your talk'n 20 or 30 thousand pounds.:confused: Not sure, I didn't ask him about it. Thought you might know.

Ah, now I get it. He must have some fairly high-bred cattle that he paid a lot of $$ for. I don't insure my herd mainly because I pay cash for them (or raise them from calves myself), and if they die, I claim it on my taxes. I have built my herd up from 6 mommas and a single bull to about 50 mommas, a couple bulls, and a ****load of calves. I don't have any $$ riding out there that I feel the need to cover with insurance.

BTW, .98 for 400 pounders isn't very good - even in today's market. I got 1.08 for 450 pounders, and .92 for 550's, and .88 for 620's a couple weeks ago. 400 pounders should bring at least 1.10 or so.

[BudSooner]

If he's running 130+ head on 75 acres then his feed bill must be astronomical. For him, it couldn't pay.

To make a cattle operation profitable, you have to operate on a cash-only basis. If you ever buy property/cattle/feed/seed/fertilizer on credit, you're ****ed. Equipment? It's OK to finance - especially if you're getting a 0% deal from John Deere like I am on my new 7230. You also have to keep yourself positioned to operate just like somebody who is playing stocks. Buy when they're low, sell when they're high. Sometimes you have to unload some cattle (I sold 10 calves a couple weeks ago while beef prices were down) because I needed them out of the herd due to their age. I've also been buying bred momma cows because they're pretty cheap right now.

In all honesty, if you have to pay today's prices for a hunk of land, it'll probably never become profitable to run cattle on it. What I do is supplement my cattle income by selling hay, and custom baling for other folks. I also harvest pecans for myself and customers.

One thing I have going for me that most farmers don't is that I don't have to make a profit on the farm to pay the bills. I make enough $$ with my "real" job to take care of everything. Anything I make on the farm is gravy. Also, there's a lot of money made in farming that doesn't show up on any of Uncle Sam's paperwork. I don't personally know anything about this, but I've heard about it...

It's true that he is in hip deep when it comes to the feed bill, and he does sell alot of hay, but in the end it sounds as if he's barely breaking even.

Most if not all of his equipment is paid for, aside from the new baler he had to get, the old one was right at 25yrs old and spent more time down than running. Which I guess in that respect is what keeps him afloat, I don't get it...I guess it's one reason i'm glad i'm not in the business if you can call it that anymore.
He's told me he wants to thin out the cattle he has, money is getting tight and working for the city of Tulsa...well, he's ready to retire and just focus on things around the farm.


It may not be long before he just calls it quits, one thing about the land it is it's awesome for hunting with the creeks and nearby food plots, which is one reason I see him keeping a part of it should he sell some of it. He's had guys wanting a deer lease on the property for years, i've been on it twice and haven't gotten anything but then i've not been in what he calls the best part of the land.