Is it possible to make a profit on dry stock

MungoMan

In all honesty, is it possible for someone who produces his/her own calves, and keeps the calves until they are fit for the abatoir (winters them for 2 seasons) to make a nett profit ? I'm talking about a situation where a farmer has say 50 cows, producing 50 calves, and selling 50 finished animals per annum, i.e turnover would be around 50 grand a year (give or take a few grand)

I'm not talking about subsidies, I'm just taking about the profit on trading.

That's the position my father is in......I have a suspision that he is making a loss on the trading, despite being a shrewd and good farmer. He rarely loses animals to illness, rarely has dead calves at birth, he is very diligent.

But he's not one for sitting down doing maths, or future projections, he sort of plods along, and works hard. And of course he gets a lot of subsidies.....

I would even hazard a guess that he uses some of the subsidies to fund the farm, how sad is that ! I'd say his overall costs exceed his trading turnover. Honestly though, is this common ?

For example, he puts out a lot of fertilizer, runs two tractors (one of them is 1 year old), a quad bike, a fair bit of machinery, a good land rover, he pays for silage cutting, getting slatted shed tanks emptied, fencing, killing weeds, veterinary stuff, a LOT of livestock meal to help fatten the cattle, and various other expenses.... To make things worse, he rents some land to faciliate some extra livestock numbers (more silage)

Any comments on this, is my fathers situation common ? Are there genuinely a lot of farmers making a loss on trading (and living on some of the subsidies) ?

pakalasa

Here are the official farm incomes from the CSO. It looks at the industry as a whole, but it will give you some idea.
But yes you are right, most cattle farmers do eat into their subsidies. Not so much sad as a fact of life. Subsidies = cheap food on the consumers table.


http://www.cso.ie/releasespublications/documents/agriculture/current/oiiadv.pdf

Sam Kade

He would make more profit and have less work if he sold them as calves. The only way to make profit from calf to beef is to have a very low cost system. You would need a low stocking rate have a long grazing season and finish them off grass. Even with a low cost system it is still though going with the price factories are paying for cattle at the moment.

MungoMan

pakalasa wrote: »

most cattle farmers do eat into their subsidies.
http://www.cso.ie/releasespublications/documents/agriculture/current/oiiadv.pdf

I see from the CSO release that there is a production profit overall......even before subsidies are taken into account (however doesnt take interest on borrowed capital and land rental into account).
This paints a better picture than I thought........

You say most cattle farmers eat into their subsidies........are we saying that most cattle farmers would be better off to sell all their livestock, leaving the land idle. Perhaps taking a crop or two of silage or cereals for sale.

The CSO figures point to an overall profit.... clearly beef producers are making a loss (eating into their subsidies), does this mean there is a profit being made from dairy, cereals, other farming types ?

MungoMan

Sam Kade wrote: »

He would make more profit and have less work if he sold them as calves. The only way to make profit from calf to beef is to have a very low cost system. You would need a low stocking rate have a long grazing season and finish them off grass. Even with a low cost system it is still though going with the price factories are paying for cattle at the moment.

Is there consensus on this, it's better to sell the calves ?
My father doesnt have a low costs system, just an average costs system.

wiggy123

sell the calves..cuts out wintering costs+more for the cows,ie grass+less labour,etc..
depends on setup,etc....maybe selling weanlings could be best

jfh

hi mungoman, i'm going to reply to this as it's something i've been trying to figure out from a distance, my father has a suckler herd and i'm looking it from the outside, really enjoy the work but no way would you make a living out of it. breeding you own calves and rearing to 2yrs is not profitable, he picked up cheap weanings in the autumn that will make more than the one we breed.they wouldn't look as nice and are inferior in most ways but at the end of the day, you got to ask yourself do you want to make money or have the best looking cattle. low cost is the way to go i think, to answer you question, yes your fathers situation is common, unfortunately.let us know what decision you come to

MungoMan

a lot of people reading this will have farms which have only dry stock

can anyone honestly say they are making a profit before subsidies ?

snowman707

MungoMan wrote: »

a lot of people reading this will have farms which have only dry stock

can anyone honestly say they are making a profit before subsidies ?

if they hadn't stock in the reference years what would their subs be,

2013 is only around the corner, heard a lot of hearsay but who knows how future payments will be calculated.

8560

sales are 50k. costs are?. 50k+?. he enjoys his farming and is not farming soley for profit.

MungoMan

snowman707 wrote: »

if they hadn't stock in the reference years what would their subs be,

2013 is only around the corner, heard a lot of hearsay but who knows how future payments will be calculated.

I suppose that's the key point.....my father gets what I would consider to be very good subsidies, because he had a fair amount of suckler cows in the base years.

It turns his operating loss on farming activities into what I would consider to be a worthwhile profit, and as someone else said, there is the lifestyle aspect, and you cant put a value on that.

Sam Kade

MungoMan wrote: »

Is there consensus on this, it's better to sell the calves ?
My father doesnt have a low costs system, just an average costs system.

I assumed by your first post that he was a dairy farmer rearing all his calves.

me_right_one

Mungoman, what you've described is what most farmers are doing. I dont believe there is a profit to be made (Or at least not a worthwhile one, 10K after everything)

MungoMan

Sam Kade wrote: »

I assumed by your first post that he was a dairy farmer rearing all his calves.

no, not a dairy farmer, he doesnt sell milk

he is a suckler cow (if thats how you spell it) farmer

yessam

I think the 2nd wintering of you cattle is where most of your profits are being eaten into. Its not that hard to keep weanlings up over the 1st winter and if they get a run on grass they can come into good forward stores. If you have nice quality (and Customers) good prices can often be got at this staage. Its from here on the real expence comes

MungoMan

I'm still waiting for a cattle farmer (regardless of at what stage in the cattles development they buy and sell) to come on this thread and say something like

"I am a beef farmer with x cattle, and last year, I definitely made a nett profit on my day to day farming activities (not taking subsidies into account).

Please let's hear it, nobody knows who you are

MungoMan

OK, I'll start it

Last year, my father, with a turnover of around 50'000 probably broke even (or made a small loss) on trading activities before subsidies are taken into account