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Opinions on properties ability

J

JRDbuilt

Member
Joined
Aug 21, 2008
Messages
24
Location
Atlanta, GA tre
It has been awhile sense ive posted but im looking at a property to call home. 226 acres 65 of which are currently row crop with high quality soil through out. other than the 65 everything is fenced / cross fenced pasture land.

the property is an existing ranch and is fairly cheap for the amount of land.

my question is could this property run enough livestock ( my choice would be black angus) to make money?


Thanks
CJ
 
JRDbuilt said:
It has been awhile sense ive posted but im looking at a property to call home. 226 acres 65 of which are currently row crop with high quality soil through out. other than the 65 everything is fenced / cross fenced pasture land.

the property is an existing ranch and is fairly cheap for the amount of land.

my question is could this property run enough livestock ( my choice would be black angus) to make money?


Thanks
CJ
Click to expand...

Lots of questions to ask - but try this on for size.

If you can make 150 bucks pure profit on a cow - can you afford to pay the mortgage with the number of cows you run - or at least make a profit - probably not.

Then remember the national average for cattle profitability is far less than the 150 I stated - some will tell you it is less than 50 bucks and some will say it is negative. Either way - if you have not PAID for the land you are out of luck.

Run some for fun - rent the crop out and go to work.

Remember - just because it is registered does not mean it is any good - more crap papered cattle out there than there is good stuff.

Take a 1,000 bucks - buy a couple head - keep them and breed them and so on - add NOTHING to that 1,000 bucks - if you have money left over at the end of the year then do some figuring.

You said somewhere the land is high quality and is - or has been row cropped - someone will find that land valuable - and the right person will also look after it. Lots of horror stories out there - but far more good ones - as rented land is being used by more and more people.

Pay for the land first - then and only then do you need to think about other things.

Rent to the right person will bring you more money and less work - avoid debt and pay it off asap.

Then you can develop.

Only way to make money is to pay off your debt.

As for making money with cows - I hate to say it but I truly do not believe you will. Initial expenses will eat up profit big time - so you will work out to support your hobby - which is fine should you like doing that.

Your trouble is it sounds like you were not smart - me either for that matter - you should have married "rich" or married "ranch" - instead you had to buy it! :D

Use your options and remember - cattle are high maintenance and low return.

They are negative return to anyone who is paying a mortgage or has any debt.

No matter what you do - go slow - pay cash.

And remember - go slow and pay cash.

Best to you

BC
 
Thanks for the quick yet info filled reply!!

To answer some of the things I saw.

I will start off with some info about the ranch. the original owner has set it up so the cattle are straight grass fed year round.

-I will have a mortgage payment anyways and it would be the same if i stay where im at now.

-the property has close to 100 head already on it. Alot of very good size / healthy looking cattle. and about 25-30 calfs.

- the crop land would only rent out for around 100 bucks an acre as it just has a traveler on it and no pivot. 6500 bucks really doesnt sound too appealing if i could do better with the land.


But im open to any option in the sense of crop or other livestock.

thanks again for you guys time!
CJ
 
Columbus took a chance.

As I look back 50 or so years ago, I wish I had listened less to the old guys advise. No, I don't mean to take reckless chances, but do some real down to earth figuring. Remember dreams never come true. Set down, use the real figures, then take about another 15% for a margin of error. Look it over real hard again. It's your decession. You have to learn from your own mistakes, not from others. No one can climb your mountain or tell you when to climb.

Oh, by the way this too is an old guys advise.
 
JRDbuilt said:
Thanks for the quick yet info filled reply!!

To answer some of the things I saw.

I will start off with some info about the ranch. the original owner has set it up so the cattle are straight grass fed year round.

-I will have a mortgage payment anyways and it would be the same if i stay where im at now.

-the property has close to 100 head already on it. Alot of very good size / healthy looking cattle. and about 25-30 calfs.

- the crop land would only rent out for around 100 bucks an acre as it just has a traveler on it and no pivot. 6500 bucks really doesnt sound too appealing if i could do better with the land.


But im open to any option in the sense of crop or other livestock.

thanks again for you guys time!
CJ
Click to expand...

What it has on it and what you personally can run and operate are two very different things.

6500 clean and pure profit from rent while you plan, pay and work - seems like a good deal to me.

Kill all debt first.

You will not likely do that with cows for a lot of years - and maybe never - they are expensive.

Be that as it may you can always have some fun and spend a lot of money

100 bucks per head profit on 65 cows is 6500 bucks.

If you do this - and trust me I am not being confrontational - I would be very surprised.

