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Time to Buy?

Posted: Wed Dec 21, 2016 10:44 pm
by mytfarms
Since I started posting on Ranchers, I have aged a tiny bit and gotten substantially dumber. By the time I have teenage children, I should have reached my dumbest point, only to gain wisdom from there. At least, my dad looks a lot smarter now than he did when I was 15.

As it pertains to you older, er, more experienced and seasoned cattle producers out there, how about that market? Articles all over the place talking about how the packer is messing us all over and how cattle are going to turn into the hog and poultry industries. I have my doubts on that opinion, but as it pertains to market pressures, what do you think about purchasing stock right now?

The wife and I are young, and both need "grown up" jobs plus a side hustle, but given that, does it make sense to sink a little borrowed capital into calf factories? I think the idea is to buy low and sell high, but my crystal ball is cracked and not telling me when to pull the trigger on breds that will wean calves at the top of the market.

Re: Time to Buy?

Posted: Thu Dec 22, 2016 1:28 am
by perfecho
IMHO.....don't try to beat the markets, buy what you are comfortable with and sell the same way...you may not hit the highs, but you shouldn't always hit the lows. If you "have to" top the market, it won't be fun!

Re: Time to Buy?

Posted: Thu Dec 22, 2016 7:11 am
by Denny
Slow and steady you'll be amazed how fast they accumulate once you start retaining 10,20,30 or 40 replacement heifers. This business is for the long haul no sense rushing it. Don't ruin a marriage over some cows make sure your both on the same page as goals go.

Re: Time to Buy?

Posted: Thu Dec 22, 2016 9:10 am
by Faster horses
Good advice posted above. Also, an old cowboy told us, "don't love something that can't love you back." :D

Good luck to you. I'm sure whatever you decide will be fine. There will be ups and downs, but you will get through it. We
all have.

Re: Time to Buy?

Posted: Thu Dec 22, 2016 11:11 am
by Triangle Bar
Just because they are lower than the crazy highs we have seen recently, doesn't mean that they won't go lower. No one has a crystal ball. It seems simple supply and demand are only incidental to the price fluctuations. There are too many outside forces affecting our markets.

Like everyone else here, I've borrowed money on bred cows. It's painful when you sell every calf you have and it still doesn't make the mortgage payment. These things can happen and it needs to be a part of your financial decision. I agree with Denny, the cow/calf business is a long term proposition. Hopefully you can pay your bills and live comfortably. Once in awhile the market goes your way and you get a bonus.

Re: Time to Buy?

Posted: Thu Dec 22, 2016 3:08 pm
by mytfarms
Very good to hear a few different viewpoints, as always! I am certainly the cow lover of the two of us, but they do come second to our more important endeavor of staying hitched.

I am waiting to see if we take another little dip during the late winter/early spring. I need to trade out a few old cows with younger, and continue the slow progression I've been making.

Re: Time to Buy?

Posted: Thu Dec 22, 2016 4:26 pm
by Big Muddy rancher
Slow and steady is probably the way to go,

My son is just picking up a few here and there, keeping a few hfrs, just never seems fast enough for the young.

Re: Time to Buy?

Posted: Thu Dec 22, 2016 7:44 pm
by Faster horses
mytfarms, I will tell you what a successful rancher mentioned to us at one point. He bought cows every year because he wanted to keep a basis in his cowherd for tax purposes. He said he ALWAYS could buy pairs cheaper in the spring for the same money or less than he could buy a bred cow in the fall.
Now there is a FWIW. :D

Re: Time to Buy?

Posted: Thu Dec 22, 2016 8:10 pm
by PureCountry
I jumped into cows and taking over the ranch from my folks in my early 20's. All I can say to you is if I could go back and do it over, I would. I wouldn't buy cows. I'd rent the land instead of buying it in order to keep my overhead low, and I'd custom graze cattle for other people. Let the risk be on others while you're young. Build your skills, experience and cashflow without having to borrow a bunch of money. That's what I would do over if I could.

Re: Time to Buy?

Posted: Thu Dec 22, 2016 8:28 pm
by AC Diesel
It's tough starting from scratch, I bought some land first and then bought the cows. I've bought em at $1,000 and $2,000, all with a lot of borrowed money, but things have come together well. It does seem to take a long time but as Denny said you have to be in it for the long haul. If a fella keeps working at it, it will come together and you will of had a lot of fun getting there.

Re: Time to Buy?

Posted: Thu Dec 22, 2016 11:50 pm
by Faster horses
AC Diesel wrote:It's tough starting from scratch, I bought some land first and then bought the cows. I've bought em at $1,000 and $2,000, all with a lot of borrowed money, but things have come together well. It does seem to take a long time but as Denny said you have to be in it for the long haul. If a fella keeps working at it, it will come together and you will of had a lot of fun getting there.



Seems like if you can get the land, you can always get the cattle. For us, we were suitcase cowboys for 10+ years, as we didn't have the land. :D

Re: Time to Buy?

Posted: Fri Dec 23, 2016 8:01 am
by George
I guess I'm the odd duck out - - - other than for a mortgage I don't borrow money - - - I guess that is why every piece of equipment and every vehicle was used except for the 1978 chevy 4X4 I bought new ( still paid cash when I sold a load of hogs ). It served me well to over 500,000 miles but as any tool it passed its us-full life.

Many times I could probably have done good by borrowing but when I was young my father ( he was killed when I was 9 ) drilled into me to pay as you go.

I have many big boy toys but most of them were bought from a junk yard and rebuilt by me. The last decade I am still buying used but buying better than I have in the past.

Is my way the right way? I don't know but I have seen many who have borrowed and looked like the smart guy out there and a few years later they were losing everything.

I have bought my cattle a few at a time - - - took time to build up but no debt. Also I have mostly tillable ground and the cattle are as much a loved hobby as anything so that would make a difference. If I look back over the decades it is amassing to me that I have had the success I enjoy when so many others much smarter than me have failed.