boone: The whole issue of "tax" cattle is something that really needs to be addressed. For many small/midsized lots it is their bread and butter and they wouldn't exist without them. An example a local 5000 head feedlot custom feeds 4500 head and only has 500 head of their own cattle. The owners of the 4500 head are basically split about evenly between local grainfarmers and "professional corporations"...read that as doctors, lawyers, accountants and a couple of judges! Now these "professional corporations" really don't care one iota if they have a profit or a loss as the whole idea is for a tax writeoff?
But this setup has made it possible for this lot to do quite well. Buys local grain and other supplies and provides a few jobs. Also buys quite a few local cattle at good prices? We all know how the calf market goes up when the tax money comes to town in late November early December? So it puts a few more bucks in the cow/calf guys pocket?
The large commercial feedlot must compete against these tax cattle and that must be frustrating? How do you compete against someone who couldn't care or less if he is making any money?
But this setup has made it possible for this lot to do quite well. Buys local grain and other supplies and provides a few jobs. Also buys quite a few local cattle at good prices? We all know how the calf market goes up when the tax money comes to town in late November early December? So it puts a few more bucks in the cow/calf guys pocket?
The large commercial feedlot must compete against these tax cattle and that must be frustrating? How do you compete against someone who couldn't care or less if he is making any money?
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