Cattle investment

Location
Devon
if you had 300kg heifers in at less than£700 would £300 finish them without taking cost for buildings and machinery into the equation ,so it would need to cover feed ,bedding, meds, water and losses

They would come back around £1150 on average currently.

How long would you be keeping them and on what system?

Don't forget you will have £45 head haulage and deductions at kill to add on.

Target should be to pay £1.70 head kilo for them store.
 
A certain amount of people on here don't understand my way of working and the breeds I have. I primarily focus on nett profit. I was in a similar position not been born on or handed down a farm. The normal way of farming selling produce to a large company with 3/4 others taking a cut is only achievable with subs. I wanted a system which did not rely on subs, easily ran with a quality end product with direct sales to the public. In my system I can make up to 50 percent more profit than others do by them giving third parties a cut of their hard work. I am not going to get in a breed debate as certain members on here get upset. My advice would be look at what everyone else is doing with their cattle in terms of end product and do something completely different.
 

Jon75

Member
Location
Derbyshire
Work on £1 head a day from buying them until 12 months old.

Good cont x calves will be between £260/350 head depending on trade, best time to buy them is the run upto xmas as many people don't want the work over that period.

Losses will depend on many factors, housing, stockmanship, type of calves you buy etc etc.

OK, Going forward I'm going to call my friend Bob, for ease. Bob's figured came out a little under £1 per day. This includes transportation to and from auction house and a contingency fee for vets fees.

Before we got into this he always maintained that his talents were with calves. Spotting and fixing issues quickly. Bob's expected loss figure is 3%. The calves we are buying in are three to four weeks old. We are deliberately avoiding any animals younger than this. He has a chap who attends auctions weekly buy for him. A number of farmers in his part of the world use him to source their stock. It took three weeks before the first animals arrived because he felt that animals in previous auctions didn't offer good value for money and we're in no real rush to buy. The first eight have averaged around £203 each so far.

@Jon75 If you have done your figures (and it sounds like you have) and you and your farmer friend both think it's a venture worth pursuing give it a go. Just start conservatively and if alls well build it from there.
Nothing ventured nothing gained.

Good luck(y)

Thanks

We are looking for around 20 to start things off. If in a years time this proves to be viable then we will increase numbers significantly. I even have two more cattle investment ideas I'd like to try if things go well.

To everyone else, thanks for the feedback. The idea started after I'd been reading about wagyu cattle and the insane prices for quality wagyu beef. I asked half jokingly, half wondering if there was any potential in it if we should start a wagyu herd? That idea went nowhere and it quickly became apparent that we need to focus on breeds that sell well in the farms area (he's a long way from me here in Derbyshire). So a quick look at local auction houses showed that BB and Lim x were the way to go. To be honest you probably didn't even need to know what a cow was to figure that out.

It's got me thinking though. It's important that brits support UK business. It pisses me off greatly when I see the likes of Tesco selling New Zealand lamb and even venison from half way round the world. Bank retail products offer a very poor return on savings accounts and ISA's these days. There's people looking to get a better return on their money and farms looking for investment. It strikes me as there being a lot of untapped potential really.
 
There's people looking to get a better return on their money and farms looking for investment. It strikes me as there being a lot of untapped potential really.

Somewhere there is a thread discussing peer to peer lending.

I did a simplified version of your plan about 12 years ago, just as a bit of fun.

I bought 2 black & white calves (for £50), then my FIL reared them, sold them as stores and we split the money in half. Luckily they both survived.
 

Jon75

Member
Location
Derbyshire
Somewhere there is a thread discussing peer to peer lending.

I did a simplified version of your plan about 12 years ago, just as a bit of fun.

I bought 2 black & white calves (for £50), then my FIL reared them, sold them as stores and we split the money in half. Luckily they both survived.

Peer to peer lending and crowd funding will become more popular and more important to all kinds of business start ups in the future in my humble opinion.

