# Which cattle raising model is more profitable?



## unregistered168043

Trying to crunch the numbers on making a few dollars with cattle. Which way would be more profitable?

A. Buy weaned cattle through the sale barn in spring, run them on my pasture all spring and summer then sell them in november.

OR

B. Get a few good breeding beef cows, rent a bull or do AI. Run calves through the sale barn when big enough.

The downside for buying weaned calves is that you are paying for them($$), the downside of keeping beefers is keeping them through winter and the cost of feed and hassle.


What say you?


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## MDKatie

I'd say option A would be best. Little investment, quick turn around.


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## unregistered168043

The downside of option A might be that i end up with alot of culled dairy stock, maybe I wont get the best price. 

With option B I can control for higher quality.


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## Gabriel

Option C: contract graze. No cost out of pocket for animals, decent monthly cash flow, contract is (should be!) written so that in case of drought (or winter) you send the animals back with 30 days notice.


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## G. Seddon

Option B requires a whole lot more management: AI process can be involved; there are risks with renting a bull for live cover; calving requires time, work and potentially more veterinary input; and more in the way of facilities might be required. 

Basically, managing steers for 6 months is a whole lot less work than managing a group of breeding cows.


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## wally

Alot depends on a number of things, amount of pasture?,Hay? handlng facilities, your time ect ect..
My farm is set up with pasture and barns. I enjoy spending time with the cows in the barn when the weather is nasty outside, so I buy calves and bottle calves in the fall, when price is lower as others are sellng off pasture cows. Feed over the winter and sell in the spring when price is high and others are looking to turn cows out to pasture. Idont know much about a cow/calf operation.. some one who does would be a better choice for information. Good luck.


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## Jena

There is no magic answer when it comes to cattle. It depends too much on your operation, your resources and the market in your area. Flexibility was always a good thing to me. I also liked to keep the sale barn animals coming through my place to a minimum, especially calves right off the cows. I didn't like dealing with scours, pnuemonia, etc etc etc.


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## bruce2288

considerations;
Option A There have been times in the past when you will not get back whaat you paid to buy the calves.

Option B Some years you can buy calves cheaper than you can raise them.

Cattle prices change, cost of feed changes. One is not better every year.


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## Allen W

From post #3 it sounds like no matter what you decide to do you need to find a reputable buyer or some one who knows cattle well to help you in your buying decisions. 

I'll add option d be flexible.


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## Miss Kay

The smaller the calf, the higher the price per pound. Calves are more expensive in the spring and cheaper in the fall. By fall, the price per pound will have gone down so you really have to put on a lot of weight to recoup your costs. Farming is a gambel either way though.


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## bigbluegrass

There are plenty of people who make livings off both options - that is a fact!

Whether you make money or lose money will depend on what you are good at, what you know or are willing to learn or how good of a teacher you can find.

For option A to work you need to be really good at picking out good healthy calves who will put on a ton of weight on what you have to feed them. You will need to get 2# a day gains out of them to turn a profit and the profits are small ($100 a head would be average), so you can't have any die or you won't make anything.

Option B is safer, IMO, but I was raised in a cow calf operation - so the learning curve is not so bad. You need good cows to make money. You need a good bull or AI ability. Profits aren't high (about the same $100 per head is average but some folks can do much better). If you get into the rotation grazing thread, agmantoo will show you how to get much better than $100 profit per head. If you have calves die, you won't make any money. 

Either way you need money to make money! Either way you have to be good with your money.


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## hiddensprings

We do a combination. I raise bottle calves that I get from a neighbor dairy farmer. I raise the calves on my goat's milk. I've been lucky to get good healthy calves from him at a good price because it saves him from having to drive them to the Dairy auction in Kentucky. Then we have a few cows that we AI and sell the weaned beef calves. I took a class to learn to do the AI myself so I don't have to have someone else do it. I do the bottle calves because I enjoy them and it gives me a way to use the extra goat's milk I have. Hubby thinks I'm nuts because they are time consuming, but I say "if you enjoy it, then do it"


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## haypoint

Jena said:


> There is no magic answer when it comes to cattle. It depends too much on your operation, your resources and the market in your area. Flexibility was always a good thing to me. I also liked to keep the sale barn animals coming through my place to a minimum, especially calves right off the cows. I didn't like dealing with scours, pnuemonia, etc etc etc.


Just like every profitable business, you have to figure out what advantages you have over the other people doing that same thing. I'm a long way from any big market and north of the corn belt. A feed lot makes no sense for me. But land is cheap and grass grows well all summer long. So, a pasture operation fits. I can rent pasture or raise cattle. 
The guys that are buying calves at Auction and raising until fall are experienced. They know which ones to buy and which ones to let you buy. Then when they get them home, they know how to keep them from dying, better than most.

