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Prospective opportunity to increase our cowherd

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leanin' H

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Good evening. I have been approached by a friend about the possibility of buying his bunch of cows. They would also come with a Forest Service permit for grazing from mid may to mid October. With my current leased ground, I would be looking at feeding them from late December through the end of march most years. There would be an occasional winter where the grass would be covered up in November. While I really want to expand and this would allow me to do that, I would have to have financing for this purchase as well as operating expenses. If we buy them, I would need to buy hay for wintering them every year as I cannot raise the amount of hay needed here. I would also have to look at equipment as I have none and would either have to pay others to go with 3 by 3 by 8 bales or keep using my back and small squares. Right now as a preliminary discussion, I feel I could pay off the cowherd and permits in 10 years. That includes raising our own replacement heifers, buying bulls and selling calves as weaned calves each fall. My long term objective would be to keep all our calves to sell as fat beef, but that will happen over time. This isn't a big-time deal folks, it's for 32 head. But it would be a big step for us.

My questions for you all are as follows;

1- Would you be willing to visit with me about your business plan? I am not looking for specifics or personal info. More of a general outline and what works for others in similar situations.

2- I am not willing to put my home into the deal as part of the equity. These cows will pay for themselves or they will not become mine. Is that being to naïve?

3- And for those of you who run cow/calf operations on permits from the Forest Service or BLM, I am looking to find a value for that permit. Of course I want to spend as little as I can and the seller wants as much as he can get. I would just like some numbers as a reference point as we discuss this deal.

I would love your input and a PM would be fine if you do not want to discuss stuff in an open forum. Even better, may be to exchange phone numbers and visit that way. I will never be able to buy enough cows to quit my job and just ranch. But I would love to keep expanding and this would allow me to do that for sure. I have that double recessive gene that makes me love all things ranching and cattle. If this comes together, it would be a dream realized! But I have to make it pencil out and would appreciate input from you guys and gals who have more experience in our industry. I thank you in advance for your time and thoughts. I have made many friends here and would appreciate your advice.
 
I guess H a couple of things leap out when I read your post, the variables that you have little control over. The price of calves and the cost of purchased hay. If it were me I would try get get a idea of what calves brought in your area over the last ten years and what hay has cost. Grazing leases and interest for instance are fairly predictable. In this area I couldn't feed hay all winter and have anything left, and I raise most of my own hay. We have had some wonderful years with calf prices because so many had to sell cows because they couldn't afford to feed them during drouth years.
 
The talk around here is that most years you can buy hay for less than the cost of owning the machinery to raise it. We have
only raised our own hay (most years) so I can't attest to which way is best. But with a full-time job, I would think buying it would
work well for you, year in and year out. We have had customers that we have locked in a constant price so that when hay is high we help them out and when hay is low, they help us out. It has worked out well for both parties, if you can find someone that raises hay year in and year out.

One thing, too, the high prices of the past 4 years aren't being realized right now, so you could be getting in at the right time. I guess time will tell on that.

I think your passion for ranching is a good thing, 'H. You are no rookie to raising cattle. 32 head would be a nice increase and I hope the best for you. I'd sure try it if I were you. If you don't, you will always look back and wish you had. Opportunities don't always come along. Good luck!
 
Faster horses said:
The talk around here is that most years you can buy hay for less than the cost of owning the machinery to raise it. We have
only raised our own hay (most years) so I can't attest to which way is best. But with a full-time job, I would think buying it would
work well for you, year in and year out. We have had customers that we have locked in a constant price so that when hay is high we help them out and when hay is low, they help us out. It has worked out well for both parties, if you can find someone that raises hay year in and year out.

One thing, too, the high prices of the past 4 years aren't being realized right now, so you could be getting in at the right time. I guess time will tell on that.

I think your passion for ranching is a good thing, 'H. You are no rookie to raising cattle. 32 head would be a nice increase and I hope the best for you. I'd sure try it if I were you. If you don't, you will always look back and wish you had. Opportunities don't always come along. Good luck!
Click to expand...

I generally agree on the hay part. Especially when you factor in the replacement of what is taken off with the fertilizer you put back on (Assuming you aren't putting it back on through your cows in the winter).

That being said, I now own haying equipment. I am growing and have yet to find a piece of rented ground that fits my level of cows. I can use the equipment to mange forage when it is in excess. I was patient and bought equipment priced well to.
 
H,
My team and I are doing a one day workshop in Tooele, UT on January 12th at the Extension office. I will be teaching how to use a tool on my website that helps you determine how much you can afford to pay for a cow. If you come to the class I would also be happy to provide you with a template for a ranch business plan that we have developed and worked with several producers to answer similar questions to yours. The Tooele class is from 10:00 am - 3:00 pm and is free of charge. My website that contains the tools is uwyoextension.org/ranchtools if your not able to attend the workshop I would be happy to talk with you. You can find my contact information on that same website.
 
I bought a Cat skidloader they financed it mine is on a monthly payment a buddy has his on a yearly payment. Mine was used 1700 hours for $16000 payments are $387 a month. That would do all you need if your buying hay other wise lots of used fwa tractors for $25,000 that are plenty good enough.I know this is a swear word but a Russian tractor 100 horse with a loader and cab can be bought for under $13,000 I've fed cows with them for the last 17 years they don't care about paint color.
 