You mention your FIL. My MIL is forever moaning about the crappy interest rates offered by the banks and who can blame her. They worked hard all their life, paid off their mortgage, raised a couple of kids and are now looking to enjoy their retirement. You can't blame them for looking to get a fair return on the bit of cash they have banked.

I honestly believe there is potential here for others to invest in British farming and beat the banks and even do their bit for the UK economy. Whether the Brexit result was right or wrong, in my mind going forward Brits need to pay more attention to an essential industry like farming, but I'm sick to the back teeth of discussing Brexit so that's all I'll say on that matter!!! :)

Anyway, we'll let this experiment run it's course and then I can asses losses and actual sales results and see where we are. I need to ensure that he's bang on with his costs and has not solved himself short too. I'm a big believer that everyone should agree on and enjoy a fair slice of the pie. Get that right and set everyone's expectations and I think it will be ok. I can't help thinking there is opportunity to involve other small scale private investors though. At least those with a fair appetite for risk anyway.
 

Poorbuthappy

Member
Livestock Farmer
Location
Devon
Depends what you call calves of course, some call a 6 week old animal a calf.
I use to get them at about a week, cheap but a challenge.
I take your point.
The ones I bought were from a week to 6 weeks old, with the majority being 2-3 weeks old.
They'd have to be very cheap if you were expecting losses of 10% imo, and I'd want to be happy with colostrum intakes as I'd be concerned about ongoing health of the 90%
 
Location
Devon
OK, Going forward I'm going to call my friend Bob, for ease. Bob's figured came out a little under £1 per day. This includes transportation to and from auction house and a contingency fee for vets fees.

Before we got into this he always maintained that his talents were with calves. Spotting and fixing issues quickly. Bob's expected loss figure is 3%. The calves we are buying in are three to four weeks old. We are deliberately avoiding any animals younger than this. He has a chap who attends auctions weekly buy for him. A number of farmers in his part of the world use him to source their stock. It took three weeks before the first animals arrived because he felt that animals in previous auctions didn't offer good value for money and we're in no real rush to buy. The first eight have averaged around £203 each so far.



Thanks

We are looking for around 20 to start things off. If in a years time this proves to be viable then we will increase numbers significantly. I even have two more cattle investment ideas I'd like to try if things go well.

To everyone else, thanks for the feedback. The idea started after I'd been reading about wagyu cattle and the insane prices for quality wagyu beef. I asked half jokingly, half wondering if there was any potential in it if we should start a wagyu herd? That idea went nowhere and it quickly became apparent that we need to focus on breeds that sell well in the farms area (he's a long way from me here in Derbyshire). So a quick look at local auction houses showed that BB and Lim x were the way to go. To be honest you probably didn't even need to know what a cow was to figure that out.

It's got me thinking though. It's important that brits support UK business. It pisses me off greatly when I see the likes of Tesco selling New Zealand lamb and even venison from half way round the world. Bank retail products offer a very poor return on savings accounts and ISA's these days. There's people looking to get a better return on their money and farms looking for investment. It strikes me as there being a lot of untapped potential really.

What breed/sex calves are you buying for £203/head?
 

neilo

Member
Mixed Farmer
Location
Montgomeryshire
To everyone else, thanks for the feedback. The idea started after I'd been reading about wagyu cattle and the insane prices for quality wagyu beef. I asked half jokingly, half wondering if there was any potential in it if we should start a wagyu herd? That idea went nowhere and it quickly became apparent that we need to focus on breeds that sell well in the farms area (he's a long way from me here in Derbyshire). So a quick look at local auction houses showed that BB and Lim x were the way to go. To be honest you probably didn't even need to know what a cow was to figure that out.

Those cattle may make more at sale time, for the reasons you state, but that increased value is built into the calf as soon as it drops out of the cow. The highest sale prices don't necessarily equate to the highest margin for a rearer, with margins on rearing B&W calves (to finish) very often better than at the quality end of the market. Less capital is also tied up in the venture, so less risk.

