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Time to Buy?

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mytfarms

mytfarms

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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.
 
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!
 
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.
 
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.
 
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.
 
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.
 
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
 
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.
 
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.
 
AC Diesel said:
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.
Click to expand...


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
 
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.
 
We have always made more money on second string cattle and junk than better cattle. The trick is to buy them right and feed them well. Flesh and fat cover a lot of defects.
At any time and at any given sale, there are bargain cattle.
 
mytfarms said:
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.
Click to expand...

There are cows I love... They breed in the first 25 days of the season, have great udders, birth unassisted and start getting junior up almost before he is out all the way, clean him immediately and have him nursing right away and bring him back that fall at about 600 pounds on decent forage... Those are the only cows i love and they Love me back with profit.
 
I like the idea of cash for everything. To this point in our lives, either through shrewd dealings or grace from generous folks, we have not accrued any debt outside of a dab of educational debt that should easily be paid off next year. That's a whole lot better position to be in than some young people we are acquainted with.

I reckon we will keep cleaning up the financial bottom line and oust the cows that aren't paying their way. Although I have a really nice set of Angus registered cows and bulls, I may open up some "trash trading" on the side to boost the cash flow. Always some sort of unfair advantage a guy could use to help his margin it seems like.

Which brings me to another point. When you have no land and about that much capital, how do you get the ball rolling in the first place? Keep kicking tires and see what opens up to work with you?
 
I don't think debt is all bad. If it is working capital and not taken on for toys like boats, ATV's ect that don't work for you. Not saying a good ATV can't be a tool.Sometimes debt provides opportunities.
 
I will rent tools to make money.
I seldom rent toys.
Money is a tool.
Money rent is currently pretty cheap.
I don't like to rent so much that I have trouble paying it back.
 
MYT, don't let the fear of debt stifle a dream. Make sure it is a sound dream with a plan and get on with it. I wish I were less conservative in my younger years and a bit more aggressive. Things really started to roll for me when I got on with it and used debt as a tool to get the plan on track. While I am at it, don't wait to have kids until you can afford them. Have them while you are young enough to care for them. We never think we are ready for them and we really aren't so just go ahead and make that happen too. It will also make your Mom happy too. Cheers.
 

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