Investing for the future.

[Andrew1983]

How do others decide when to invest?

Currently running 160 sucklers, selling most calves as yearlings. Run between 3 farm steadings and 2 other farms with no buildings. Other than one new 120x50 shed we built in 2012. An 80x40 I modified 2 years ago to increase ventilation and ease feeding. The rest of the buildings are all old tin sheds or 60s built cattle court with very poor ventilation.

Also a challow timber cubicle shed built in the 90s. It's only 9ft to the eaves has 8ft doorways and is generally just a pain in the ass. The box profile roof is rotting as are the cubicles and doors. Since I have been here I think we have averaged a cow a winter doing the splits in it. We have lost a few calves to pneumonia and scours. Not just in the cubicle shed but also a couple of the others are also poor. Place is a muddy hole too with very little concrete outside buildings, cosmetic maybe but it still pisses me off that everything is manky all the time and we are in wellys and waterproofs about 9 months of the year.

600acres owned farm, 200grain rest down to grass. Could keep more cows and want to increase output to justify wages for staff. But buildings are at capacity now. The shed built in 2012 was paid out right with no finance. We bought a bit of land last year which has cleared out any surplus cash. It doesn't look like there is going to be much surplus this year for us anyway.

I'd like to get up to either 200 cows and finish most progeny or go to 250plus cows and sell weaned calves.

So I am trying to decide what to do for best, borrow a chunk of money when rates are low and good prices are going on sheds, put up a decent steading where I live. Or wait a few years and see how things go.

Anyone else brave enough to invest borrowed money in sucklers just now? I'm in partnership with father in law, he will be of the no spending persuasion, I haven't brought the subject up yet...

 

[Thick Farmer]

Sack the staff and then figure out how to make just as much money doing the work yourself or using contractors.

Use the existing sheds to perform within their capabilities so don't overstock if it's causing illness or death.

Look at some other ways of generating income - don't put all your eggs in one basket with sucklers.

Good luck!

 

[Andrew1983]

Don't really want to do without the staff, currently 1 full and 1 part time, I like being able to leave the place knowing stock will be looked after. We have to walk stock between farms, that takes plenty bodies which are hard to find,

Also provide labour in turn for machinery from my father and brothers farm, as well as supplying machinery to their contracting business when they are busy.

Only job we take a contractor in for is chopping silage. We also have 1000s of meters needing refenced and I'd like to get plenty concrete down too. All things that I would never get done on my own.

Don't get me wrong I know fine I could make a very easy life by cutting cows down to 100 or less, pay a contractor for stubble to stubble, pick up phone when dung needs emptying or silage needs doing. Just not me though, maybe I need to change!

Also have 40 pure texels breeding shearlings and we buy and finish 700 store lambs a year. So currently there is always plenty to do. Just feel if the buildings were better set out we could be carrying a lot more stock with no extra labour or machinery.

 

[Formatted]

Just feel if the buildings were better set out we could be carrying a lot more stock with no extra labour or machinery.

So is your questions how do I make more money from my farm or how do I afford new buildings?

If you want new buildings if you own 600 acres surely you can extend mortgage and improve quality of the farm. Sensible idea as money is cheap to borrow.

Agree though that I wouldn't want all my eggs in red meat market. Get some layers.

 

[tanker]

So I am trying to decide what to do for best, borrow a chunk of money when rates are low and good prices are going on sheds, put up a decent steading where I live. Or wait a few years and see how things go.

Always a dilemma,if your gut feeling is you're in for the long term then the best time to start making life easier is today,it'll probably never be as cheap to do since prices inflate,&obviously paid for sooner and you'll be happier with things sooner too.However if as in the dairy world things crash whilst you're doing it and still paying for it things can get very sticky.
There's usually a compromise where you have to prioritise what really has to be done and what you can live with for a bit longer though I'm a big advocate of 'future proofing' whatever you do so it's still fit for anything you need for many years..

 

[bigw]

Building are not dear really when you compare them to a new tractor/machinery especially if you need them. The last ones we have done here we have hired a guy in to work with us who knows what he doing and we help with the donkey work. Buildings aren't difficult but getting everything set off correctly is crucial.

 

[GTB]

My take on it for what it's worth....

It sounds like you need the staff to run the farm efficiently so it would make sense to me to increase cow numbers or more sheep?

Buildings are a sound investment and will not only reduce the time spent on cattle duties in the winter but will improve cattle health too.

I'd go for it. Money has never been so cheap and we all need to be moving forwards. Standing still is going backwards in reality.

 

[Walterp]

I'm genuinely surprised by the advice proffered.

My answer to the OP is that borrowing money to 'invest in sucklers' is a rash idea. As HSBC was fond of saying, years ago, 'if you want to invest in beef production, do it with your own money - 'cos you can't afford ours'. Which about sums it up, really.

