|
mercer county, il | I’m not a big feeder, so take this with a grain of salt.
Depending on the scale they want to get into feeding, I’d be concerned with the speed with which equity could be burned on cattle starting out. Equity I assume they don’t have to burn. And as far as the guys “insuring a profit” of fats, if they’re forward contracting, yes, I can see it. If using LRP, the cost to lock in a profit is generally your profit margin.
I guess to me it would depend on how they want to go about it. Starting smaller and not wrapping up a ton of money in facilities and equipment? Id say go for it, and expand as equity permits. If they want to build a 300 head building, and start an operation from scratch? I feel that would be a poor decision.
There’s a lot of money to be made, and lost feeding cattle. Losing 100k in a market downturn sucks if it’s equity. If it’s borrowed money and you don’t have the equity to cover it, probably game over. | |
|
Young farmer and young farmer’s daughter question
