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Esteemed Advisor

Shaggy- plan to get back into Cattle?

Shag...did I see somewhere that you were planning to get back into the cattle business?

 

If so, it might be a pretty poor TIME to do so. Maybe 18 months of good times, but getting in at the top of the cycle is pretty hard to navigate successfully. Obviously, it can be done, but the winds will blow against you somewhat.

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9 Replies
Veteran Contributor

Re: Shaggy- plan to get back into Cattle?

I agree with that Ken , but am curious to your view on Time for these crops. One more bounce before we settle lower, or is 6$ corn gonna be a chance next yr?
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Senior Contributor

Re: Shaggy- plan to get back into Cattle?

I've cut way back on cows. But was wanting to buy stockers this winter. With these prices I'm afraid ill get stuck with calves that I keep a few months and sell for less than I pay for them. It happened to my dad back in the eighties. He even rented pasture and fertilized it. I think he accually sold the calves for $30 per head less than he paid. It was the last time he bought stockers. Cows being a long term investment may not scare me as much. They don't fit my operation right now. It sounds like Shagg has a sound plan. I think he will be ok even if he gets in at the peek.
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Senior Advisor

Re: Shaggy- plan to get back into Cattle?

Yes, I'm planning on entering on a small scale, a very small scale. Maybe less than 10 my first year, but they will be paid for before they exit the trailer. Planning on starting a small herd and growing it debt free along the way. Rome wasn't built in a day my friend. Need to do some checking, but this might also reduce my tax obligation for 2013.
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Senior Contributor

Re: Shaggy- plan to get back into Cattle?

Let us know what you find out on the tax question related to buying cows. Seems I've heard discussion about it before but can't remember.
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Senior Contributor

Re: Shaggy- plan to get back into Cattle?

Excellent topic, We have had duscussions on the subject in Cattle Talk this summer.

"where are we" I think is THE question. Cow calf #s at 50+ yr lows. Part of teh equation, we produce far more beef per fed vs 10 let alone 30 yrs ago. Are we rebuliding the herd  now or not yet,  will the rebuild  be similar to other cycles or slower.

 

Ibjective for the non-permanent cow/calf man is, having a full herd to sell when the industry is most bullish. I don't think we are anywhhere close to that.

 

It gets hard because as cow   feeder prices rise, to levels never imagined, too easy to say here, take mine but that is the slider phase, where FEDS are takeon iff feed early to capture the high Px, onloy to see higher and higher,. Cows at 80 no 110 no 120, hard noy to sell. KEEP em. I bet feeder fututres hit 2-2.25. before this is over.

Yes signs beed demand is falling off some but mosty we are used to consuming is it a daily slaughter of ~150.

 

Idea here, now, buy a mix of yearling heifers (preferrably bread) and some from last spring's calf crop. Breed the yearlings, the yiounger ones next summer. Gradually you are in teh cow/calf business. Sell the steers, keep 50% of the heifers.

Try to  stay bought ahead on hay for winter suppliment  vs getting caught.

 

And in 2016, sell some cows, more in fall 2017. Let all the young you have at that point go summer 2017.

 

Others, ideas?  Maybe pull those dates back a year.

 

Supply/demand is all, cattle have  some fixed elements and we should be able to pull this off vs will 2014 be a gerat or terrible yr for      beans.

Rgds

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Senior Contributor

Re: Shaggy- plan to get back into Cattle?

I just don't see how you can consider 2.00 feeder cattle that high. With the amount of grass being broke grass going to crp repair costs taxes equip costs and ptobably highrr taxes in the not to distant future feed costs threw the roof seems cheap to me. Looks more like breakeven
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Senior Contributor

Re: Shaggy- plan to get back into Cattle?

Having said that make sure you buy the best that walk. If a weaned calf coming of cow weighs just 50 lbs more that's a lotta cash at 2.00 lb. Makes that 100 or 200 more per cow cheap.
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Senior Advisor

Re: Shaggy- plan to get back into Cattle?

I appreciate all the comments. This is nothing new for me, we have been involved with the cattle business for many years, going back several generations. I've got everything I need except the cattle themselves, this includes all equipment, feeding facilities and nearly 1000 acres of grass with new fence. I'll be producing all feedstock myself, I'm also involved with alfalfa production, so I've got high quality feed available as well.
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Veteran Advisor

Re: Shaggy- plan to get back into Cattle?

Time, if I can pick your brain a bit, where do you get the 18 months?  With cattle numbers as low as they are, I think it will take few years to get production to increase by any significance.  Maybe demand craters with the economy?  I would be interested in your reasoning for saying 18 months.FWIW, I.ve been retaining heifers for several years, replacing older cows first, and am ready to either  increase cow numbers or sell breeding stock. 

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