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What does it mean to be a rancher?

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allnicksaregone
3/14/2016 08:23 EST

Ive read a bit about living an independent live in Uruguay lately and it looks tempting. So i would like to know more.

If somebody wants to set up a cattle farm big enough to generate an income of about 80-100.000 $ a year what kind of investment we would talk about approximately? The
place needs to be far away from the next big city or any border lines, have an abundance of clean water and should be suitable for cattles with a little bit
of land suitable for farming.

When you are doing extensive cattle farming like it is done traditionally in Uruguay how labor intensive is it? Ive read somewhere that you just have to repair your
fences, sometimes shoot a cattle thieve and once a year you sell some animals to get money. It cant be that simple?

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gbowwii
3/17/2016 09:30 EST

Since no one else has responded, here are some rough research I did in 2014 and so it may be out of date and ill-considered besides.

A lesser-Coneat-rated chacra with a herd of 300 cattle which would provide an after-tax monthly income of $6667 ($80k/year). But I did not take into account hiring the local staff to manage the herd and so really need more land and larger herd--and the real gringo risk of labor trouble: lawsuit, double-paying staff after losing the suit. A 150 hectare chacra might cost between $500,000-750,000 (I can't find the cost of buying the initial herd or equipment). If one could delegate this to local management (like crops farmland) then that cost would decrease the labor trouble aspect and 'pay for itself'.

Not that you asked, but Farmland is less productive now that soy and corn prices have fallen. So these calculations may not be up to date. Assuming you hire outside managers and buy land in Colonia, one might get a net annual return of between 3-6% isn't very good in itself but better than bank interest and *may* be more reliable than stocks. Two other things should be considered: food income may increase faster than the rate of inflation and the ultimate rate of return may be much higher if the farm can be sold at a greater appreciation than inflation. To make $80k @ 3-6% would require $1.33-2.67 million for up to $10,000/hectare.

Living on the chacra might be cheaper than living in the city.

I would be interested to see if others could detail how my back of envelope figures are wrong. But at least this gives you something to look at.

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ElTheo
5/20/2016 06:01 EST

It is easy to make a small fortune from farming, all you need is a big fortune.

Farming, like any other occupation is pretty specialized. All an accountant does is subtract expenses from income right? Farming might sound simple, but it is not and you need to calculate your investment in human capital.

If you plan to have a turnover of about $80k a month, you should sell about 300 heads of cattle a year.

So what do you need to sell 300 cattle a year?
Well first off, are you selling at weaning, are you fattening them, are you setting up a mini feedlot on your ranch, etc,etc.

I am also guessing you want to run them extensively. Even if you run them extensively you need to manage them actively or at least hire someone who is an experienced rancher.
Anyway, you should consider the following - you need to manage grazing, you need to feed supplementary feed, you need to schedule breeding seasons, you need to assist in calving, you need regular visits from the vet.

Are you going to grow high energy feed (for fattening)? - then you need to essentially be a small scale crop farmer as well (think tractor, etc).

The best production systems has a inter calving period of about 370 days and a 95% reproduction rate.

You also need to produce replacement heifers, thus they need to be kept until they are productive.

Think about 1.6 animal units for every calf you produce.

300 x 1.6 = 480 animal units and I am guessing best rangeland will need about 2 ha per animal unit.

Anyway there is money to be made in farming, but you have to know what you are doing. If it was so simple, everyone would do it.

If you are serious about being a rancher, you can PM me, I can give more advice.

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proger1989
5/20/2016 08:53 EST

im trying to buy a small chacra no more than 5 hac cus a lot of reasons said here.

is not so easy to find...

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