Why do people have cattle if its so unprofitable?

[Radar]

Sure got quiet around here

[jds247]

Every bodies definition of living is different, 27kish is basically poverty bar. So you cant net/make 27k off 140 head on free land?

Let's say you pay 1000 a head for bred 4 year old cows 4 bulls at 2500 a head.. you have 110k in animals.. it takes 4 rolls of hay in my area to get a cow through the winter at 60 a roll that's 240 per cow. Then you have minerals for the year and protein for the winter . 100 per cow . She now owes you 1340 her first year and she hasn't sold a calf .. she will continue to owe 340 more every year while selling a 600 dollar calf if you are lucky .

So 260 dollars a year profit per cow . Not including the ones that dont Breed back or lose their calf.. if my math is right it will take an additional 4 years to pay the cow off completely.. before you see the first dollar.. now shes 8 or 9 years old and you need to start thinking about replacing her..

[Dale Moser]

Sure got quiet around here

I’m just over here taking notes, and eating more beef.


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[Worksalot]

I’m just over here taking notes, and eating more beef.


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Just now finished a burger.

[Radar]

I’m just over here taking notes, and eating more beef.


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I never did know they was so many smart people on this place, dang I feel dumb

[miket]

Sure got quiet around here

Im still here reading and learning. Problem is, not sure which ones I should be learning from!

[curtintex]

Im still here reading and learning. Problem is, not sure which ones I should be learning from!

I preface this with the fact that I've run some cattle, 200+ head, raised good grass, had good water and made mistakes at times too. I ran cattle in some of the best cattle country this state has to offer and was surrounded by people that also ran cattle...Some on a much larger scale than me and some less than 50 head. So, I'm gonna make it as simple as I can for you.....There is no freaking way that people raise cattle to lose money...no matter what bs flies out of their mouth and no matter what you read on this thread. If there was no money in cattle, we'd all be eating horses, goats or possums...something that there was money in. People, regardless of who these people are, do not raise nearly 95 Million head, in the Continental US, to continually lose money. That is complete and utter horse****. Now, maybe that profit isn't shown like it should be, maybe it is tax sheltered, maybe it is hidden in "capital improvements" or expansion. I'm not an expert in the cattle business, but a cattle business is still a business and NO BUSINESS CAN SURVIVE WHILE CONTINUALLY LOSING MONEY. You don't have to go to Wharton Business School to figure that crap out.

[BrianL]

So they have been losing money for 20 years on 8 figure revenues? How are they staying in business?

Again, losing money is different from “showing” a taxable loss.. It’s all about the cash flow, not taxable losses. If one can “make money” (positive cash flow) while showing tax losses, that is good, no great! We are getting tied up with semantics and some are talking about property tax exemptions rather than positive cash flows raising cattle.

I believe I said they will require an intention to make a profit by reviewing P&L's and business plans. You don't know it but I was a commercial bank lender for 12 years before getting into bank management for another 12 years. My info may be dated, but I know the IRS will not let people take losses for running a few head of cattle for infinity. The key is IF they audit the cattle bidness, the bidness will need to prove they are raising cattle with the intention of turning a profit.

https://turbotax.intuit.com/tax-tips...obby/L5NClTTtK

I did know you were a former banker.. I've been in the business 20 years this year.

I am strictly talking tax advantages as to why someone would raise cattle at a "taxable loss". Realistic if $50-100/head is what it's likely to happen. Improve property value, increase net assets, and decrease tax burden. My guess is you might do that as well.

P&L to me is completely different thing. Very important though because very few farmer or ranchers could operate without operating loans, tractor loans, ...

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[Texans42]

Let's say you pay 1000 a head for bred 4 year old cows 4 bulls at 2500 a head.. you have 110k in animals.. it takes 4 rolls of hay in my area to get a cow through the winter at 60 a roll that's 240 per cow. Then you have minerals for the year and protein for the winter . 100 per cow . She now owes you 1340 her first year and she hasn't sold a calf .. she will continue to owe 340 more every year while selling a 600 dollar calf if you are lucky .

So 260 dollars a year profit per cow . Not including the ones that dont Breed back or lose their calf.. if my math is right it will take an additional 4 years to pay the cow off completely.. before you see the first dollar.. now shes 8 or 9 years old and you need to start thinking about replacing her..

Been in cow calf my entire life, I’m not here for a one upper, I know the math, you don’t have to have them paid for to pay you a wage, you float the note and pay your interest. Your biggest expense is lease or land, if that’s free(minus minimal taxes) it’s extremely doable to make it above poverty.

If you are consistently year in year out supplemental feeding all winter you have a stocking rate issue. That’s an issue with in itself.

[mjhaverkamp]

Some ranchers do make money from cattle, why else would they have them ? I think if you own the land and have good grass you can scratch out a decent living running 150-200 head. I was one who did not make any money, have 230 acres and we ran 30 registered Limousin cows, it was enjoyable but not profitable.

[jds247]

Been in cow calf my entire life, I’m not here for a one upper, I know the math, you don’t have to have them paid for to pay you a wage, you float the note and pay your interest. Your biggest expense is lease or land, if that’s free(minus minimal taxes) it’s extremely doable to make it above poverty.

If you are consistently year in year out supplemental feeding all winter you have a stocking rate issue. That’s an issue with in itself.

Not a stocking rate issue.. we get 60 plus inches of rain and the ground is leached yearly.. if you don't fertilize and lime every other year it will be nothing but weeds in a few years.. some parts of the country is better for cattle.. cold rainy weather will put a hurting on a cow. Especially when shes standing in mud..
One thing I know for a fact you cant starve a profit out of a cow..

[Texans42]

Not a stocking rate issue.. we get 60 plus inches of rain and the ground is leached yearly.. if you don't fertilize and lime every other year it will be nothing but weeds in a few years.. some parts of the country is better for cattle.. cold rainy weather will put a hurting on a cow. Especially when shes standing in mud..
One thing I know for a fact you cant starve a profit out of a cow..

Your AU aren’t has high as you think then.

Are you selling dry cows on the gain come early spring? if the answer is no then you can starve a profit out of a cow. If you are correct AU’s she will gain it all back and still carry and nurse fine.

This is a whole other thread though.

[jds247]

Your AU aren’t has high as you think then.

Are you selling dry cows on the gain come early spring? if the answer is no then you can starve a profit out of a cow. If you are correct AU’s she will gain it all back and still carry and nurse fine.

This is a whole other thread though.

Why dont you ride over and take a look . Maybe you could teach me a thing or Two

[Bear Charge]

He can have mine for $25,000 an acre.

[Texans42]

Why dont you ride over and take a look . Maybe you could teach me a thing or Two

You just tried to tell me I couldn’t make 27k off 150head, because you had to feed all winter, and plus you have to wait until they are paid for to claim a check. I’ve run up to 300 momma cows and up to 1000 yearlings a year, in the panhandle with a tenth of the rain fall you get and I don’t have to feed 1200 bales a winter to feed cows. Only thing that I sell on the gain is yearlings and canners.

It absolutely does not take 4 calves to pay for a cow, a live mobile cow always has canner value at the very least. You are off by 3-3.5 calves. You just have to cover expenses and depreciated value.

Good luck to you.