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LJJ

Posted 3/26/2024 13:55 (#10681329)
Subject: Small Feedlot from Scratch

I'm looking for some information on starting a small cattle feeding setup from scratch. Some background on me; I didn't grow up on a farm but spent five or so years working on a couple dairy farms milking/herdsman/crop type work and owned up to 40 steers at a time. Spent a lot of time in the sale barn and have a decent idea of what good cattle look like vs. cattle that will be a headache. Got out of it to start a company that I later sold and currently have another company that can all be done out of my own shop with the three of us. I'd like to relocate (Probably ND near family) and buy some acreage and have the itch to get back into the cattle side of things. This would only be part time "hobby" that I don't need to support a family on but would still like a small return on my money.

Here are my questions:
How many head are needed to make it worth running a TMR down a fence line feeder every day? What are the pros and cons of running a ration that's a high percentage of silage? Silage seems to be the best return per acre for feeding cattle, at least in the dairy industry. I also would be fine buying distillers, beet pulp, etc. Although I'd like raise the majority of my feed to reduce risk. With that scenario in mind, how do I calculate how many days of feed/hd I can get off of each acre? Example: Year one all tillable is planted into corn, 60% combined, 40% chopped. Average yield is X, 800lb feeders have a daily intake of Y, days of feed per acre = Z. I understand ground and yields very significantly area to area. Just looking for a ballpark of say 150 bushel corn and I can adjust accordingly.

Is $500k total for land and equipment enough to give it a go? I'd like to 1031 some rentals into bare land anyway. Thank you for the help and wisdom, it's much appreciated!

Moose333

Posted 3/26/2024 14:03 (#10681335 - in reply to #10681329)
Subject: RE: Small Feedlot from Scratch

NW Wisconsin

Big boys will tell you TMR. IMO I have a full time job and nothing beats a self feeder.... There are guys that feed 100 head out on a self feeder. Depends on how much time you have and the availability of other feed sources nearby.
Silage is cheap but I think you would struggle to get weight on them quick enough. Im up north winter is a huge cost imo with bedding and rate of gain during cold spells. I would rather combine the corn for grain and feed that with a pellet and leave the cows on the stalks for free food for them.

Will you be buying feeders or will you be doing cows to to get your feeders?

Not including land you should be able to get a pretty good set up for less than 100k

Hick

Posted 3/26/2024 14:29 (#10681367 - in reply to #10681335)
Subject: RE: Small Feedlot from Scratch

Sw mn

You can buy it cheaper than building it. Make sure you have some land to spread manure on.

Find a place close to a beet pulp plant for cheap feed, it’s high moisture and the trucking adds up. Cheaper then silage a lot of times.

hinfarm

Posted 3/27/2024 09:40 (#10682447 - in reply to #10681335)
Subject: RE: Small Feedlot from Scratch

Amherst WI

I'd probably vote self feeder too.

You have dry corn in a bin you aren't married to feeding it to cattle if the market goes real south, you can take it to town and sell it.

At your size the efficacy of growing wet feed will be lost on mixing feed once a day, and you will have hard time staying ahead of spoilage at that size with wet feed as well.

HuskerJ

Posted 3/26/2024 14:55 (#10681402 - in reply to #10681329)
Subject: RE: Small Feedlot from Scratch

East of Broken Bow

Before you build, check environmental regulations. Some places require permits, lined ponds to catch runoff, etc, etc. That can make a big difference in start up costs.
Generally, if you can find a feedlot you can use, you can buy or lease it cheaper than you could build it, and you should be grandfathered in, depending on your State regulations.

puff33m

Posted 3/26/2024 15:35 (#10681450 - in reply to #10681329)
Subject: RE: Small Feedlot from Scratch

N FLA

I sold rental houses, but couldn't figure out how to 1031 myself farmland. Does it take creating a new farm entity to lease it to?

LJJ

Posted 3/26/2024 15:44 (#10681459 - in reply to #10681450)
Subject: RE: Small Feedlot from Scratch

puff33m - 3/26/2024 15:35

I sold rental houses, but couldn't figure out how to 1031 myself farmland. Does it take creating a new farm entity to lease it to?

