So... just what is a decent price for a critter??

[justintime]

In another thread on SP, a few days ago, I mentioned that we had taken 14 calves to Denver in 1984 and displayed them in front of the Exchange Building in the yards. We sold 12 of them for an average of $3200. This got me to thinking about what this would be equivalent to in today's dollars. I Googled " inflation calculators" and plugged the numbers into the formula. It told me that $3200 in 1984 would be similar to averaging $6237 today. In a production sale in 1986, we sold a heifer for $5000 and this would be the same to getting $8636 today. In 2001 I averaged $1.32 / lb for my commercial steers sold at the auction mart. That would be the same as averaging $1.56 / lb today.

So what does this tell me?  It says that some of today's prices are not as good as we sometimes think they are. I know of breeders who sell their bulls out of their yard for the same price they did 15 years ago. Then they grumble that their cattle aren't making money. Seems to me that the problem may be with the owner more than it is the cattle.

Mentioning the Denver trip in 84 brought back some memories. We made the trip to Denver with 3 trucks, 2 stock trailers and a crew of 5 or 6 guys. We were almost 2 weeks from when we left home until we returned. In those days, I carried 1 credit card, and there was no such thing as a debit card. After feeding a crew, paying for rooms, gas and nightly entertainment, by the time we were ready to head for home, my one and only credit card was pretty well maxed out. I had about $400 in Canadian funds in my wallet, and I was carrying over $38,000 in US checks from the cattle we had sold, so I wasn't very concerned. The day before we were to head home, I headed out to cash one of the checks or exchange some of the Canadian money.I went from bank to bank to bank to bank... and the answer was always the same. None of them would exchange the Canadian money to US funds, and none of them would cash a check unless the person who had written it had an account in that  bank. The largest check was from a man who was a Senator from Colorado. That didn't even help. By this time I was really starting to get concerned as to how I was going to get the 3 trucks, and all the crew back to Canada. I had enough US cash left to fill the 3 trucks with fuel, but I was not sure how we would fill the next time we needed to fuel. I had enough room on my credit card to pay for the rooms.... but we still had to eat something. As we headed to fill the trucks with fuel, I noticed a Burger King was having a 1 cent sale, that is, buy one burger get a second one for 1 cent. I told my crew that they better fill up there as it may be the last food they saw until they got back to Canada. If memory serves me right, I think I had $4.00 US left when we headed for Canada. I had no idea how we were going to get home. Somewhere in Wyoming, we pulled into a gas station. I went in and told my story to the owner and almost begged him to accept some of my Canadian funds. He finally agreed to do this. I thanked him a few hundred times and we headed out again. We made it into southern North Dakota before we needed more fuel, and again we were able to convince the guy at the service station to take Canadian funds. I think seeing the Canadian customs on that trip was one of the best feelings I had had  in a very long time in my life up to that point.

As usual... I have got way off my original topic... so back to my original question which is... just what do you consider to be a good price to get for an animal today, and is that price a different amount that you would have considered to be a good price, even 5 years ago?

 

[jason]

That is a great story.  Boy, how times have changed, I think I read where most consumers carry an average of 5 credit cards.  Secured and unsecured credit became way too easy to get and helped put us in this mess.

 

[jason]

Also, I have watched people pay for very large sums of cattle at a sale barn on credit card.  :  I guess if you have the cash to cover it, but it seems like a risky proposition if get into any trouble.

 

[justintime]

Again, I am heading off topic, but a neighbor of mine builds movable living quarters and office trailers, most of which are priced from $87,000 to $ 120,000. They are almost luxury apartments that are used by guys who work in the oil fields and spend most of the year moving from one drilling site to another. My neighbor tells me that most are sold from pictures he has posted on the internet, and almost all of them are paid for by credit card when they are ready for shipment. I can hardly imagine putting a $100,000 + purchase on a credit card, and I have to wonder what kind of limit do these guys have on their cards?  I am also amazed by how many people buy new cars and trucks on their credit cards, and then finance them, at their bank, just before the 30 days are up, so that they save a month in interest. I am obviously in the wrong business!
I will also agree that credit is much too easy to get today, and it has put many in dire straits.

 

[BadgerFan]

$100,000 on a credit card...bad idea in my book, but I guess you could rack up a ton of flyer miles or Cabela's bucks that way!

 

[DLD]

Great story, Justintime.

My family raised Polled Herefords when I was growing up.  Back in the 70's, the state association had an annual consignment sale, and there were even district associations (ours was the southwest Oklahoma one) with annual sales as well.  My brother often recalls that in 1974, he took 5 bulls to this consignment sale and averaged $1500 on them.  He says it was good, a little above the sale average, but not a runaway either.  He took the $7500 (less comission, of course), paid off a bank loan, bought a brand new (and pretty nice for the time) 3/4 ton Ford pickup (for $4000) and still had over $1000 left in the bank.  According to the inflation calculator I found, that $1500 from 1974 should be $6582.05 today... if those sales even existed anymore, my guess is those same caliber bulls going to the same kind of homes might bring $2500 - $3000 - and we'd be just as happy as we were with the $1500 then.  According to the same calculator, the $4000 F250 should cost $17,552.13 - according to build and price on Ford trucks web site, msrp on a basic two wheel drive F250 with a big gas engine and an automatic transmission and no other options is $27,650... (I know you can buy it cheaper than that, but not likely $10K cheaper).