Perhaps you are a good salesman. You might grow a business selling beef that you sent through the local butcher shop.

If it were as simple as picking plan A or plan B, whatever one made more money would quickly be over run with people wanting to cash in and no one would make a penny. That's how it is in the farming business.


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## ycanchu2

Depends on how much work you want to do. Cow /calf will be the least amount of work. Regardless of what you do, you must learn to utilize your grass to its full potential thru IRG. Buying 7 & 8 dollar corn is not profitable IMO.
Only low input producers will survive the future.


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## ramiller5675

It takes good, high quality grass to raise stockers, and cows can make a living on poorer pasture. How good is your pasture? Is it high enough quality to quickly put weight on a calf?

I have a cow/calf operation, and if I have enough grazing (especially some good winter wheat pasture), I'll save some calves and graze them through the stocker phase.

I've made money with the stockers when the price holds or goes up, and I've broken even or lost money when the price drops. It's painful when you sell a 800 lb stocker in the spring for the same price per head as you could have sold him when he was 550 lb. the previous fall. But sometimes you can put that weight on for cheap and make some decent money. 

Running stockers is a high risk, high reward sort of business. You might make a killing, and then turn around and have your head handed to you.


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## Gabriel

I've never run stockers, so all I know is what I've read. (In other words, take this with a grain of salt.) I recommend Allan Nation's book _Pasture Profits with Stocker Cattle_, where he details Gordon Hazard's operation. Gordon watches the cattle cycle and when the cycle is at the top or headed down, he books the sale forward, locking in the price. So there's a way to make money with it, regardless of which way the market is going. 

Besides finding a local mentor, I also recommend _Knowledge Rich Ranching_, it will give you an overview of all the cattle operation options.


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## MDKatie

Darntootin said:


> The downside of option A might be that i end up with alot of culled dairy stock, maybe I wont get the best price.


Most people look at the cattle before they buy them. :happy2:


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## agmantoo

Darntootin

You have not provided enough information to support your choices.


How much profit do you intend to generate from this enterprise?

Some initial things need to be considered.

Where or how or to whom do you intend to market the animals?

Do you have the available pasture now and in the future to feed these animals or will you feed hay? If you will feed hay where will it come from and at what price? 

Will the existing fence contain the animals you will be buying?

Is there a dependable water supply?

What will you do if you have to treat an animal? any head gate?

Will you be feeding any supplemental feed such as grain? Do you have a source? Can the feed be purchased at a price that will leave you a profit?

What do you possess that will give you a competitive advantage over other producers? Can you be a low cost producer or will you be a "me too producer"?

Do you have the time and resources to attend to the needs that surface? You never want to stress and animal or plant that you are attempting to grow.

Matching your facilities and your pasture production with the animals you expect to have should give you an idea as to where you will stand in the cattle market. If you find that you will be a producer just like everyone else, a "me too type" I suggest staying out of the business at this time.


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## Allen W

Know your seasonal highs and lows on the various classes of livestock in you area will go a long ways toward making a profit.


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## mplatt4

foremost feedlot buyers look for calves of the same color and size and like to buy them in groups of 10 to 40 or more you will rarely get top dollar for a mixed group and selling them one at a time is usually not good either because that way your selling mostly to farmers who are trying to buy cheap you might do good on one or 2 out of the group. I suggest you try to buy black calves or black white face calves you might pay a little more but they will almost always bring more when you sell them the angus people do a great job making most believe there beef taste better but I challenge anyone to raise 1 each of the main beef breeds and feed them exactly the same and be able to tell the difference. I have had many different breeds over the years and 99% of the taste comes from what they are fed not what color they are. But the feeders do want to buy calves of the same color so when buyers come to the lot they see pens of same sized and same color calves. If you go the cow calf route try hard to have your calves ready to wean either when the grass is ready to graze in your area or when the corn has been just harvested as usually these are the times when buyers are the most agressave


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## unregistered168043

agmantoo said:


> Darntootin
> 
> You have not provided enough information to support your choices.
> 
> 
> How much profit do you intend to generate from this enterprise?
> 
> Some initial things need to be considered.
> 
> Where or how or to whom do you intend to market the animals?
> 
> Do you have the available pasture now and in the future to feed these animals or will you feed hay? If you will feed hay where will it come from and at what price?
> 
> Will the existing fence contain the animals you will be buying?
> 
> Is there a dependable water supply?
> 
> What will you do if you have to treat an animal? any head gate?
> 
> Will you be feeding any supplemental feed such as grain? Do you have a source? Can the feed be purchased at a price that will leave you a profit?
> 
> What do you possess that will give you a competitive advantage over other producers? Can you be a low cost producer or will you be a "me too producer"?
> 
> Do you have the time and resources to attend to the needs that surface? You never want to stress and animal or plant that you are attempting to grow.
> 
> Matching your facilities and your pasture production with the animals you expect to have should give you an idea as to where you will stand in the cattle market. If you find that you will be a producer just like everyone else, a "me too type" I suggest staying out of the business at this time.