Your friend Bob is doing VERY well to have an average price of £203 on beef X calves at 2-3 weeks old, especially if a dealer has had a cut first. They may well be 'improvers', but I'd be wary about colostrum intakes on those rougher types of calves, which is the key to low mortality and health issues. You will only need one calf coming in with Crypto, Rotovirus or BVD (for example), to blow margins out of the water. Of course, that's not to say taking those increased risks won't necessarily reap greater rewards.

Dunbia are doing a contract calf rearing scheme now, where the rearer follows a blueprint and the figures (on paper at least) look attractive. Some of the key points on enterprise performance appear to hinge on low health issues & mortality. Calves are all sourced directly (certainly not from the disease melting pot of a mart) and they come in and out in batches, with thorough cleaning and disinfecting between batches. That batch rearing followed by C&D seems to be common to most large scale calf rearing enterprises, as it is with pigs and poultry. That level of cleanliness and disease control would be very hard to achieve with dribs and drabs coming in, particularly from multiple sources of unknown, maybe dubious, health/colostrum status.

Good luck with your venture. It will be interesting to read updates as you proceed, if you are willing to post them.:)
 

neilo

Member
Mixed Farmer
Location
Montgomeryshire
Peer to peer lending and crowd funding will become more popular and more important to all kinds of business start ups in the future in my humble opinion.

You mention your FIL. My MIL is forever moaning about the crappy interest rates offered by the banks and who can blame her. They worked hard all their life, paid off their mortgage, raised a couple of kids and are now looking to enjoy their retirement. You can't blame them for looking to get a fair return on the bit of cash they have banked.

I honestly believe there is potential here for others to invest in British farming and beat the banks and even do their bit for the UK economy. Whether the Brexit result was right or wrong, in my mind going forward Brits need to pay more attention to an essential industry like farming, but I'm sick to the back teeth of discussing Brexit so that's all I'll say on that matter!!! :)

Anyway, we'll let this experiment run it's course and then I can asses losses and actual sales results and see where we are. I need to ensure that he's bang on with his costs and has not solved himself short too. I'm a big believer that everyone should agree on and enjoy a fair slice of the pie. Get that right and set everyone's expectations and I think it will be ok. I can't help thinking there is opportunity to involve other small scale private investors though. At least those with a fair appetite for risk anyway.

It should be remembered that those crappy interest rates offered by banks and ISA's, reflect the negligible risk of tieing money up in those investments. Return on any investment has always reflected the level of risk involved (Lloyds name anyone?). Farming livestock, and indeed arable to a lesser extent:whistle:, is full of risk. The return on a particular enterprise may be high occasionally, but it can equally be negative when those risks don't pay off.
 

Jon75

Member
Location
Derbyshire
Neilo, thanks for the reply. I do agree with what you are saying. I did spend a lot of time looking at realized prices before settling on the animals we have chosen. One surprising observation was to see how poorly some AA cattle did in Bob's particular part of the world. Speaking as a beef consumer I found this disappointing. I was almost tempted to buy one for the freezer! When I have more sales data other types of calves may be considered.

Speaking as a private investor I believe it's very important to have a balanced portfolio. So whilst this is a high risk enterprise I won't be remortgaging the house just yet to buy more cattle. I fully understand that I could make a loss.

I did 18 years for a well known global financial institution before going self employed in an animal (not domesticated farm stock) related business so have a fair understanding about the importance of quarantine, disease and mortality etc. And to be brutally honest I don't think I need to be an experienced farmhand to see where improvements could be made now. This will be addressed in the future if we do ramp up operations.

I will post updates in the future.

Maybe I'll start a second thread on another beef cattle investment idea I have too.
 

Jon75

Member
Location
Derbyshire
Well for those who were interested, the plan was to keep these for 12 months. Long story short is that the first batch were sold today. They cost £203 on average initially and went today for an average of £651 for the heifers. The bulls will sell in a few weeks. The investment return worked out at 17.83% for less than 9 months.

We experienced no losses, though I appreciate this may not always be the case. I have noticed that prices for weaned calves seems to have increased in recent weeks though.
 

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quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

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