Bet you do not hit that for 15 years.

If you can keep a cow for less than a dollar a day you will do well. Just because they are on grass does not mean they will stay there - it costs to keep grass growing and everyone here will tell you the same.

Lots of ways to make money - but that old guy with the rusted out truck and religious (holy) coveralls is me - I can pound a penny into a dime and if I am lucky I can make it a quarter.

You cannot. Yet.

Do not be in a hurry.

Go slow. Pay cash. Take the rent for 10 years and put it to something else. Do not touch it - or do the 1,000 buck thing that I suggested - bet you end up throwing more money in on top. Lots of surprise costs.

I spent 45,000 on fences over the past few years. How much can you afford? Fertilizer? Vet? Carpentry? Mechanical?

You need to sit back and do a little planning while someone else gives you money. Just pick the right person - and they do exist.

I will say it again - go slow and pay cash. If you are even in 10 years be happy - be very, very happy.

I sure would be and so would a whole bunch of others.

Have fun and do as you see fit - but have a back up plan.

Out of this one - best to you

BC
 
Clarencen said:
Columbus took a chance.

As I look back 50 or so years ago, I wish I had listened less to the old guys advise. No, I don't mean to take reckless chances, but do some real down to earth figuring. Remember dreams never come true. Set down, use the real figures, then take about another 15% for a margin of error. Look it over real hard again. It's your decession. You have to learn from your own mistakes, not from others. No one can climb your mountain or tell you when to climb.

Oh, by the way this too is an old guys advise.
Click to expand...
My late uncle often warned me not to take advise from someone over 50. His reasoning was that your focus changes to a risk adverse position and you loose the reward gained by risk.
 
I don't see it as a very good answer unless you were to clarify a few things. How can you tell JRD that there's no money to be made in cows? Wouldn't it be far more accurate to tell him/her -

"There is no money to be made if your cost of production is higher than your gross return?" or how about, "There is very little chance of making money by selling live calves straight off the cow."

You don't know how far he/she is to a butcher and populated center. It's entirely possible that he/she could get a direct marketing business going selling grass-finished beef, pork, lamb, free-range chicken and eggs, vegetables and fruits, etc. There are endless possibilities right now for healthy FOOD PRODUCTION, for someone willing to do a little work.

I wouldn't advise trying to make anything selling live animals, as BC already told you. Just wanted to clarify and point out that there are certainly options. Check out AcresUSA magazine or the Stockman Grassfarmer paper for lots of ideas.
 
PureCountry said:
I don't see it as a very good answer unless you were to clarify a few things. How can you tell JRD that there's no money to be made in cows? Wouldn't it be far more accurate to tell him/her -

"There is no money to be made if your cost of production is higher than your gross return?" or how about, "There is very little chance of making money by selling live calves straight off the cow."

You don't know how far he/she is to a butcher and populated center. It's entirely possible that he/she could get a direct marketing business going selling grass-finished beef, pork, lamb, free-range chicken and eggs, vegetables and fruits, etc. There are endless possibilities right now for healthy FOOD PRODUCTION, for someone willing to do a little work.

I wouldn't advise trying to make anything selling live animals, as BC already told you. Just wanted to clarify and point out that there are certainly options. Check out AcresUSA magazine or the Stockman Grassfarmer paper for lots of ideas.
Click to expand...

All those things sound good but where is all the labor going to come from for the many aspects of that kind of operation.
 
lots of really good straight forward advice! thanks for your time guys!!

But when you say you look back and wish you didnt listen as much to the old mans advice are you telling me to not listen to yours?

what doesnt make sense though and im looking for clarifcation on it is if theres no money to be made why are their cattle ranches, why are there feed lots, etc.



and purecountry the organic and direct sale is something im looking very hard at! i dont mind hard work and this isnt my old source of income. i work on high end drag cars and broker race car parts. I can do my business anywhere and honestly where this ranch is is closer to my favorite tracks.
 
BC is not wrong.

Neither is Pure Country.

In today's market conditions, it would be hard to sell calves off the cow and make any money. To set up to background or finish means a significant investment, although it sounds like the land would produce the feed required to do either of those.

It appears that you are close to the Big City of Atlanta so you have a ready made market for selling cut and wrapped beef.

But that will take a lot of work to develop that market and you will not likely be able to step right into a full fledged market for all the beef that the property will support.

So it would seem like one option would be to start with a manageable number of cattle and hopefully you have an income that will allow you the time it will take to create your own cattle herd and market for the beef you produce.

