Profit from farming

The Novice

I recently inherited a farm on about 100 acres. I am not experienced in farming and I was wondering how many beef cattle a farm of this size would support. Also if I were to buy wainlings and keep for 2 years what profit range could I expect per animal. I don't know much about farming but it seems like to make decent money on cattle you would need about 100 of them.

play it again

Plant it or rent it , that's the only way to make money from a farm , plant it and sit back and watch it grow , rent it with a 3 year lease and sit back and let someone else do the donkey work but to fully stock and run a hundred acres , it might be years before you see a cent of profit , if any

Axwell

Thread moved from E&BM

darragh_haven

Do not plant it. No better way to devalue your asset.
It all depends whether you are going at it full time or part time.... etc. Good land or bad land, well set up with roadways and water or not etc.

vermin99

I'd advise renting out say maybe 80 acres for a while.Hold onto 20 and Maybe try summer grazing for a few years till you get used to stock and spotting a sick animal.you will also find out whether you like it.Will also cut out wintering.Not masive money in it but good for getting experience.I started at that on the bit of land we have following from advice i got on this forum.Eventually i moved into bucket rearing calves and selling on at 18 months....which is mpre profitable if you dont get wound up and buy massively overpriced calves😯

danjoe

The Novice wrote: »

I recently inherited a farm on about 100 acres. I am not experienced in farming and I was wondering how many beef cattle a farm of this size would support. Also if I were to buy wainlings and keep for 2 years what profit range could I expect per animal. I don't know much about farming but it seems like to make decent money on cattle you would need about 100 of them.

It depends upon location,land quality and facilities available, no matter what numbers you have it's difficult to make a good income from cattle,even harder when starting from scratch

The Novice

I have been advised to rent the land already, the farm has already been used successfully to hold 80 cattle and I am sure that my uncle never had to buy extra silage. I believe a weanling will cost about 350, and then keep him for 2 years he should be worth close to 1000 for beef. It would mean 35000 to stock 100 cattle and 100000 in 2 years. If I rent the land for sure the renter will use the farm for grazing and wintering cattle. There is a large silage pit full of silage and a large slatted house to winter the cattle. I am aware that I will have to pay to cut silage in the summers and buy nuts to finish them before selling and there could be other expenses such as vet fees. But I either way I don't understand what I am missing here. I can see that so many people say that it is hard to make money online beef and they are people with much more knowledge and experience than me, but it you have a big stock I can't understand how you would not make a reasonable profit.

buffalobilly

You will not buy much of a wenling for €350 for
Any thing decent you would be talking about
€650 plus

CloughCasey1

buffalobilly wrote: »

You will not buy much of a wenling for €350 for
Any thing decent you would be talking about
€650 plus

Fr weanlings would be 350 and be around the 1000 mark at 2yrs.

Kovu

Fair play to you for trying to make a go of it anyway.
The main thing I'd worry about would be how well you know stock, to watch for illness, how much to feed & what/when. Do you have anybody to help you for the first year or two? Not to put you off but it'd be a big jump to go from no stock to buying in 100 weanlings and arranging silage and fert/contractors etc if you have no prior knowledge or help.

Panch18

The Novice wrote: »

I have been advised to rent the land already, the farm has already been used successfully to hold 80 cattle and I am sure that my uncle never had to buy extra silage. I believe a weanling will cost about 350, and then keep him for 2 years he should be worth close to 1000 for beef. It would mean 35000 to stock 100 cattle and 100000 in 2 years. If I rent the land for sure the renter will use the farm for grazing and wintering cattle. There is a large silage pit full of silage and a large slatted house to winter the cattle. I am aware that I will have to pay to cut silage in the summers and buy nuts to finish them before selling and there could be other expenses such as vet fees. But I either way I don't understand what I am missing here. I can see that so many people say that it is hard to make money online beef and they are people with much more knowledge and experience than me, but it you have a big stock I can't understand how you would not make a reasonable profit.

For starters the 35k to buy the stock is only the initial cost - you have significant costs to keep them for 2 years, and then when you sell the cattle you have to replace them.

Also your "system" isn't really a system, for what you are talking about you would need 2-3 lots of cattle so that you have weanlings, young cattle and fat cattle on hand for most of the year

Really to have 100 acres stocked, and actually able to manage the place, your talking anything from 80-100k invested in stock

Whatever way you go about it you'll be doing well to pull 25k out of it from cattle - which if you have another income would be taxable @ the high rate

Alternatively you could lease it, a 5-7 year lease is tax free up to an income of 22.5k

so you make the same money in a lease as farming it - but no tax with the lease, and no money tied up in stock. From a financial point of view its a no brainer

_Brian

You mightn't like it but the best advice has been given.
Split the land block. Keep back 30-40 acres and stock and farm that, rent the other 60-70 acres out say on a 3year let. When the 3 years is up you'll have built a world of experience in stock and farm managment and will be in a position to go forward.

