The Cost of Ranching

The Cost of Ranching

Hi I’m Mike, today we take a look at the
actual numbers behind farming and ranching, the dollars and cents and not the common sense,
because after this, you might be wondering if I have any sense at all. Stick around on Our Wyoming Life. So, ranching is easy right? Basically, all you have to do is get some
cows, some land with grass on it and watch the cows grow and collect your paycheck. It sounds easy, but if it were really that
easy everyone would be doing it and driving Lamborghinis out to feed to cows. When it comes down to the cost of raising
cows, there are a bunch of different factors to take into consideration. You’ve got land, fencing, corrals, feed,
mineral, water, electricity, taxes, insurance and a whole mess of other costs. We are going to delve into all that as we
take a look at a pretend ranch here in Wyoming. You just bought it and its big enough to run
100 cows. Here in this part of Wyoming you need an average
of 30 acres per cow to support them, the grass they eat and the grazing area they need. So, your new ranch is 3000 acres, that you
purchased for 800$ per acre for a total of 2.4 million dollars. Congratulations, you are a Wyoming rancher. Let’s get to fencing this monster off, now
hopefully fences are already in place. That would be a good thing, because fencing
will cost you about 2$ per linear foot. Even if you have most of your fences in place
already, I’m going to say you are going to want to change things a bit and at least
put in a couple miles of fence to suit your needs. There goes another 20 grand, that includes
posts and fencing material. Now we have to put some cows on here, like
I said you have room for 100 cows, you are going to go out and buy bred cows, because
that is going to make your life easier and you will get a calf sooner and have an income
sooner. So, bred cows at this moment are selling for
about 1500$, you need 100 cows. $150,000. Let’s stop here, you have about 2.5 million
invested at this point. You’ve got cows, you’ve got fence and
you’ve got land. All this money has to come from somewhere,
so you have a very generous banker out there, who really believes in you and he is giving
you all the money you need. At let’s, be really generous and say 4%
percent interest. If you can get this loan for 30 years let’s
say, then your payment is 150,000$ per year. Are you starting to see the problem here? To make that loan payment, each of your cows’
calves have to sell for over 1500$ and that’s just to make your payment. Let’s change some things up. Let’s say your uncle left you the land and
the cows. Now you are starting at 0. There isn’t any operating capital to go
with it because most ranchers don’t carry a huge cash reserve. But you are very lucky to get what you have
and you are a Wyoming rancher again. Now we are back to the cows, they aren’t
an endless source of income and each cow is going to cost you in replacement costs and
death loss. When it is time to sell her, she is going
to bring less than half of what she is worth, so it’s a pretty conservative estimate to
say that each cow is going to cost you $100 per year in replacement cost. You have the cows, and now you have to feed
them. Here in this part of Wyoming we plan on feeding
hay for about 6 months out of the year. A cow will eat about a half of ton of hay
per month and in a year like this one you are going to have to buy hay at 180$ per ton. If we break this down by the cow, each cow
is going to eat 540$ worth of hay. Grass is cheaper, and worth about 20 per month
for the other 6 months of the year so that’s 120$ per year for grass for her. Its adding up pretty quick, we already have
760 dollars invested in this cow and she’s not even bred yet. So, we better get a bull in here. A good bull will cost you about 4000$, a good
bull will last about 6 years, so we have a yearly cost of him at 660 bucks and he will
breed about 20 cows, so 33 dollars per cow to own the bull, plus his feed which will
average about 30$ per cow. We are in another 63$ to get her bred. Now we are up to 823$ for this one cow. We get to throw in about 10$ per cow for vet
fees, we need her to pay her share of the tractor costs for feeding her which average
on the low side, 50$ per cow. Now if you want to get paid for your time,
which I’m guessing you do, lets give you 30,000 per year. That’s another 300$ per cow. Now this one cow is costing your ranch over
1100$ per year. Now this is a bad year, we didn’t put up
any hay of our own to feed the cows over the winter. Let’s pretend it’s a good year, and we
have lots of hay to harvest. Now we need a tractor and a baler and probably
a rake. The cost of putting up your own hay is maybe
90$ per ton. That brings the cost of this cow down to 830$
Keep in mind, these are the major expenses, we aren’t talking about taxes, utilities,
corrals, a truck and a stock trailer, a 40 thousand dollar used tractor, they all add
up as well. Let’s average a good a bad year and say
this cow costs the ranch 965$ a year. Now its time to look at the income. When we sell calves, we are hoping for a calf
that is around 600lbs. This year prices aren’t horrible and a 600lb
calf last week sold for 1.60 a pound. That’s an income of 960, not all of them
are going to weigh 600lbs so let’s average 900$ per calf and only 90% of cows will have
a calf all the way to sales time so brings us down to $810 income per cow. Then there’s the trucking of the calf and
the vaccinations we give them before they can be sold and now we are at 800$ of income
per head. So, in a good year and not including about
a million other little expenses this cow is costing you 30$ per year, in an average year
165$ and in a bad year $300. Take those numbers and multiply them by all
100 cows in your herd, and the numbers don’t add up. Did we screw up our math, no. These are the real costs. And now I’m going to tell you the secret
of ranching and ranchers. No rancher, recognizes all the true costs
of raising cattle. Each and everyone has some trick, or extra
cash flow or a way to ignore the inherent costs of ranching. Let’s start at the beginning, once again. Most ranchers have a herd that is bought and
paid for, they don’t account for the cost of cows. When ranchers put up their own hay, the equipment
and the land has been paid for, so you have the cost of fuel, and repairs. When it comes to labor costs, we take a huge
pay cut and look for ways to make up that loss somewhere else. Jobs in town, side jobs with friends, hunting
income, YouTube. A rancher ignores the value of his own cows,
the hay, the grass, and his time. If you get rid of all those costs, that’s
the money that is left. With that money, you can buy a new pickup,
every 10 years, or put up new corrals every 20. Keep in mind, every operation is different,
in some places land may be worth 10 times what it is here, and there they have a whole
new mess of problems. So, the question is, can it be done? Of course, it can, but it has to be done smartly. I’ve seen people inherent whole ranches
and couldn’t hold the operation together, but I’ve also seen people be successful
in what they do and love every minute of it. I think that’s the key, you need to love
it and have incentive to do it. Make a promise to yourself or someone else
that you will do everything you can to make every bit of your hard work, worth it. Speaking of hard work, I’m about ready to
head to work but I want to thank you for taking your time to hang out with me today. I know I threw a lot at you, but hopefully
it brings you closer, to us and to knowing why farming and ranching is important, another
reason we don’t want to lose even a single ranch or farm. In the US 40 acres of farm and ranch land
is lost every hour and once they are bulldozed and paved over they are gone forever. We are just trying to do our part. We all are and thanks for that also. Make sure you subscribe for more from the
ranch and exactly why through hard work great things can happen. Have a great week and thanks for joining us
in our Wyoming life.

