Review of Cattle Business

Well 2017 concludes my first year in the cattle business.  And I must say, I made some big mistakes.

1. I paid too much for most of my cattle.  I was paying premium price on moderate quality animals, and I was paying bred heifer pricing on animals that turned out to be open.  Takeaway:  a cheap cow produces a calf just the same as an expensive one, and she ain’t pregnant unless she’s been tested.

2. I weaned the calves off their mommas too quick.  My grass does not support a growing calf (low protein) – he needs momma’s milk to grow.

3. Do not practice intensive rotational grazing in the spring with heifers.  Allow them free range so they can get the best.  I thought I could improve the pasture by tightly rotating, but I could never stay ahead of the Bahia going to seed.  I’m going to have to cut in August anyway, so just let them free range until then.

4. I tried to sow ryegrass directly onto a thick thatch of Bahia.  I think it needs to be disked up first so the seed makes contact with the earth.  It would be best to burn the moribund grass, but I’m just going to have to disk it.

5. Check on government grants for improvements. After I installed all my cross fencing and watering system, I had the NRCS folks look at the place to see if I could get some aid to do some earthworks. Turns out that they had grant money for fencing and watering systems. Could have saved thousands!  

I’m sure there are some things I did right, but they pale in comparison to the above mistakes, and they won’t pay back for years to come (infrastructure improvements).

So in summary, I purchased 38 cows & heifers (one of which died), sold 5, 1 was born (and subsequently died) for a finish quantity of 32 cows and 1 bull that I’m borrowing.  [Also worth noting that on Jan 10th 2018 I sold another 5 cows so as of this posting, I’m down to 27+1.]

So on average I had about 25,000 lb of beef (25 animal units) on the ranch.

My variable costs (feed, medicine, etc) was $2,606 or $104/cow

My overhead costs (maintenance, supplies, etc) was $4,014 or $160/cow

For a total operating cost of $6,620.  I’m sure my overhead costs will go down as I spent a lot of money on maintenance of the tractors and fences.

The cattle cost $27,760 and the infrastructure and equipment is valued at $23,134.  If I look at my annual depreciation I’m figuring 10,179 per year.

So from a cost per 1000lbs of beef w/o depreciation is $264.80, and with depreciation is $671.96 per year.  If you added my labor at $20/hr. that would round it up to about $800/cow/year.   NOT SUSTAINABLE!

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