You've been handed a golden opportunity here, the land isn't going to evaporate if you don't farm it all yourself straight away. I wish you luck.

west79

The Novice wrote: »

I have been advised to rent the land already, the farm has already been used successfully to hold 80 cattle and I am sure that my uncle never had to buy extra silage. I believe a weanling will cost about 350, and then keep him for 2 years he should be worth close to 1000 for beef. It would mean 35000 to stock 100 cattle and 100000 in 2 years. If I rent the land for sure the renter will use the farm for grazing and wintering cattle. There is a large silage pit full of silage and a large slatted house to winter the cattle. I am aware that I will have to pay to cut silage in the summers and buy nuts to finish them before selling and there could be other expenses such as vet fees. But I either way I don't understand what I am missing here. I can see that so many people say that it is hard to make money online beef and they are people with much more knowledge and experience than me, but it you have a big stock I can't understand how you would not make a reasonable profit.

You are starting off from a very low knowledge base. My father spent his life farming and I was by his side for the past 35 years of it. His father also spent his whole life farming and he's father also. They were great farmers and stockmen. They could farm by looking over the wall and see a sick animal a mile away. They could also know how much grass was infront of the cattle and how long it would last. From your post it is clear that your plan is to buy cheap and sell dear and that's your profit. Ask yourself the following questions:
What's the quality of my land?
Condition and age of grass?
What's the Fertility of land?
What the condition of the fences?
What is my grazing plan?
What's the quality of the pit of my silage?
What quality and weight of stock to buy?
What quality and weight of stock will I sell?
What quantity of fertiliser?
What quantity and quality of feed?
How many hours a week will I need to work this.
How much will I get in direct payments?
If you can not answer most of the above you are in trouble and you need help before you get in too deep

The Novice

Kovu wrote: »

Fair play to you for trying to make a go of it anyway.
The main thing I'd worry about would be how well you know stock, to watch for illness, how much to feed & what/when. Do you have anybody to help you for the first year or two? Not to put you off but it'd be a big jump to go from no stock to buying in 100 weanlings and arranging silage and fert/contractors etc if you have no prior knowledge or help.

I would have someone with decent knowledge and experience to help me with buying the weanlings, and he will be able to guide me on feeding them etc, however that said it will be a long road and plenty of lessons learned in the first few years

vermin99

As said start small,the less you invest the less you have to lose.It will be a learning curve but that doesnt mean you cant enjoy it along the way. One piece of advice id give you if you are buying weanlings is make sure their properly weaned and not sweating,balling and flighty in the marts.you'll spot them a mile away anyway. Whiteheads or angus could be agood start as there not to cheap,not to dear. Fatten easy off grass and have the bonus going for them. Also hardy and above all the majority are quiet.good luck:D

Feckthis

Panch18 wrote: »

For starters the 35k to buy the stock is only the initial cost - you have significant costs to keep them for 2 years, and then when you sell the cattle you have to replace them.

Also your "system" isn't really a system, for what you are talking about you would need 2-3 lots of cattle so that you have weanlings, young cattle and fat cattle on hand for most of the year

Really to have 100 acres stocked, and actually able to manage the place, your talking anything from 80-100k invested in stock

Whatever way you go about it you'll be doing well to pull 25k out of it from cattle - which if you have another income would be taxable @ the high rate

Alternatively you could lease it, a 5-7 year lease is tax free up to an income of 22.5k

so you make the same money in a lease as farming it - but no tax with the lease, and no money tied up in stock. From a financial point of view its a no brainer

But wouldn't he get SFP when he is farming it. That would be a nice add on to what he makes from cattle.

patsy_mccabe

You need someone to guide you on day to day stuff. Have you any relative nearby farming? Often it's the simple things that catch you up. There is a lot of skill in farming, even though the rest of society doesn't seem to take the same view. Simple farmer, the simple life and all that.

The Novice

I have found the advice and comments excellent so far, and I can say that the first thing I have learned is just how little knowledge I have of farming at the moment. I do have a neighbor who I would certainly need to ask for advice at times and certainly I would attend several marts, without buying anything just to get a feel for the thing. My uncle always kept cows and a bull and kept the calves all the way through until they were ready for the factory. I am aware that you would have a fair profit from that from his success rate, but trying to pick good cows and a bull and dealing with calving would be well above my head at the moment. The main thing I have learned here so far is that I would need to start small. For sure I will make mistakes at the start as everyone does, but if I start small and gradually build up the stock I still think it could be a successful business with time.