I agree with Faster horses. If you don't do it, you'll likely regret it. It's just simple math and how creative you can be to make it work. Don't overthink it. You would know your area better than anyone.

An unbiased assessment of the cows, and the last calves they weaned, and the Forest Service permit would be the sticklers, imo.
 
Go for it, leanin' H. You won't regret trying it, but if you don't do it you will always think back and wish you had. My advice would be to purchase hay and not have the hassle of putting it up. Get into big round bales. They are so much more "user-friendly" than fighting with small squares. Your back will thank you years down the road if you get away from the "idiot cubes." You undoubtedly already have a ranch pickup. Go one step farther and trade it for one with a bale bed. Ranching goes from being hard work and drudgery to actually being fun.

Until I was about forty years old, we put up all our hay in stacks and used pitch forks to feed it in the winter-time (which is still less work than small square bales). We handled all the cake (protein cubes) with either a scoop shovel or five gallon buckets. Finally I went to big round bales instead of the loose hay stacks and got an overhead bin to store cake. Ranching instantly became a lot less work, and consequently much more fun.

Best of luck in your new endeavor.
 
Use your own gut.
Now I'm not telling you what to do but if it was me I'd jump on it. This is an opportunity where it gives you a nice increase but not so large of a deal that you bury yourself up to your earlobes
If you do this it would be a great stepping stone so if you get the opportunity on a 100 head deal you could swing it. I think this is a once in a lifetime opportunity But it's your decision
 
master stockman said:
H,
My team and I are doing a one day workshop in Tooele, UT on January 12th at the Extension office. I will be teaching how to use a tool on my website that helps you determine how much you can afford to pay for a cow. If you come to the class I would also be happy to provide you with a template for a ranch business plan that we have developed and worked with several producers to answer similar questions to yours. The Tooele class is from 10:00 am - 3:00 pm and is free of charge. My website that contains the tools is uwyoextension.org/ranchtools if your not able to attend the workshop I would be happy to talk with you. You can find my contact information on that same website.
Click to expand...

I will try my best to be there. I have attended a few of those classes at the extension office in Tooele and I always enjoy them. Is your Dad a professor too? See ya Tuesday :D
 
I truly appreciate all of ya'lls words of advice and encouragement. Everything I have been able to gather to this point about this deal makes me want to jump at it. I have visited with folks on financing, the other permittees on the allotment and have a good grasp of the quality of the cattle and the herd history (benefits of life in a tiny town). I plan to meet with the seller very soon and talk final numbers. Will let ya'll know how it goes.

It is hard to keep my hopes dampered as this is a dream. Could really appreciate your prayers in our behalf.
 
This is a second attempt at posting on this thread: Mostly intended to offer prayers and best wishes for a great outcome for the deal more than real advice for it.....obviously those went the right direction, as it appears you have pretty well arrived at a decision to go for it.

Also thought of the world situation and that of our nation. Tough times seem to favor ranchers a bit as we can usually tighten up costs pretty fast when it is really necessary, and when the world is in turmoil, people still need food, maybe even more than usual. And obviously, your 'home grown' crew is top notch and growing into the job pretty fast.

Enjoy the ride!

mrj
 
I had a day job, I borrowed money, bought cows, leased ground, and fed bought hay. Some years I wondered how I ever got in so deep, and couldn't see daylight. One of the best days, was spent in prayer, and the realization that if God wanted me to have it, the banker and government could not prevent Him from giving it to me, and if He did not want me to have it, I did not really want it either. I have learned to enjoy what He has blessed me with today. If its gone tomorrow, I shall have enjoyed today. Thirty + years later it appears God shall indeed give it to me, a pay off is in sight. That may be gone tomorrow, but I had today and had fun, too. Just remember its lots easier to get in the gumbo than it is to get out! Don't quit the day job till you operate on your own dollar. Tickled to death for ya!
 
The direction Choice Cutout is taking, I'd say sooner is better than later if you can do it.
 
When opportunity knocks it is up to us to recognize it and act on it. Well it is knocking for you H, you never know if and when it comes around so get on with it. You are a rancher, you might just as well have a few more cows.
 
First thing you need to do is answer your phone when your northern financial advisor calls.

I'm with several on this one H, when opportunity knocks, open the door. Thinking your time for repayment may be a little long but I haven't always been right. Curious as to the values and thinking this little slump is time to "cow up". Debbie is still a little shell shocked at what has happened around here in the last 7 years. I am too for that matter. So far it's working.........
 
We expanded in 2006. At the time I had no sleep it was going to be a struggle but thought we could make it. 10 years later we are looking at expanding again. Best of luck to you I hope it works for you.
 
Go for it H!!! We just got into a lease a little over a year ago and have expanded our cow herd. November 2014 we owned 40 hd of cows, we now are running about 250 hd of cows both leased and owned. Be smart about your planning and go for it, I think you will regret it terribly if you do not. If I can help you with brainstorming ideas let me know.
 

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