Question for you cowboys

[hank]

  Me and a buddy have about 20 head of cows. We would like to get some more. A couple of things holding us back. Money and grass. LOL
 Have any of you gotten a loan on cattle? 
 Do you feel like getting a loan on cattle is a good business decision?
 If you were getting a loan on cattle where would you go? Is there a bank that specializes in that sort of thing?
There are some people that will lease pasture around here by the head. What do you feel is a fair price to pay per head?
  Any suggestions would be appreciated.

[SLacowboy]

I started off by borrowing money on for cattle. FSA gives loans out specifically to get people started. Interest rate was 2.5%. Pay note once a year when you sale your calf crop. We least pasture by the acre. Im paying $10/A but not sure how long that's gonna last.

[hank]

That was a good start. FSA website had a lot of info. Thanks SLAcowboy.  How complicated was the process?

[Hog_Hunter_57]

If you save your pennies and pay cash for your cows the bank will not come take them back and you keep the intrest not the bank. If its worth doing its worth waiting for PAY CASH!!!!!. Now i am off my soap box. JMO oh ya i am a big dave ramsey fan.

[BaynSlay]

Just realize in the cattle business, you will always break even

[Tusk Hog]

  There are agricultural based credit unions who understand the cattle market much better than a bank. Most banks are getting real hard for the rancher to do business with. My home town bank who I dealt with for years was bought out a few years ago, quit them shortly after. In my opinion, the best way is to sell your calves and reinvest that money back into producing cows. Go slow so if conditions continue to get worse you won't lose it all. I have seen guys buy $1500 cows only to sell them a few months later for much less and still owe the bank a lot.

[dub]

Just realize in the cattle business, you will always break even

Really? I think you need a new accountant.

[halfbreed]

my views if you start a buissness on borrowed money  , you are not self employed you are still working for the man  . lol do like sam walton from wall-mart start small and build with the profits  . takes time but you own everything you get and all your inventory is your's and when hard times hit you don;t have to worry about looseing it all to pay back a loan . and the way banks work now they will sell your stuff to their buddies for nothing and send you the bill for the differance  lol

[SLacowboy]

Fsa is a pain in butt. Lots of paper work but worth it for interest  rate. And they work with you if you have problems. Last cows I bought payed 1100 for pair and avg $850 on calves.

[Silverton Boar Dogs]

FSA has very low intrest rates BUT.... the paper work is horendous.

You have got to really watch FSA, if you do what they say long enough they will bust you. They are not profit orented at all.

I have borrowed money from them, but I will not in the future.

pay cash, or get a good bank loan. I would want 30-50% equity in the cattle if I was going to borrow any money.

[jagdtank]

slowly and with cash or with borrowed money in an amount so small you can for sure pay it back even if the deal don't pan out. Debt for business scares the life out of me. I tired it and lost a profitable business and my house and everything literally except my wife and that was close. The lesson i learned was: low debt, controlled growth, and low overhead. You can never lose everything this way you just walk away.To quote dave ramsey. "Heres a get rich scheme for ya, get rich slow!" Cows especially I too have seen alot of people lose their pants with em. It hurts bad to screw up like that you go from hero to zero quick!

[SLacowboy]

I agree. The only plus is interest rates with fsa. It's hard to buy cattle to bc they have to appraise anything before you can purchase. Buying pairs worked out good for me. That way you know you have something you can sell to pay your note. You can also go 18 months before your first note. So by the time my first note was due I already had another calf crop on the ground and stay a year ahead. That being said I was fortunate that my dad was already in the cattle
Business. So I had everything I needed to start but the cattle.

[Eric]

If you save your pennies and pay cash for your cows the bank will not come take them back and you keep the intrest not the bank. If its worth doing its worth waiting for PAY CASH!!!!!. Now i am off my soap box. JMO oh ya i am a big dave ramsey fan.

Amen!

Plus they are probably going to want you to put up your land as collateral.... thats a big HELL NO!

[cward]

I have run my oppration on loans for years. It works great. I will talk to you about it over phone or text if you like. Most all cattle business are run off loans they work with you good and intrest is fair. my number is 281-659-5973

[Eric]

When you take on a loan you add more risk to an already marginal business. If every thing goes great you will never realize that risk. When it doesn't you add a giant PIA to an already bad situation.

Grow slow and steady. Start retaining heifers or earning and build as you go. Buy things with money you have... not what you are going to have. The worse thing you can do in the cattle business... or any business is speculate IMO. That carries the highest amount of risk there is.

[cward]

Thats why I said I will talk with you over the phone. This is what I do for a living!!!! If you are hobby farming then yes pay cash and play with your cows. If your want to grow into the cattle business well keeping heifers you ain't going to make it that way.  I can go buy a 5 year old cow 8 months breed for 1000 or you can keep a heifer that is wort 750 raise her and feed her for two years to get a baby. The cattle business is all about numbers forget the cow learn numbers. Or you can take a loan go buy you a 40000 tractor a 30000 dollar bailer and in 5 years not understand why you lost in the cattle business lol

[Hawkins]

This is a very broad question I know because lots of factors would play into this, like if you own the land or lease etc.. But how many head (cow/calf) would y'all think you would have to own to make a living out of it? Always wondered that.

[hank]

Thanks for all the input guys! I'll call you Cward

[hank]

I know its a broad question.
 Here is a little background on me and what I'm looking for. I have a full time job. I work a 24 on 48 off schedule, so I have time. The only thing I owe money on currently is my house, but there isn't much extra $'s laying around.
 So my bills are payed and I enjoy working with the cows. I don't have to make money the first couple yrs. If I can get a small herd started and pay the note off I would be happy. From that point forward I would think more along the lines of staying out of loans. I hate being in debt.
I don't have cows or grass, so I was hoping if I could get approved for a loan, I could find someone willing to sell me cows, and lease me pasture.

[Eric]

This is not a right or wrong. It's more of a hound vs cur. Both ways can get you to the end but you have to choose which road you want to travel. Under stand the pros and cons of both.

To say one way is hobby and one way is professional is just ego and ignorance taking over. There are multi- multi- million dollar corporations that operate debt free.