100 thoughts on “The Cost of Ranching”

  1. I don't think you even came close to disclosing the misc costs of owning property, much less a ranch. I have a small piece of land with a few animals, and the math says that I'm a lunatic. Actually it says sell everything and live in a van, but like you, I'll keep doing it.

  2. Somehow you're making i5 and so are other that means there is a gainful living somewhere in the numbers

  3. I LOVE these videos and am so impressed with how well they are made and even more impressed how hard it is to be a farmer and rancher. Both need our help!!! Just gave my $1 a month to their Patheon account. Go to their website and click the star Patreon button in the upper right….$1 a month from all subscribers would really help our farmers and ranchers, and it is a small price to pay to be so educated, informed and entertained….thanks Mike….God Bless you, your family and your ranch!

  4. You forgot to mention the government subsidies. There are lots of programs. That's how farmers survive too.

  5. One is able to produce their own food, but many people forget that it takes a lot of work and the time you have to put in it. Growing, raising, slaughtering, harvesting, watering, seeding, planting, keeping the weeds under control, manuring, preparing, storing and…finally cooking.

  6. 30 acres/cow? What sort of cow it is? Worst case scenario you get 2 acres/cow. With a good pasture management you’ll get 400 cow-day/acre. Don’t pay for hay bales. Seed corn and winter graze stranding corn with controlled area use per time unit. Use electric fencing. Use line-breeding. You can’t increase the price of the beef. You can reduce your costs. Bob’s your uncle, Mary’s your aunt.

  7. I still would rather farm and ranch than call the man boss. Besides, I'm used to being poor and working in all weather conditions along with lots of blood and sweat.

