- Feb 10, 2005
- Reaction score
- Alberta Canada
cowzilla said:What if you sell all the cows and keep your best heifers and buy a few. Go COLD TURKEY no calfing for 1 maybe 2 years just background . You avoided the taxman but still have inventory to get back in . I read a story written by Allan Nation in The Stockman Grassfarmer and he said to survive a sliding market you have to have the LIGHTEST animal so that you lose the least :!: just wondering what you guys think about this.A guy might have to rollover (background) 2 or 3 times?
Now your making me think again :wink:
This scenario again would mean watching the tax, you would have to be able to hold more hfrs than cows sold to advance your position.
Let's use some number to see. Sell cows at $1500 and buy back hfrs at $800? That sounds reasonable?? You could buy back almost 19 hfrs for selling 10 cows. You lose the income from those 10 cows in the next year, you paid $800 for hfrs; are calves still worth that is 1 question.
Year 2 you potentially sell 19 calves instead of 10 but we are by this time slid down in price... $700 for calves? That would be $13,300 instead of $8000 previously or $7000 with lower prices, but you had to run 19 instead of 10.
You could sell 9 bred hfrs and then 10 calves, be at the same cowherd size (but younger) and have more cash, 9 at say $1200 ..total is $17800. The 2 years calves would have been worth $8000 + $7000 = $15,000
So many factors come into play, how far does the market slide, how long can you delay income, tax situation after selling bascially 2 years of cattle in 1 year. It's worth investigating if you have flexibility, or need to rest some grass etc. Lot's of details.