I dont know that I have too many advantages over anybody. I have my homestead, a good 15-20 pasture acres with 'fair' grass. Right now i have a small herd of sheep. I went to a cattle auction with my neighbor who sold his bull for $820 bucks. He bought it last year for about $350. Kept him on pasture ( about the same as mine ) and fed hay in winter ( cut from his pasture by him ). He figured he made over $400 on him.

I don't see why I couldn't do the same with a few cows every year, make a couple of thousand dollars. Maybe if it works out I could go a little bigger. I was thinking about the possibility of breeding my own and wondering if it might be more profitable to 'cut out' the initial charge of buying a weaned calf. I mean, I have the pasture and I have the hay to support some animals. I could even grow a small supply of feed grain, maybe make some silage.. IDK


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## ycanchu2

Jump in and get your feet wet...you will learn by doing.


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## HDRider

I am not saying this is right for anyone else, but my plan is:

Start with stockers to learn. Keep back the heifers that I think will be good mamma cows.

Then develop a cow/calf operation, putting a sizable investment in my bulls, probably registered stock from someone like Pharo.

After that I want to become a replacement cow supplier and introduce some registered cows to see if I gain a marketing advantage.

At some point I should be able to manage all three cattle strategies.

In all this, I think profitability is a factor of how well you manage costs down and minimize inputs. Additionally maximizing outputs is obviously important, things like strict culling and the right breed choice for my markets.


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## agmantoo

*I went to a cattle auction with my neighbor who sold his bull for $820 bucks. He bought it last year for about $350. Kept him on pasture ( about the same as mine ) and fed hay in winter ( cut from his pasture by him ). He figured he made over $400 on him.*

Many producers fail to recognize the true costs of production and only view the gross income.
Here IMO is a list of expenses that could have been incurred in the production of the purchased animal that was sold.

There was a sale fee at time of purchase, then there was transportation to get the animal home.
Once home did the animal need and medications, ear tags or parasite meds
The animal went on pasture....was the land paid for and where was the interest charges along with property taxes?
He baled his hay. Was this fertilized hay and where is the fertilizer costs. The expense for the tractor, mower, rake, baler, twine, maintenance supplies and parts are where? What about fuel?
Any storage or housing for equipment and hay needs to be recognized.
Is he going to pay IRS on the profit?
How was the animal returned to the sale barn? Who owned the truck? Where is that costs? Was the sale fee recognized/
Did he carry liability insurance in case the animal got out and caused damage?
Did he have any death or Vet loss to be distributed to this animal?
This is not an all inclusive list. The intent is just to demonstrate some of the costs that go unrecognized. Cattle prices have been very good but that does not assure they will remain that good. From what I have read the average producer is still making less the $100 per animal. I am not trying to dissuade you from entering into cattle business. What I am wanting you to recognize is that you need to find a niche in your production strategy that will give you a competitive advantage that should enable you to be profitable in a down market as well as in the current up market.


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## BlueHillsFarm

Contract grazing on rented pasture is what looks the most profitable for me. I am young. You might have more start up capital and resources than me though.


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## Kato2010

We have done both. To the tune of about 400 stockers a year, half in winter and half in summer. This spring we did not buy calves, and couldn't be happier. In our part of the world, there are people who bought expensive feeders last spring, and contracted them for sale this fall. They thought they were protected. They were not. Due to drought and feed costs, the buyers are not honouring the contracts. They will pay them $40.00 penalty,and then turn around and buy the steers for $300.00 less in the ring. Not hard to see who's absorbing the loss on this round is it?

We're not planning on buying steers this fall either. We'll buy some heifer calves, and pick through them in the spring to find some replacements, but that's about it. We feel we have more control over the cow calf side. We have a much larger window of opportunity to market the calves, and a much much smaller vet bill. 

Things are very volatile right now. More than normal. My first recommendation for whatever you decide to do is to try and do it without borrowing money. There will be people this fall who will be lucky to pay back their stocker loans, let alone make a profit. And you do not want to be in a position where you have an unpaid loan or feed bill at the end. Do lots of research. Talk to lots of neighbours. Sit at the sale barn for a few days and see what the mood is out there.


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