  8. 30 acres per cow? Holy crap. Just kinda kills the dreams of someone that doesn’t have the land or much money to get started

  9. The way you explain ranching is amazing. Simple and to the point answering questions that pop up before I ask them.

  10. This is because all the ranchers don't stick together I claim this before I run a few head we give these cows away we take all the risk if they die we don't make nothing they get hurt we take care of them we sell cows for a little bit of nothing and then when you go to the market you see the money someone's making a ton of money on Rancher stop the stupid Ranchers need to get together and figure this out and we can all be prosperous

  11. 30 acres per cow? Holy shit, i didn't think it was that bad. Have you considered veganism? Dedicate a bit of your land to water capture, irrigate some to grow crops? Some greenhouses, a food forest. I'd come help set it up. We could have a bean-dairy pumping out 10,000 gallons an acre by next September

  12. And me, a Wyoming Vegetarian , not so much by choice, but by necessity. I cannot afford beef anymore.🤷‍♀️

  13. I once considered getting into cattle ranching. My idea was to rent land which is available in the this area. But the more I read about the investment vs. loss potential the more I realized I was way better off just investing my money in the market! I think a lot of farmers/ranchers have an even money chance of just staying even! Win a year, lose a year, etc. But if it's in your blood you gotta do it. Either way they all have my respect.

  14. Saw this video twice. To be successful we need to calculate costs when we can but, if it takes something, is to jump into it without thinking it and don't quit no matter what and do just our very best. Then ignore all or all the costs, earn the minimum or nothing, establish a name for yourself and giving more that we receive and with time the business will pay back. It takes our life especially when we are the beginners or second business generation but that's the other thing, no matter where in the creating a generational business we are we better consider just that, tie make it generational so our children don't have much of our struggles although our struggles made us the way we are so, share some of your misery so they learn a much as we can to be the best like us, so they be able to be as happy and successful as we are!!! Thank you Mike! And, buy as cheap as you can all you can.

  15. Tax advantages go the farmer buy heifers breed and cheap equipment. Stay away from FSA loans. Buy land on foreclosure many going out of business every day. Cattle prices are down do to foreign beef thank you President Trump.

  16. My grandparents are in the Rice business in NorCal and it blows me away that they have to pay for water. They make a product people need, plus they can collect rainwater because of state laws.

    Ranchers should be given better breaks from our shitty gov.

  17. Great video…My Grandpa was a dairyman with 200 head in Alaska, I wonder how many acres per cow he worked to keep the milk flowing? He started as a cowboy in old Mexico where he dropped out of school, never finished 3rd grade, (to support his Mom and Sisters). I don't think I ever saw him without his Stetson hat atop his "skinny as a rail, tough as nails" frame.

  18. 30 acres per cow! Can't the grass lands be improved giving you a better return on hay and grass? What would that look like? Love the channel!

  19. R u trying to give me angina. I have a bad heart and after watching your cost video needed my Nitro tab…..Dr. Hussain

  20. Being a Rancher is not easy and its a 24 hour a day Job a lots of hard work Ranchers and Crop Farmers work Very hard

  21. When you quoted the cost for the land, all I could think of was John Goodman's statement in The Gambler that starts with… "You get up two and a half million dollars…"
    The rest is easy to Google… But let's just say that buying a ranch is not part of the rest of the saying.

  22. All i ever dreamed of, is to work there in your ranch sir…love cows and agriculture..after watching this video, realizing the huge amount needed for someone to have a ranch in US…well, ill just better be part of being a worker there someday…hope so…thanks for your vido sir

  23. Lmao you have to be extremely rich just to be a cowboy or rancher what a joke
    When in the old west every cowboy and rancher was poor and broke

  24. I get my grass fed beef from up that way. It's a couple of farms that I guess they tell what's available and you order from them. So far we've noticed the taste to be excellent, packed really well and delivered in great time. I'm in Florida.

  25. 1. Farmers shouldn't have to pay taxes. Without farmers there is no United States

    2. John Deere needs to embrace Right to repair and allow farmers to fix their own equipment without having to rely on the dealership to activate parts.

  26. Hi I'm from Indonesia got online bussines but plann to have my own ranch, 70 percent of meat in Indonesia is coming from import, i see opportunities on ranching, but it's totally different here than the US, but hey thanks for the video and God bless to ya all 🙏

  27. Great informative video. My inner businessman wonders why you wouldn't sell the land you inherited from you uncle, invest it and then volunteer as a ranch hand if you enjoy the lifestyle. Given the difficulty of making a return off the land what is keeping the price so high?

