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Anybody read the article in NE frmer magazine bout feeding cattle?
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Tommy
Posted 12/5/2012 08:14 (#2733886 - in reply to #2732636)
Subject: RE: A Few thoughts


Iowa
There is nothing to be gained by expending a molecule of effort being a complainer (clicker) or their cheerleader (foggyday), complaining about how someone else has it easier than you.

Good managers realize that success is a moving target, and don't continue to do something because they enjoy it or it used to work. The most profitable use of assets, be it land, labor, or capital, will change over time and the real caveat is to know when to continue on or cut your losses--and the problem with that is we never know which is/was the correct move until after the fact.

We need to be asset managers, not farmers. Our goal needs to be financial security, not driving a tractor or looking at cattle lined up to the bunk (although that's about the nicest sight EVER).

I fed my family and built net worth utilizing sub-$2 corn by farrow to finish for 20 years. When the writing was on the wall that that wasn't going to continue to work, I bought feeder pigs for ten years. When the opportunity to sell $6+ corn came along, I opted for custom-feeding hogs. My timing probably wasn't perfect each time, but I spent serious desk time analyzing my choices and opted for a change, and each time it kindof worked out.

I like to feed a few calves. 4 times in 35 years (this year being one of them) I decided the risk/reward was not in my favor, so we are hauling our $7.50 corn to town now while the weather is good, and are getting $100/rd. bale for our hay.

When these changes left me with excess labor, I started an off-farm business which has done well and, once the ag economy's fortunes swing the other way, will probably be the major profit center here.

I learned decades ago that I couldn't compete with my neighbors based on financials--I was worth ZERO and many of them were worth millions. And I was too conservative to borrow millions to try to play along side of them, so I had to do my own thing. Dreams are what we think about. Goals are what we can accomplish with sound business planning.

Back to the original question: I realize that a full-time feedlot has fixed costs that can be partially be covered by staying full (feeding cattle loses less $$ than sitting empty), and that can be their business plan for keeping in operation, at least temporarily. But for a small, "farmer feeder", there may be a better utilization of assets($ and Labor) and that may or may not be off-farm--but regardless, it will be a moving target if one wants the highest ROI.

Edited by Tommy 12/5/2012 08:15
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