The Novice

vermin99 wrote: »

As said start small,the less you invest the less you have to lose.It will be a learning curve but that doesnt mean you cant enjoy it along the way. One piece of advice id give you if you are buying weanlings is make sure their properly weaned and not sweating,balling and flighty in the marts.you'll spot them a mile away anyway. Whiteheads or angus could be agood start as there not to cheap,not to dear. Fatten easy off grass and have the bonus going for them. Also hardy and above all the majority are quiet.good luck:D

I certainly prefer the idea of calmer cattle. My uncle kept a lot of limousine cattle and they were very wild to deal with. The only things I would say in their favour is that they tended to be strong and healthy and their calves were hardy from a very young age. However I would prefer to go for a calmer breed at least at the start until I get used to them. From what I have seen so far Angus and Herefords seem like good beef producing cattle.

coolshannagh28

First thing you should do is establish if there are entitlements on the land if not try to get them established ,farming is subsidised and trying to farm without it is senseless .
A 100 acre farm needs a minimum of 20k in subsidy to be viable be it SFP GLAS ANC etc.
Then study your options.
The best option is to sell it and use the capital in a higher return enterprise.
Next best is to plant it and draw your premia roughly 20kper annum on top of your SFP in a tax free investment yielding around 10k per acre at 25 to 30 years.
Third best is to lease it and retain your SFP ad detailed above with tax free rent status.
Last is to farm it but if you do maximise premium and minimise expenditure.

raypallas

coolshannagh28 wrote:

First thing you should do is establish if there are entitlements on the land if not try to get them established ,farming is subsidised and trying to farm without it is senseless . A 100 acre farm needs a minimum of 20k in subsidy to be viable be it SFP GLAS ANC etc. Then study your options. The best option is to sell it and use the capital in a higher return enterprise. Next best is to plant it and draw your premia roughly 20kper annum on top of your SFP in a tax free investment yielding around 10k per acre at 25 to 30 years. Third best is to lease it and retain your SFP ad detailed above with tax free rent status. Last is to farm it but if you do maximise premium and minimise expenditure.

I wouldn't agree that planting it would be a good idea as it would be an almost immediate way to devalue the land by half. I think best option as mentioned above would be to lease out some of it, keep a bit for himself and fatten a few cattle and start building his knowledge from there.

Username John

coolshannagh28 wrote: »

First thing you should do is establish if there are entitlements on the land if not try to get them established ,farming is subsidised and trying to farm without it is senseless .
A 100 acre farm needs a minimum of 20k in subsidy to be viable be it SFP GLAS ANC etc.
Then study your options.
The best option is to sell it and use the capital in a higher return enterprise.
Next best is to plant it and draw your premia roughly 20kper annum on top of your SFP in a tax free investment yielding around 10k per acre at 25 to 30 years.
Third best is to lease it and retain your SFP ad detailed above with tax free rent status.
Last is to farm it but if you do maximise premium and minimise expenditure.

All valid options - but I think
- I dont agree second best option is to plant it, I think this would be option 4, as whilst it may see a return, there is no going back on this option. So for the OP, it shouldn't feature so high IMO
- I dont think you can claim SFP, and lease it out - for claiming SFP, you must be actively farming it.

My advise would be let out 80 acres on a 5 year lease, that'd give you ~15k / year tax free. If I were you I'd try to keep as much of this out of the farm as possible.

Farm the remaining 20 acres, start off small. See what you like / dont like, what works or doesnt. Look at investing in entitlements for the 20 acres before you spend a penny anywhere else, as these will (if bought at the right price) give you a defined return (which is lacking in most other areas of farming)

Best of luck

memorystick

I'm starting back on my own after a very bitter dissolve in the partnership. No yard, machinery or stock but a SFP. Have builders in building a 6 span slats and 35 ft lie back with outdoor crush. Doing B and B but would rather own stock.

People say I'm mad but they're great people to eat apple tart and drink tea! Most negative people have little to show for yheir work anyway. My first advice is to get to know a real sound, good farmer and ask questions. Genunine people will help.Draw up some kind of realistic 5 year plan. Avoid negative people. Best of luck.

freedominacup

memorystick wrote: »

I'm starting back on my own after a very bitter dissolve in the partnership. No yard, machinery or stock but a SFP. Have builders in building a 6 span slats and 35 ft lie back with outdoor crush. Doing B and B but would rather own stock.

People say I'm mad but they're great people to eat apple tart and drink tea! Most negative people have little to show for yheir work anyway. My first advice is to get to know a real sound, good farmer and ask questions. Genunine people will help.Draw up some kind of realistic 5 year plan. Avoid negative people. Best of luck.

