cow/calf prices?

[ASRG]

A neighbor told me some very good younger cows with two week old calves sold yesterday at Innisfail for $2150!
Now that seems a pretty dear price to me.
What do others think?

[Horse]

I sure wopuld like to see the math behind such a decision, unless you have a grazing lease and need some cows to keep the oil revenue rolling in.
Three weeks ago a neibour bought 15 cows at westlock average 1600$ so far he has lost 2calves and 1 cow but back to work for 3 weeks and he has another 30 thousand so it dont hurt him but I rthink he didnt plan on such losses but sh## hapens and by the way I think they were very poor cows.

[15444]

Not out of line at $2150. That's last years prices for breds in Iowa. This country eventually catches up to the real world.

From what I have read, breds are to be contracted from $2300 to $2500 for fall delivery in parts of the US. So maybe fall 2013 will be ok here.

[ALLFARMER]

IF you sell the calf in the fall for $1000 you still
have $1100 in the cow.....buyer must have grass
to give away.

[ASRG]

Horse: In my local paper there is a grazing lease up for auction near Caroline Alberta?
It is: Grazing lease No. 16890
S 1/2 36 36 6 W5m
Renewal date-Aug 31/14
96 AUM
Lease fees- $222.72
2011 taxes- $44.91
-spring fed creek across property. 105 improved meadows, rest in natural meadows and aspen, spruce, tamarack and pine trees.
-perimeter fenced with four strand barbed wire.
-no mention of oil & gas lease revenue.

[ASRG]

Allfarmer: Just wondering what you see as a good price for bred heifers this fall? I saw some fairly good heifer calves sell two weeks ago for close to $1200....the buyer sells bred heifers in the fall.

If he puts 7 months of feed in them (pasture) at $20/month = $140? Bull costs $35? Vet costs $15? salt/min $10? Selling costs/trucking $30? Something for interest? Maybe some death loss? Let's say $1450 in them by sale day?

A good rule of thumb is 15% profit (or why bother?) for a year...so 8% or $116? They should bring $1566?

If 1544 is correct that is going to be a cheap price.

[grassfarmer]

More cowboy arithmetic.
Allfarmer you say $1000 calves in the fall but in the
example they were two weeks calved. You must be
expecting a huge increase in calf prices this fall
compared to last year to make a late April born calf
worth $1000.
ASRG, show me where anyone in CDN agriculture is
making a 15% profit assuming you are basing this on
total assets including property values. I'd love to learn
from them.

[ASRG]

grassfarmer: You are correct on the agriculture profit picture. I was using general contractor "profit principals" with the 15%.

[ALLFARMER]

Went innisfail auction market for u boys market
report on the net. 900 lb heifers 0.90 to 1.30 so
that averages 1.1 lb that's a $990 animal these
2100$ pair buyers still need to grass that calf all
summer to maybe get 1000$ so their paying
1100 to 1200 for a 990$ animal

[ALLFARMER]

Also says on the innisfail site 1000 to 1600 for
bred cows 1900 to 2200 for pairs.
So a 1600$ bred cow 2200 as a pair so $600 to
calve out 1 cow wow I'd watch a calf being born
for $600

[ALLFARMER]

Kind of nice to know the 950$ open heifers I
bought last spring are worth nearly 2200$ making
only 1250$ shit that's how to go broke!

[comtex]

Never look a gift horse in the mouth... might be wise to take profits while you can!

[grassfarmer]

Sheer fantasy Allfarmer - so now you kept your
heifers at zero cost for a year so you can boast of a
$1250 profit (unrealized because you didn't sell
yours) based on someone else's cattle selling at the
other end of the Province. Keep on dreaming.
I'm reminded of the phrase "none are so blind as
those who will not see"

[smcgrath76]

This is interesting as I had the same
discussion on the phone today...
Equity vs. Cash flow.
AF - you are correct. If you were to do
a balance sheet today you may have made
$1250, and your land may have made you a
millionaire. It is also possible to be
in that position and not have enough
nickels to pay for groceries.
We came back to the farm in '02, and
realized the need for serious business
training. That investment combined with
3/8" of rain in 02 and BSE in 03
certainly honed our system and skill
set. The one thing that stuck with me
from business training (formal) is that
CASH IS KING (OR QUEEN OR BOTH).
Our experience in driving our costs down
and value up and increasing cash flow
and available cash has been very
positive in that we have been able to
take advantage of opportunities that
have come along. Do we generate enough
free cash to take advantage of every
opportunity? Thankfully no, but it has
certainly improved our quality of life
and in the end has improved our balance
sheet quicker than when we were strictly
equity rich.
A good question to ask yourself about
anything you do is "Why?" If you can
honestly answer that question with good
logic 7 times in a row, then keep
firing, if not it might be time to step
back and take a deeper look.
GF - I think some farmers do generate a
15% return when you consider growth in
equity (land) along with small cash
(production) profits. I see a real
accounting challenge here in that for a
farm (or other business) personal
expenses such as electricity may be
deemed a business expense and yet, if
you had a "regular job" you would have
to pay those same expenses out of your
pocket. So the farmer may have a lower
income, but still have a telephone, etc.

The science of economics is often the
science of justifying what you were
going to do anyway...

[Horse]

ASRG I also have a rented truck would you likr to buy it you wont own it but you can still buy.
Grazing lease $227 per yr means at $2.39 per AUM equals 95 cows for 1 mo or 19 cows for 5 mo. How much is that worth?
App $27 per AUM as that is what it costs in the real world more than gov grazing fees so 27 times 95 = 2565, now how much of that should a person pay for something that was given in the first place by the tax payers ?