Beef or Bull?

[DrRod]

I've heard that there are certain tax advantages in the ag business, depreciation, operating expences to name a few. Plus getting paid for fallow fields and so on.

Sort of. Depreciation helps you get some of your invested money back but you still had to spend the money in the first place. And after a time [like 20 years] you are done with depreciation so that goes away. As for payment for fallow fields, conservation grants, fencing allowances to keep cattle out of streams, et al -- these are complicated programs that essentially make the government your partner. You sort of end up farming with the government and managing your operation to meet their specs. I found this inherently undesirable. Also, I looked into a bunch of agricultural grant programs over the years for things like planting trees or protecting erosion and despite all the talk in the magazines and all the info on their websites, they never seemed to have any money. Congress never appropriated much money and so the programs never reached anything near the advertised potential. In sum, the government makes a poor partner.

 

[Turbys_1700]

In NC you can reduce your property tax for farm use if you have over 10 acres. Last year the program changed. It is now administered through the Forestry Division and requires cutting your mature timber in 5 years. I think the cost was $150 or so. The tax is reduced from assessed value to a percentage of the assessed value. It is a substantial savings. I hope that they keep those tax breaks for larger land owners who farm. If not it's gonna be difficult to pay the tax on several hundreds of acres. This program is just one of many available for farmers. I am certainly no expert but many farmers from time to time were paid money to leave their land fallow. I guess it was supporting crop prices.

 

[DrRod]

Just noticed that this was Mother Earth News. I used to subscribe and even have the original Have More plan from the Nearings. They are consistently overly optimistic and chipper about agricultural enterprises. Looking through the rosiest of glasses, all you need to do is put a seed in the ground, sit back and watch the customers come running to buy. In the case of livestock, they way underestimate the cost of medicines, vaccines, and vets. Can a cow remain reliably fertile for 12 years? What about the cost of fencing? And don't you need some machinery to mow these pastures periodically? And did they mention that you need a place to live [preferably on the property] to do this right? Rose colored glasses indeed.

 

[smstonypoint]

Several of the land-grant universities have developed educational programs dealing with small-scale and part-time farming enterprises. The Ag Alternatives program at Penn State (Ag Alternatives — Penn State Extension) is an example. The information from the land-grants should be free of the puffery found in Mother Earth News and similar publications.

Steve

 

[farmer2009]

Those are the rosiest glasses I've ever seen. Must have been written a couple years back when anything that could walk was worth $2/lb. Problem is now live cattle (slaughter ready) is about $1.14/lb and feeders (this years weaned calves) are about $1.45/lb.

They don't list all the cost involved with raising livestock. They don't count feed or fertilizer and even is very good soils with adequate water a cow per acre is a joke. Here our stocking rate is about 3 acres per cow/calf pair. That's good soil fertility too. Go out west into dryer areas of range land and you can see 20-50 acres per cow/calf pair. Actual production cost are in the $.90-1.20/pound range currently for feeders. Cull cows are worth about $.70-1.00.