Finally a bit of positivity. Op what do you want to achieve? Do you want to farm full time? If you do then maybe approaching another farmer dairy or tillage in your area might be an approach. You're bringing 100 acres and a bit of enthusiasm to the table. They get a expanded area to farm and extra labour to run it. You get to learn the ropes and hopefully s way to build equity. Put a timeline on the partnership and if it goes well you have options st the end of it.

ganmo

memorystick wrote: »

Avoid negative people.

Stupid!! Just because people are conservative or appear pessimistic is no reason to cut them from your life.

memorystick

ganmo wrote: »

Stupid!! Just because people are conservative or appear pessimistic is no reason to cut them from your life.

Conservative is not negative. My father is one of the most negative people I know. You know what I meant.

ganmo

memorystick wrote: »

Conservative is not negative. My father is one of the most negative people I know. You know what I meant.

Conservative can appear negative(resisting change etc.)
I'm a pessimist and as a result of comments like yours I regularly stay quiet when I shouldn't.

The Novice

I did some research and if you rent you can't receive the sfp. Otherwise I would certainly take that option as I would receive a good return without much input. I think a good option here may be as mentioned to rent 80% and keep 20 acres for my own work. I would keep the slatted house and silage pit and try to stock up slowly. Planting does not appeal to me as 25 years is a very long time to wait for a return, and although I have limited farm knowledge by all accounts, when I drive through the countryside I see much more fertile land full of cattle than full of trees. If planting was a good option I think more people would do it. The farm has seen 2 generations of successful cattle farming, and I would see it as a bit of a waste to plant it.

Panch18

memorystick wrote: »

I'm starting back on my own after a very bitter dissolve in the partnership. No yard, machinery or stock but a SFP. Have builders in building a 6 span slats and 35 ft lie back with outdoor crush. Doing B and B but would rather own stock.

People say I'm mad but they're great people to eat apple tart and drink tea! Most negative people have little to show for yheir work anyway. My first advice is to get to know a real sound, good farmer and ask questions. Genunine people will help.Draw up some kind of realistic 5 year plan. Avoid negative people. Best of luck.

Just to clarify, you have no machinery or stock and you are building a six span shed with lie back just to do B and B?? Am I reading this properly??

memorystick

Panch18 wrote: »

Just to clarify, you have no machinery or stock and you are building a six span shed with lie back just to do B and B?? Am I reading this properly??

Not to do B and B longterm. Its a green field site. Build once and be finished with it. There's more going on in the background.

kowtow

This is a situation which exists purely as a result of neglect to implement the CAP properly - so much so that you would wonder if it is wilful neglect and who benefits.

Nothing at all wrong with leasing entitlements, with land, in my opinion and allowing the farmer farming the land to benefit from the entitlements. If that increases the value of the lease by something, so be it, but it doesn't make economic sense that the lease should be increased by 100% of the premia.

That only happens because it is still possible, it seems, for the landowner to retain & claim the premium while leasing the land out. We're not too keen on Mothers who claim child benefit for children they are not actively looking after, and I don't see why we should be any different with land.

If that rule were enforced properly then the likelihood is that the tenant would pay something extra for the entitlements, since the economic value of the land is automatically higher, but less than the full amount because the entitlements would be of zero value to the landlord unless he rented them out with the land (or had other vacant land to use them on).

That's the spirit of the system and that is what should be enforced.

kowtow

jared_pain wrote: »

im well aware of the moral objections to the system but the reality is , there is nothing which prevents the land owner from receiving back the value of the entitlements he leases out and if the OP can do this , he should

Out of interest, if the landowner opts to retain the entitlements, is the existence of a lease any barrier to him (the landlord) using them on the leased land?

kowtow

as far as i know yes

you cannot draw subsidies off land that somebody else is farming ( the tenant in a lease in this instance )

if you lease out land , the only way you can collect the subsidies from it is through a pre agreement where the tenant draws them down but hands the cash value back to you , as the value is likely to vary in the coming years ,it would be difficult to put an exact value on the farms entitlements from the outset , the OP would need to have it stated in the lease that the tenant is to return to him all payments stemming from the farm per anum

a lot of agreements involve the tenant retaining perhaps 20% of the value of the entitlements but its not a pre requisite as far as i know , more an informal token of friendship

In which case isn't this simply a result of mis-pricing (depending on the rent of course)...

If the landlord must necessarily lose the income from the entitlement as a result of renting the land out, the position is the same for every potential tenant...

Are we really saying that land going at €300 / acre is really €300 + most of the CAP income?

Difficult to legislate against tenants being crazy... although it would have been nice (I suppose) to see the share of CAP element of the lease specifically excluded from tax relief under the recent budget incentives.

cozzie

kowtow wrote: »

We're not too keen on Mothers who claim child benefit for children they are not actively looking after, and I don't see why we should be any different with land.

My god, that so eloquently put.