Soapweed's Ranch Ramblings
The writings of a Nebraska Sandhills cattle rancher!

The Cow Sale
May 20, 2005

Well, we didn't exactly hit a "home run" with the sale of our cows, but did make it past second base. They are all now in the pastures of their new owners. A buyer from Kansas ended up getting forty steer calves and their mothers, for the price of $1650 per pair. A more local buyer from southern South Dakota bought forty heifer calves with their mothers, and the remaining fifteen steer calves with their mothers, at a price of $1575 per pair on the fifty-five pairs. He also purchased the remaining six pairs of heifers and their mothers for $1550 per pair. Altogether, the cattle averaged $1603 per pair and selling expense ate up over forty dollars per pair, which made take home pay of $1560 per pair. Couldda' been better, but couldda' been worse.

There are a few advantages to selling now. For one thing, taxes will hit less hard at this point. On a cow-calf pair, the value of the calf can be plugged into the equation at a more minimal level than if they were sold at weaning time separately from their mother. On the value of the cow, capital gains taxes are figured at the rate of 15% federal, and 7% to the state of Nebraska, totalling 22%. Total taxes on the value of the calf is figured on the basis of earned income, with self-employment taxes also, which could be a tax burden of 40% on the value of the calf.

Another advantage is that the summer grass bill is saved, and also the money can go to work almost six months quicker than if the pairs were split and sold in the fall. At this point, all the calves are present and accounted for, and sold accordingly. Also, the expense and hassle of giving pre-conditioning shots has been eliminated on the 101 calves already sold. Guess a bird in the hand is worth two in the bush.

I am all in favor of opening the Canadian border, but it is nice to get one more bunch of cattle turned into "money in the bank" before this happens and possibly slightly rocks the boat.







Copyright © 2005 Steve Moreland
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