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Re: Why arent more people in the feeder calf business


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Posted by JimS on December 13, 2010 at 19:50:34 from (209.148.96.6):

In Reply to: Why arent more people in the feeder calf business posted by brandonh on December 13, 2010 at 14:35:36:

This will sound counter intuitive, but people are mistaken in believing that you make money putting weight on cattle. The truth of the matter is, you make money knowing when to sell and when to buy.

For example, if 4's are selling for significantly more than 8's, why on earth would you spend on diminishing returns? Because that's the way grandpa did it? Because the neighbor does? There's a sound business plan. Recognizing what is over valued and what is undervalued is the key to taking profit. Sell what you have that is over valued and buy the under valued. Certainly easier said than done, but given experience it works. Of course you must constantly watch prices and be very aware of what is happening and what operating costs are. For example, a friend of mine bought fleshy or fat 680 pound steers cheap. No one at the yard wanted them. He took them home, essentially did not feed them, brought them back two months later and made $100 a head. He knew when to buy and when to sell.

Folks will tell you that is a lot of work. Sure it is, but what isn't. If you are expecting to turn a profit through no effort, you are kidding yourself. Also, not being aware of local prices and expecting to be profitable is like buying a stock or a position and never checking on it or monitoring it. Futures, corn prices, cattle of feed, alleged consumer demand, are meaningless when you sell locally or at the local barn. All that matters is today's price and what you have to sell and what you can replace it with.

As for the guy calving in the snow, why would you do that? You can alter your herd to calve whenever you want. Why not calve when the weather is good and the survival rate better? Also, he will now be trying to breed back at the most difficult time of the year. Your breed back rate is better and quicker when the days are longest. Why wouldn't you take adavantage of that? I guess if someone had a contract paying a premium for all that hard work, maybe, but why not be smart?

If what you are doing works for you, do it. Don't be put off by nay sayers. There are people who consistantly make money in cattle.


All the best,
Jim


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