I believe I would have keep my properties in my LLC, do a 1031 exchange, and then rent as either an LLC or sole proprietor from myself. As long as it's for income producing real estate of equal or greater value I believe it's no problem. I'd consult with a 1031 attorney before hand obviously.

puff33m

Posted 3/26/2024 19:12 (#10681673 - in reply to #10681459)
Subject: RE: Small Feedlot from Scratch

N FLA

Yeah my rent houses were in my name and my farming is in my name. I wondered if there were loopholes around it. I don't know if the IRS recognizes a sole member llc as any different from another sole member llc when they are both the same member. But another question for another day.

Douglas

Posted 3/27/2024 12:29 (#10682683 - in reply to #10681673)
Subject: RE: Small Feedlot from Scratch

Central North Carolina

puff33m - 3/26/2024 20:12 Yeah my rent houses were in my name and my farming is in my name. I wondered if there were loopholes around it. I don't know if the IRS recognizes a sole member llc as any different from another sole member llc when they are both the same member. But another question for another day.

Generally a single member LLC is a disregarded entity for tax purposes.

See here

puff33m

Posted 3/27/2024 20:34 (#10683290 - in reply to #10682683)
Subject: RE: Small Feedlot from Scratch

N FLA

I would think that's going to be the OPs problem when it comes audit time. But Im no tax attorney.

He's gonna have plenty of of problems with this endeavor though.

A&M

Posted 3/26/2024 17:40 (#10681561 - in reply to #10681329)
Subject: RE: Small Feedlot from Scratch

So I did exactly what you’re asking about. 6th generation cattle man. My family Lost everything fighting Indians and the drought in the 1870s. Restarted in the early 1900s. Somehow my grandparents had 7 kids and I was the grandson chosen to get kicked off the farm and sent to collage to fend for myself. Got out and bought a run down old feedlot close to my family’s ranch and rebuilt the set up one day at a time. It was dirt cheap. I feed silage mostly but getting farmers to actually sell it to you at silage price is a tough thing. Most want 15-20x the cash bid for corn. I’ll say I’ll buy it at 7x like the rest of the feedlots around do. They just do the farmer chuckle. Wet distillers and wet beet pulp are both a great alternative. At times it’s cheaper that growing silage yourself. Mixed with some dry hay for some dry matter and makes for a cheap ration. I plan for 365 days a year feeding but hope to have 5 months of pasture. However my beet pulp bill was 60$ a ton last year. So not going to keep the bid at that price. One thing Iv learned is keep all your work in house. Custom work definitely. Guys want to work with the big feedlots. NOT YOU! Iv spend more on equipment that I ever thought I would. Happy to lend equipment out to neighbors.

A&M

Posted 3/26/2024 18:05 (#10681584 - in reply to #10681561)
Subject: RE: Small Feedlot from Scratch

I have found sheep to be more profitable than cattle. A lot of sheep used to be raised here. Find yourself a junky old silage bagger. Decent way to store your feed. It’s about the only way to harvest and store silage without hired help.

NDCat99

Posted 3/27/2024 16:33 (#10682949 - in reply to #10681329)
Subject: RE: Small Feedlot from Scratch

E ND

I wouldn't want to discourage anyone but it can be tough to do what you want to do. Are you wanting a house in the $500k or no? To find a homestead with an existing feedlot or livestock facilities and any amount of good cropland within 100 miles of a big city (if you care) is about impossible. You can find a house with some pasture, or some land but that's a tough combination to score as an outside trying to buy on the open market. Seems most building sites have already been split off and might have 5-20 acres but nothing adjoining. With livestock and growing feed being spread out is a efficiency killer unless you can find a place with some hay ground and a livestock facilities and just buy feed to finish on. That would probably be the best option unless you have a lead on that "needle in a haystack" type property. The decently priced land is all rough country and the distance to markets to bring in feed is expensive.

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