In any case, you will not get rich overnight! :wink:

P.S. your post above this one got sent about 1 minute before mine so you answered a lot of the issues I brought up.
 
also the property has all new fencing and cross fencing. the ranch has been owned by the same man for 40 some odd years and has had the same layout. he told me when i went down to look at the property he has everything set up to be able for himself to run up too 100 head.

im definitely not looking to get rich over night even thought it would be nice haha. but just want it to be able to hopefully pay for itself i guess.

trying to be able to do my 2 loves as sources of income. ranching and racing. got racing down just would like to do the ranching thing to carry it on another generation in my family.
 
JRD, Purecountry and I are both under 50. :? Haven't met any of the other posters. I am a nothing ventured nothing gained kind of guy. Land, even overpriced land, is usually a good investment over the long run whether you can get it to pay for itself or not as long as you can service the dept. 100 head is not a full time thing even with a freezer or value added component. If you can mix your 2 favorite things and build equity in the land then by all means go for it. If you ask me in and few more years, disregard this advise.
 
Denny said:
All those things sound good but where is all the labor going to come from for the many aspects of that kind of operation.
Click to expand...

Well Denny, think outside the box a little - the wife and I do it with 4 kids, me brand inspecting, and I still find time to chime in here a time or 2 throughout the week. Most days I feel like I could be busier.
 
If you are already making a good living in the drag racing business and can continue to do so you are better off than those trying to do it from scratch. And by all means, your present income will be usefull to buy all those write-offs. The land should be a good investment for the long haul and of course the cattle will keep the agriculture exemption on the property tax.

I'd say you are in business if you can pay the mortgage from your racing business so you can use the "income" from the cattle to support the ranch. $6500 a year from renting out the farm land would sure be some nice income insurance to help pay the mortage.
 
I am still just surprised the little profit that is being said with cattle. ive talked with some others and they are saying i can make a living off of 200 head of cattle and so on. and on here that would only yield be around 30000 a year in the big end. which actually would cover my mortgage for the year.

and thats why im asking these same questions ive got anywhere and to anyone i can to see peoples opinions and advice. doing as much research as i can.


If i used the ranch and did the direct sale route and had different kinds of organic meat pork, poultry, beef. would it be more profitable than just raising and selling cattle.
 
None of us can tell you what WILL be profitable. We can only offer ideas and YOU are the one who will make or break it. I will say that there is certainly far more POTENTIAL for profit with direct marketing. It's simple - there are less middlemen.

Do the math on it - to run a cow for a year will cost you between $400 and $700 depending how much you feed them/pamper them, etc. If you sell calves for $500, there isn't much rosy looking about that now is there?

You could keep your calves over the winter until they are yearlings and much bigger. They'll be worth more, but you will have also incurred the costs of keeping them that much longer, and you still have to find a buyer or take them to auction where you will always be a "Price-Taker" instead of a "Price-Maker".

With direct marketing a beef animal you could say $1000-1200 cost of production by the time they are ready for slaughter - whether you fatten them on grass or on grain. You can sell halves or whole beeves by the pound for $3-who knows how high depending on the economy in Atlanta and area. How that works is you get the weight of the carcass from the butcher, which will most likely be 600-800 lbs, times your price, say $4/lb, and you could gross $2400-3200 PER HEAD.

Of course you'll have $400-600 minimum for processing fees at your butcher, but it's still alot better looking scenario than selling $500 calves. Then when you stack your enterprises, meaning you incorporate pork, chicken, turkeys or what-have-you on the same land base, you can see substantially more profit. We have free-range pigs that we keep in 15' x 20' pens that I move every morning. Takes me 10 minutes to move them, water them and fill their feeder.

Remember, keep an open mind and keep asking questions. You'll figure something out. I know people who are making $2000-5000/acre growing food and marketing it themselves, on less land that you're looking at buying.
 
Another option for QUICK cash flow would be to custom graze for other people. Much like renting the land out, except they bring you their cattle and you care for them. People could bring you 100 yearlings or so, say on May 1st. You charge 85 cents/day and keep them for 100 days and you'll have grossed $8500 with doing little more than checking fence, water, and moving them once in a while to new grass. If the fence is already there for such things it could be easy. That way you also have no cows around in the winter to worry about.

You could do it for the first few years to help pay down the mortgage. We've done it here.
 
That 65 acres you cash rent, could give you 65 acres of residue to graze in the winter too if you stipulate they grow high residue crops. 100 cows eat a lot of feed, you don't want to get caught buying enough feed to feed that many cows in a drought.
 

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