When I first bought my black cows (1994), I was averaging over $1000 a year on my entire calf crops out of 20 cows.  That's not selling anything over $2000, and only a couple over $1500... $1000 to $1500 calves were a good solid thing back then - most anybody looking for a show calf was willing to spend that, and it was the pretty typical price in that day (around here anyway).  Nowadays the $1500 one is a dinosaur - most "serious" buyers expect to pay more, and the "bargain hunters" want to buy 'em for $1000 or less.  It may not be much to alot of people, but I'd be pretty happy to be averaging over $1000 on an entire calf crop (within 45 days of weaning) again.

 

[jlingle]

Probably most of those $100K purchases on a credit card are going to companies with names like "Halliburton" on their cards.  I seriously doubt they'd see the sort of troubles most of us are accustomed to with the cards.  When I first got out of college, I worked at a cellphone place & we sold about 60 cellphones to Halliburton.  Their monthly bills would sometimes run into the tens of thousands & it was always paid by credit card. 

 

[Bawndoh]

I would say that if you know you can pay off that $100,000 credit card soon, it is not so bad.  Smart way to rack up some airmiles, like others said.  I know that the Royal Bank has a business credit card that has a $1,000,000 limit.  Crazy! 
We have to remember where our priorities have gone since the seventies or eighties, and why vehicles, and other miscellaneous things are priced the way they are.  Newer vehicles have air bags, GPS, special wiper blades, bluetooth, push button this and that, etc., etc.  The vehicles back then did not.  Although, yes, they were built MUCH tougher IMO!  I don't think the cattle industry is as exciting, booming, or new as it was back then.  Many breeds were brand new to our countries, and the demand was much stronger.  People would pay something for nothing.  Now, our priorities have changed, money/funds go towards other things, and there is often less left over in the end.  We have more gadgets, higher power and heating/cooling bills, cell phone bills, internet bills, higher fuel costs.  We often have multiple computers, televisions, GPS, cell phones, cameras, DVD players, video game players, video games, surround systems, and on and on.  I think that priorities have changed, technology has become more apparent and important, and cattle have been left in the dust.

 

[oakbar]

I have a large customer who owns several turkey farms and a couple of feed mills.    He has a Northwest Airlines credit card that he uses for all his business purchases(it may be Delta now)---I mean everything that he can.  He actually uses it kind of like an accounting system and I believe he gets a certain percentage back for all his purchases.  I'm sure he has financing at a bank as well and just pays it off each month from his credit line there.  He told me that a nice side benefit is that he uses all the frequent flyer points as rewards for his family and employees.  He's a very astute businessman so I'm pretty sure it's probably making money for him or he wouldn't do it!!

 

[justintime]

I have a large customer who owns several turkey farms and a couple of feed mills.    He has a Northwest Airlines credit card that he uses for all his business purchases(it may be Delta now)---I mean everything that he can.   He actually uses it kind of like an accounting system and I believe he gets a certain percentage back for all his purchases.  I'm sure he has financing at a bank as well and just pays it off each month from his credit line there.   He told me that a nice side benefit is that he uses all the frequent flyer points as rewards for his family and employees.   He's a very astute businessman so I'm pretty sure it's probably making money for him or he wouldn't do it!!

That is exactly what a neighbor of mine did with his input costs, chemical, fertilizer, fuel etc. He pays all his expenses with his Mastercard and then used his line of credit at the bank to pay down his credit card on a monthly basis. They then use the airmiles accumulated for their personal travel. Four years ago, they went to Australia for 10 weeks with the airfare, car rental and all hotel costs paid for from the airmiles they had accumulated. They take a major trip every two years from their airmiles, and have seen much of the world now. A nice perk for normal farm expenses!

 

[DLD]

No fancy shmancy stuff on that new $27K truck, Bawndoh.  Airbags yes, but that price gets you no power windows or door locks or mirrors or seats, not even tilt and cruise or a CD player, much less GPS or Bluetooth.  Matter of fact that doesn't even get you the cloth seat or the two tone paint job and chrome trim the '74 had...  But you are right about the technology - just the emissions control stuff alone costs a bundle, and we're paying for the cost of all the research and development behind it all. Still though, you can bet the farm that the paycheck of the folks that build that truck have come a whole lot closer to keeping up with inflation than the price of the cattle the farmer sells to pay for it. 

 

[GoWyo]

Well -- you can still buy that 1974 $4000 F250 for about $4000 for if it's in real good shape and is a 4x4.

 

[Jenny]

I pay for everything I can with my Discover Card.  I get from from 1% to 5% back on everything....cash refund. 
The thing you HAVE to do is to pay it up full each month or you are not gaining anything if you have to pay their high interest rate.  Also have never, ever gotten cash out of an ATM machine; will not pay the fee for that.

 

[JSchroeder]

With a decent rewards prorgram, if you have any large monthly expenses that allow you to pay with credit card and you pay them off at the end of the month, it's almost crazy not to use them.