feedlots?

[Horse]

EM how much are they limited to . One of my consultant buddys in the $300,000 range seems to have an unlimited suply of money to lose now I dont know the whole poop on this hiding money thing but I understand you only have to have a reasonable expectation of profit Then there are the t****rs that have 100s of thousands invested in cabins on thier trap lines they dont even trap but whereelse can you get a playground like that at taxpayer expence.

[Horse]

It depends on whether an individual would have shares in a feedlot, then I guess they can buy as many cattle as they choose.
I know that individuals with off farm income that amounts to more than their earnings from the farm are limited to losses they can claim from their farming operation.
Individuals who have non farming endeavors, professional corporations such as doctors etc. would have restrictions as well, particularly if their corporation did not include a farming divison.

[cowman]

I think grassfarmer is pretty much right?
It wasn't just doctors and businessmen who got in on this deal, but a whole lot of farmers?
Don't know if this is still how it is or not but this is how it sure used to be done:
A farmer could borrow $200,000 dollars at prime or slightly above prime from the feeder associations? So he has a good year, maybe sells a slug of canola into a good market or something, and needs to offset some income so he doesn't treat the government too good? Borrows the feeder association money, buys calves in the fall, and puts them in a custom lot? Now when he sells them he can declare the net profit...but he has already claimed the $200,000 as a cost the year before? So he is now obligated to buy another $200,000 worth of calves the next fall to off set the big bucks he got when he sold the calves in the spring? It was great going in ...not so nice going out? What he was doing was deferring taxes? You will find a lot of older farmers who are still locked into this cycle and not willing to send the government the big tax check...that sooner or later will have to be paid!
In reality that has been what has driven the custom feeding business. That is why come late November, early December you usually get a rise in calf prices...it is the tax money coming to the sale!

[cswilson]

We picked up 12 cents grid money and sold those steers at 1.01 so our numbers looked a bit rosier than those projections.

[cowman]

So I wonder when they quote like 87 cents as the fat market, how many cattle are doing better than that? Are large numbers being sold on the grid and how many make a premium on that grid? Do the large feedlots target a grid price? Do all packers participate in this type of sale?
It would seem to me it would be to the packers advantage to just buy them live...no grid?

[cswilson]

Some people have calves they can't afford to feed and some have calves they can't afford not too-I got so sick of being told my yearlings weren't 'big' enough I started retaining ownership-I think a 1320 average shrunk weight is 'big' enough for most finished cattle-over last several years we've averaged about a dime on the grid so we don't sell alot of feeder cattle. I think everbody should feed a little package of tail enders-if they break even for you think of how good your better calves would do-it's amazing how my 'crap' pen has dollared out over the years.