  28. Every farmer I know here in Indiana makes no money, the crop is always terrible, and the price of grain is always too low. Except they all drive around brand new trucks, build massive new houses, and are worth a couple million.

    Save the pity party for someone who cares.
    I’m totally intrigued by your channel and I think you do a great job. But at the end of your life, you’re still a multi-millionaire which is awesome but I’m not going to feel sorry for you.

  29. You said there may be land that is worth 10x what yours is that is the case in Ireland good land is worth 10-13kacre

  30. I've never known a farmer who didn't have to hold down at least one outside job. And farm wives had to work a job outside the home even before that was commonplace. Plus all the farm chores. It's not in any way romantic.

  31. If I had 2.4 million, if just not work…

    And if I owned 3000 acres, I'd sell it at $800 an acre, and retire with $2.4 million.

    When the old man died, I would have put the ranch up for sale… And I'd be somewhere it doesn't snow… Fishing.

  32. Most people do not buy 100 cows all at once. There are efficiencies at working at home and offsetting cost of groceries butchering your own beef. Also don’t forget economies of scale which kick in at some point and this is something that is different all over the country and world.I think most people that start out start slow go slow at first they buy for their own needs and they build there heard one head at a time. I think key is to not have a banker do it without the use of credit like starting a business the old fashion way. Find ways to pick up land cheap which is key I think it all starts with your ability to save And your ability to earn income away from the ranch or farm. I heard a story about a doctor during the great depression building a extremely sizable heard during the great depression and accumulated a lot of land and Starvalley Wyoming. I think the key factor in that story was that he was a doctor and doctors are always in demand even during the Great Depression. He was able to buy up land even cheaper because everyone else was loosing their ranch. One could see ranching more as a synergistic effect on the income that you already have. For example if you’re an accountant as competitive as our society is can only make so much but through ranching you can put yourself in a higher income level in comparison to all the other accounts in town that do not ranch. It’s using the benefits it here in the land to make your life better.

  33. Hello from your neighbor in Idaho! I don't have thousands of acres, only 10 …. I am needing to put up fence to keep in 2 cows… I need to do this on a budget… what are my best options??? I am trying to figure out the ideal distance between t-posts and the length of t-posts… SUPER rocky soil and pounding manually… also the ideal solar panel run for high tensile wire… Thank you!!!

  34. Google is pushing the Amund Bundy – Anti-White story. Please remember, united we stand- divided we fall. Never fight for the wrong.

  35. Forgive my ignorance in this, but I have looked at a farm in Georgia with 500 cows. The total acreage is 3,742. Fortunately there is a manager there whose family tends to the cows. So how often would a cow have a baby?

  36. 30K a year for all that work 😱😢 government absolutely must ease on ranchers 😔😤 if we don't wanna end up with Chinese cow meats probably all toxic !!!!!!!!!!

  37. 30 years ago we had a 50 acre chicken egg ranch. it got to the point from feed and other costs that it was cheaper to buy the eggs. what's the customer gonna say when you're 0.30 more a dozen.?? that's another reason why were losing so many farms. plus the generation coming up cannot work, its physically impossible for them to, something in their genes tells them they will die if they sweat

  38. I'm bankrupt selling all beef cattle today for basically nothing,
    ranching you have to pay to work instead of getting paid to work and in fifteen years has coated me over 1,500,000 with a return of less than 10 percent of that in all these years. wondering why Farmers and rancher's have the biggest suicide rates!

  39. Wow! Rough and tough life farmers and ranchers have to go thru ! One more thing you didn't count …… Disease and natural disasters…..tonado, drought, locus, sand storm…..not worth having ranch ? Good luck !,

  40. Love the vids me and my wife live in Texas an we are trying to buy a ranch here , I’m 25 years old an I Ben welding for 5 years my dream is to raise cattle , this vid helped me out a lot thank you !!

  41. Really, $800 an acre for land you can't grow crops on and it will only carry 1/30 of a cow? I think this starts with the assumption of being a damn fool.

  42. Is it feasible to be a rancher if you aren’t inheriting a ranch? How did you step from the music industry into ranching?

  43. Mike you have said on different video that you left the corporate world for the WY ranching life with the family! How did you walk in to this WY ranching lifestyle as it sounds quite an expensive proposition etc. I am not noise of your finances etc. I am just wondering of your drive in this life changing transition etc. In a way I envy you as I love WY and what has to offer!

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