Farming Chit Chat

bob charles wrote: »

take Junior hurlers the first bull calf at 410 kilos, feed for 150 days at €3 a day = €450 + €75 costs for everything else dosing/vaccines/mortality/interest/haulage/labour = €525 + sale price tonight €1190 = total cost €1715.

after 150 days he would be 650kilos (say 1.6lwg) with a KO of 58% = 377kilos @ €4 a kilo = €1508.

I know my figures are rough but, Do the sensible thing :D

We buy in excess of 100 stores per year and have a strict grass based system (less than 8 ton of rashin brought last year). all winter housing is long paid for, as is all the machinery.
If we don't get €200 profit/head/year, the farm would be rented out (130 acres of good grazing @ €180 = €23,400) . We don't take one year for the accounts, we average it out over 3 years, if it drops below 200 euro, look at where costs can be squeezed or end product price increased. If you cant find anything, there is hard decisions to be made.
While my dad is still the brains of the operation, he is "officially retired", but he sees that the farm is bringing in less than €25,000 a year and said to me, not give up the day job. Even tho we operate at substantially better figures than bob has posted..... I just may have to do the sensible thing;)

Just saw Tipp mans post, thats the way we calculate profit too (with out actually emptying the account)

KCTK wrote: »

From a pure accounting point of view you are correct that this farm would show a "profit" in its accounts due to the increase in stock due to keeping the heifers in the year. From a tax point of view this "profit" would be reduced by 25% for your tax comp due to stock relief (100% if just after taking over the farm). So you are correct in technically saying there is a profit, but as we all agree cash is king so saying you have a book profit at the end of the year and no actual money in the bank ait much good when you go to the shop.

In reality making a profit means SFA, many "profitable" businesses go bust every year (eg Target delievery gang a few weeks ago). Having cash to pay bills and survive out of your "profit" is the most important thing.

Sorry for all the " " around "profits" but profit is really only an accounting concept for measuring how you are doing, CASH is the KING

I agree with you totally. I said as much, when I said it's negative cash flow!
One thing I'm not sure about though, is how you value the extra stock kept back, before deducting the 25% stock relief!!
Do you value at market value or cost of production That always confuses me a bit.

KCTK wrote: »

Haha, now there is a good question, the general rule of thumb is that cattle you breed yourself are valued at 60% of their Market Value in your accounts (accounting rule on stock is that it should be reflected at lower of cost or Net realisable Value so using 60% of market value is supposed to give you rough estimate of cost).

Where the fun can come in is in what are those cattle you breed yourself actually worth as you are only really estimating what you think the amount is. Room there to adjust your "profit/loss" up and down in a year....

Thank you ............ It's funny the way I keep my best heifers only for replacements. When I smoke my pipe at year end, and look at them for valuation purposes I see nothing but pot bellies, and narrow arses:cool:

redzerologhlen wrote: »

The 460 was including the cost of rearing the calf and was including the price of selling the culls. All the costs associated with keeping the cattle were included.

Wow.
I don't mean to have a go or knock the work of your group but it seems very low. It must be base on a very large herd size where economy of scale is the key.

bbam wrote: »

Wow.
I don't mean to have a go or knock the work of your group but it seems very low. It must be base on a very large herd size where economy of scale is the key.

Did he not say that it was in the Burren? ie. Less housing required, lower feed costs, better animal health because outdoors etc. ??

bob charles wrote: »

You boys must be very very shrewd farmers as to make 200 clear on animals a year is close on impossible. I presume you are excluding an SFP in your calculations. The industry standard nowadays for finishing farms is somewhere around €50 an animal after all expenses.

Looked impossible to me too......was nearly going to cash the sheep

bob charles wrote: »

You boys must be very very shrewd farmers as to make 200 clear on animals a year is close on impossible. I presume you are excluding an SFP in your calculations. The industry standard nowadays for finishing farms is somewhere around €50 an animal after all expenses.

The problem is Bob that guys are pumping nuts and fodder into bulls at huge rates and huge costs and are left with feck all - they then need a large turnover of animals to make any kind of money. Its a vicious circle.

Darragh is doing 200 because i would imagine he is spending hardly anything only silage and vetinary on them and not much else. In fact if he has silage to buy back cattle this autumn he'll do a whole lot better than 200

We are making 180 on small store cattle buying in the spring and selling in the autumn - zero fertiliser spread (apart from reseed) - only costs are mart fees, transport (our own) 2 doses and TB test. No sheds needed, no silage needed, definately no nuts needed, feck all in costs and feck all work. Admittedly it could be a very tough year this year as the arse has fallen out of the market - but this is the first year in 10 we have gotten caught - and we haven't sold an animal yet so we haven't actually been caught yet but with the arse after falling out of the market we more than likely won't make much

Fellas would be better off with less animals, less turnover of animals and making more per animal IMO

rancher wrote: »

Would be good going to get a 100 bullocks from 410 liveweight average to 430 deadweight in a year.....have to double his weight..1.1kg day gain or is my maths way out
what about fixed costs, accountany, farm insurance , machinery repair, etc

410??
A store, say 480kg liveweight, at 2.50c/kg =1200€

Everyone has different fixed costs so cant work out per head...previous poster said buildings/machinery well depreciated so will be lower than average

Kevin1150 wrote: »

410??
A store, say 480kg liveweight, at 2.50c/kg =1200€

Everyone has different fixed costs so cant work out per head...previous poster said buildings/machinery well depreciated so will be lower than average

Your right - you'd get some bullock in the mart today for 1200

Personally we buy a bit lighter and sell a bit lighter but agree with what you are saying

Tipp Man wrote: »

Your right - you'd get some bullock in the mart today for 1200

Personally we buy a bit lighter and sell a bit lighter but agree with what you are saying

We don't buy stores either..just weanlings. Find that the average 430-440 by the time their adequately fleshed (3,3+,4-). They would be bought hungry if you know what I mean;) Not overdone with meal. Good r grade bulls that a nice percentage would feed into u's!

pakalasa wrote: »

Don't kid yourself, it's still a cost. Both are depreciating every year, in real terms anyway. Tractors will have to be replaced eventually, buildings repaired and maybe rebuilt completely in time. It's all a cost and should be budgeted accordingly. Same for suckler cows, every year they get older, ther are worth less.

Costs which have a direct impact on cash flow are what matters - not arbitary costs like depreciation - that's only an accounting phrase to spread the cost over time. The real cost is the annual amount you need to pay back for the loan for the shed or tractor i.e the cashflow. That is the key

Anyway Tractors hold their value on cost very well and a new tractor should last a stock man 20 odd years - a decent slatted shed should last 30 years - both with not much in the way of repairs which is a real cost.

As for suckler cows - plenty of them will make in the factory what it would cost to replace them - or not far off it

pakalasa wrote: »

:rolleyes: There you go - Depreciation !!!

And remember if you are short of cashflow, you can borrow. Once you generate a return higher than you are paying the bank in interest. Risky, but how many businesses have expanded this way.

But if you have a shed it will depreciate whether there are cattle in it or not - what do you allocate that cost against then

Assuming it is paid for then the real cost is the maintainence of that shed not depreciation. If its not paid for then the real cost is loan repayment and maintainence

Borrowing for cashflow should only every be short term i.e. an overdraft. No surer way of going bust than borrowing repeatadly for cash flow.