Herd Size

[ProFarmer]

Unless you have 100 cows and a good off farm job there is no way you can make it the beef business. 100 or less cows is just a hobby farm now a days. Just do the math.......

[per]

That is true in the conventional cow business. Maybe think farther outside the box or maybe in the box. How many boxes of beef can you get out of a beeve? There are opportunities out there to value add. There are cultures that eat things we might not. What about the hide and no implant markets. Small niche cottage outfits can be highly profitable. There is a grassfinshed market out there for those that are into Omega 3s etc. It doesn't have to be a hobbie even if you are small.

[Bez]

Tend to agree with ProFarmer despite the fact we are somewhat smaller - and managed to actually make money on that portion of our business.

As for needing 400 more or less - I suppose that makes a great number of folks either idiots or dreamers.

Then again we have ignored advice from the cattle orgs, their representatives and their status quo thought processes - and created our own opportunities - which have paid off handsomely.

Bez

[farmers_son]

How I got $20 cost per bull? I assumed buying a bull for $3000, using him for 4 years and then selling for $600. That worked out to be $600 cost per year and the bull would breed 30 cows. Some will buy more expensive bulls, some bulls are more affordable, some last longer and people will breed more cows and so on. The operation was providing all the feed for the bull. I guess if there was bull death loss that number would be included in the inefficiency line item. The numbers were intended to general and just indications of what needed to be considered.

Certainly if the land was leased it would reduce debt but the lease payments have to be included as an expense. Re the number being low…I what is important is knowing what the number is for you. I recently read a piece about Harlan Hughes being at a large meeting of cattle producers. Harlan posed the question who in the crowd knew their break even herd size and only one producer put up his hand out of a group of 450.

Certainly there are opportunities to value add. But you still need to know your break even although it should take fewer cows to make a go of it if you truly are value adding and not just doing more work for no pay.

Without question the break even herd size will vary by producer. But we need to have that kind of information and although the numbers will vary from farm to farm the concept is exactly the same for everyone. Per head revenues minus variable costs equals contribution per animal. Fixed expenses (with surface lease revenue some farms actually have fixed revenues that could be subtracted from the fixed expenses) divided by contribution per animal equals the size of operation you need to break even. It works for everyone, feedlots as well as cow calf operations. Only the feedlot guys tend to know that kind of thing already but the cow calf guys need to know it too.

No one can operate long term if they are not cash flowing their operation. It is critical you know your breakeven cash flows. And if the numbers come out such that you need to do something it is far better for you to find that out and be doing something about it than have the banker tell you.

[jensend]

don't your bulls eat sometime during the year or do you have free feed?

[per]

I think what farmers_son was doing here was trying to get us to think about our numbers and where they come from. I imagine he is preaching to the choir here on Agriville but it is always a good process non the less. That is why some of us are asking for testing and such because we are trying to stretch was is considered possible. Not withstanding the possible food safety aspect that we should not ignor.

[PureCountry]

Back to the comment by ProFarmer about anything under 100hd is a hobby, some of the most profitable people I know have 50 or LESS. They market the beef at premium prices, and do very, very well. The only way I'd agree with your comment is if you're talking strictly about a farm that sells calves right off the cow - in other words, giving all their profit potential away.