Put another way, if the retained profits from a large herd like this are insufficient to pay outright for what you need and want, then you can't justify it.

That's not to say that erecting a new outfit may not be a good idea, just that if borrowing money to do it is the answer, then you're asking yourself the wrong question.

 

[Hilly]

I would say your over staffed for starters, get rid of full timer then put up biggest roof you can afford as high as you can, divide it up on the cheap to start with finish it over a period of years, walls gates floor will cost more than the roof.

 

[Dave6170]

I have friends and neighbours, they probably lurk on here, running more stock than you have with less staff. Some have let staff go and others haven't replaced retired hands

 

[Dave6170]

I'm in a similar position currently as well. We need to spend a bit on the steading on the farm we bought but I'm hesitating a bit, whereas dad is all go!

 

[Happy]

I'm genuinely surprised by the advice proffered.

My answer to the OP is that borrowing money to 'invest in sucklers' is a rash idea. As HSBC was fond of saying, years ago, 'if you want to invest in beef production, do it with your own money - 'cos you can't afford ours'. Which about sums it up, really.

Put another way, if the retained profits from a large herd like this are insufficient to pay outright for what you need and want, then you can't justify it.

That's not to say that erecting a new outfit may not be a good idea, just that if borrowing money to do it is the answer, then you're asking yourself the wrong question.

Did you miss the bit where he said he paid a shed outright in 2012 and bought more land last year?

Seems to me he is well enough placed to be thinking along the lines he is.
As for being over staffed @Hilly. Perhaps on paper but a good man you can rely on to work with stock and look after the place without worry should you be away is worth his weight in gold. Getting rid of someone like that would be extremely foolish and possibly be far more of a risk to the business than a loan for a shed at current interest rates.
Ready made replacements like that are certainly hard come by and should the part timer ever hand in notice or other circumstances change @Andrew1983 would be faced with much bigger problems than he feels he's got right now.

 

[Andrew1983]

I would say your over staffed for starters, get rid of full timer then put up biggest roof you can afford as high as you can, divide it up on the cheap to start with finish it over a period of years, walls gates floor will cost more than the roof.

Staff here to stay as long as I can pay them, both young but they are top lads so I want to grow the business around them. Admittedly 2 is a luxury I would not have had we a rent to pay. But I am playing catch up on the infrastructure that's about 20 years behind where I would like it to be. So I'm prepared to be overkill on staff at least until we get caught up.

I like the idea of a big roof, we could do side sheeting and floor and everything else in time ourselves.

 

[Chimera]

For sure I don't think that slashing the staff and being a solitary hero is the way forward! As I stated on the 'who feeds when you're sick' thread, you can never take excellent staff for granted. If you're on your own then your options are limited. It's all well saying the neighbours will help, but what if your missing for 3 months like I was last year. Certainly if I was the OP I would look the maybe increase numbers to justify the spend maybe sheep to come in after finishing cattle.
After building a new shed I guarantee the OP would say 2 things:

"Wish we'd done it years ago"

And

"Should have made it 2 bays longer"

 

[Walterp]

Did you miss the bit where he said he paid a shed outright in 2012 and bought more land last year?

Seems to me he is well enough placed to be thinking along the lines he is.
As for being over staffed @Hilly. Perhaps on paper but a good man you can rely on to work with stock and look after the place without worry should you be away is worth his weight in gold. Getting rid of someone like that would be extremely foolish and possibly be far more of a risk to the business than a loan for a shed at current interest rates.
Ready made replacements like that are certainly hard come by and should the part timer ever hand in notice or other circumstances change @Andrew1983 would be faced with much bigger problems than he feels he's got right now.

No one has the relevant financial details, so that it's impossible for anyone to assert what you advance, with any confidence.

What we can all see, however, is that the world is being gripped in a deflationary process that no one, apart from a few perennial doom-mongers, have foreseen - a straw in the wind, perhaps, for the time when Scotch beef may lose most of its premium, as demand falls away.

On my side, I've seen instances where beef producers have borrowed to finance capital works that ought to have been self-funded, and the outcomes were always poor. That's because the financial returns just weren't there.

Does anyone honestly think that the financial returns of beef farming are going to improve from here on?

 

[Forever Fendt]

200' x 70' with a 6' canopy both sides wall down the middle, 15' high to eaves make your life a lot easier

 

[Newby]

200' x 70' with a 6' canopy both sides wall down the middle 15' high make your life a lot easier

Why the big wall down the middle?

 

[scrubbuster]

I'm in a similar position currently as well. We need to spend a bit on the steading on the farm we bought but I'm hesitating a bit, whereas dad is all go!

It's unusual to be that way round!

 

[exmoor dave]

It's unusual to be that way round!

Funny enough my old man is super keen to spend on our yard on the owned farm this coming year.

It doesn't happen very often!

 

[Kevtherev]

Lots of farms not going to spend this year so they say!
I bet they will.........