Posted 5/3/2021 06:03 (#8984374 - in reply to #8982665) Subject: RE: Current cattle biz? Quit or stay?
To the people who are sour on cattle: All you do is sell feed, after cattle process it. There's a lot of different kinds of feed, different methods of processing feed, and different ways to market feed. If you raise your own feed, you have more options. If you have to purchase a significant amount of feed, not so many options, and have to have a sharpen your pencil more often, and are just really trying to mark up the price of the feed you bought. Guys that buy cattle and place in a commercial feedlot are just trying to roll dice and make money without working.
If you have a small cow/calf operation, and own the grass, some years your grass isn't worth much, some years, a lot. If you can raise wheat pasture, its free, high nutrition feed for calves, that can be sold pretty high at times......but you better be a good cattle buyer. If you have a LOTTTT of cattle, and such definition varies, you may sell a LOTTTT of feed and make a pile of money, but there will be years that feed prices go down, you have negative margin, and lose a LOTTTT of money.
If you feel the packers are making too much margin, and will continue to get rich, sell your land, buy stock in the packer, then you get the gravy without being screwed by the packer, and don't have to work for it. Same deal with oil companies; sometimes they make a fortune, sometimes they go broke, and the investors with it......
But there's no other animal that I care to own, that can convert roughage to $$ like cattle can. Its just a matter of what roughage can be sold for. Some people pay way too much for land to grow roughage, some BTOs make a lot, until they go broke or die. Some small operators live a happy lifestyle.
Bottom line: profit is not guaranteed, should not be guaranteed. Enjoy each day, love your family, appreciate your friends.