Mr Pratt’s most recent blog discusses using debt properly. Now, okay, my mind goes immediately to the song, ‘Neither a borrower, nor a lender be. Do not forget, stay out of debt.’ Which then led me to wonder where that came from. I knew it was from Shakespeare’s ‘Hamlet’ (Polonius counsels his son, Laertes in Act-I, Scene-III of William Shakespeare’s play, Hamlet by saying, “Neither a borrower nor a lender be; / For loan oft loses both itself and friend.” But what about the tune?
Completely surprised when i discovered that it was created and made famous on the TV sitcom, Gilligan’s Island, which i watched religiously when i was young. SO FUNNY! It is sung to the tune of the Toreador Song in Bizet’s Carmen.
The Bible also has advice on debt and teaches us to guard against being in debt, likening it to slavery and bondage. However, debt does not seem to be a sin, but a tool to earn money wisely, but counting the cost before taking on the burden.
May 9, 2018
from the Ranching for Profit School
A lot of people tell me that they want to be “debt free.” They are tired of making big interest payments on land, livestock, machinery and their operating note. They have had too many sleepless nights worrying about making the next payment. They believe that if they didn’t have to borrow money they would be more profitable and financially secure.
But the proper use of debt makes us more profitable, not less. And being debt free doesn’t make us financially secure. In fact, for most of us, short of winning the lottery, the appropriate use of debt is our only realistic path to financial security.
The problem isn’t debt, it’s our misuse of debt. The two most common ways we misuse debt are:
We put finance first and economics a distant second
We use debt on the wrong things.
Using debt effectively begins with understanding the difference between economics and finance. It boils down to this: In economics we ask, “Is this profitable?” In finance we ask, “Can I afford to do it?” If we are going to be smart about our use of debt, economics must come first. If it isn’t profitable you don’t have to worry about how you’ll pay for it, because you shouldn’t do it in the first place.
When RFP grads evaluate the profitability of a livestock enterprise they include opportunity interest on the herd as a direct cost in the calculation. If the enterprise has a healthy gross margin it tells us that borrowing money to expand the herd will increase profit. If we haven’t included opportunity interest in our calculation we can’t be sure if expanding the herd is a good idea.
The other problem is that people use debt on the wrong things. There are two primary places where we put money in our businesses: fixed assets and working capital. Simply put, fixed assets are things we intend to keep (e.g. land, cows, infrastructure, vehicles, equipment). Working capital is the money tied up in things we intend to sell (e.g. calves). Most of us have most of our money invested in fixed assets. This is the biggest financial problem in agriculture. It’s a problem because when most of our money is tied up in things we intend to keep, we have relatively little to sell and generate very little income relative to the value of our assets. Making matters worse, a lot of the income that we do create gets spent maintaining the fixed assets. That’s why most ranchers are wealthy on their balance sheet and broke in their bank account.
Borrowing to buy fixed assets may be a smart long-term investment strategy, but it might cause you to go belly-up in the short term. We’d be better off to use debt to buy assets that directly produce income.
We shouldn’t be afraid to borrow money, provided the economics of our enterprise is rock-solid and we use the borrowed money to buy income producing assets.
Be kind to future generations and throw out your junk. Give away or sell what is usable and chuck the rest. In all likelihood, your children or others will simply hire someone to come in get rid of your stuff – they don’t have time. To me, it is selfish to saddle anyone with this chore. If you are married into a family who has plenty of storage, then NOTHING is thrown away and there is machinery, furniture, plates, and other trinkets stored to the rafters of 4,5, and 6 generations. It is honestly beyond ridiculous. Stuff that could have had value and usefulness 50 or 60 years ago, sits in storage all this time and is now worthless. Selfish and sad, very sad.
by Chris Wadsworth, AARP Bulletin, January/February 2018|Comments: 1
DAVID SEED PHOTOGRAPHY/GETTY IMAGES
“The Gentle Art of Swedish Death Cleaning” explains this downsizing ritual.
The latest export from Sweden isn’t a sturdy station wagon or a funky furniture store, but rather it’s a way of life. More specifically, it’s a way of end-of-life. It’s called döstädning, which translates to “death cleaning.”
In the tough-minded ways of this Scandinavian culture, it’s a decluttering practice that’s more about relieving a burden on family than creating pleasant surroundings. Americans have taken note of the ritual, which can begin as early as one’s 50s.
Q: What problems does keeping too much stuff cause your loved ones after you’re gone?
A: It’s very time-consuming. Why should my family take so much time — having jobs, families and everything else they have scheduled — to take care of my things?
Q: How do you decide what to keep or discard?
A: Talk about it with your family. It’s a delight to go through things and remember their worth. But if you don’t remember why a thing has meaning, then it has no worth, and it will be easier for you to part with.
Q: You write that you should get rid of “private” items — such as diaries. Why?
A: If you think a secret will cause your loved ones harm or unhappiness, then make sure to destroy such items. Make a bonfire, or shove them into a hungry shredder.
Q:How does cleaning help the cleaner?
A: The more I have focused on my cleaning, the braver I have become in discarding possessions. I have had a moment to reflect on the event or feeling, good or bad, and to know that it had been a part of my story and my life.
Cleaning and sorting through old stuff and ya never know what you’ll find. In an old truck of stuff my grandma had saved for me were these rationing stamps. Don’t know if she meant to put them there, but it gives me a chance to look up the history of fuel rationing in America. As the photo shows, these were for my grandparents’ 1929 Ford.
According to historical records, fuel and other major commodities was rationed after the attack of Pearl Harbor, December 7, 1942. These A stamps allowed the general population to receive 4 gallons of fuel a week!
Should be enjoying fresh pullet sized eggs in about 3 months.
From delivery of chicks to first pullet eggs is typically about 6 months.
25 female chicks (26 actually, but 2 were roosters and one hen is deformed) – $100
Starter feed – 3 bags each 30 lbs at $90
Mixed feed about 1 gallon (or 4 lbs) per day: $2.20 per day times 120 days – $396
Labor for 180 days varies, but averages about 20 minutes a day at $15/hr – $900
So before 25 hens are even laying or producing anything at all, your backyard laying hen project has invested a total of $1486. That’s a lot of eggs you could have bought at $4/dozen. But now that they are laying, there should be about 1 1/2 years of good laying, but of course the feed and labor expenses continue. Labor will slightly increase because I’ll be moving the chicken tractor to fresh grass everyday and collecting, sorting, washing (if needed), and packaging the eggs EVERYDAY.
Total costs (not including building the brooder and chicken tractor): $1486
So figuring forward:
Feed for 1.5 years (540 days @ $2.20) – $1188
Labor at $15/hr for 30 minutes a day – $2025
Egg cartons if you buy them are at least 50 cents (281 cartons) each: $140
Assuming a lay rate of 1 egg per two days (this is an average including a harsh winter where costs will continue but few eggs will be laid) per hen (times 25 hens) – 3375 eggs
(270 days/2 = 135 times 25 hens – 3375 eggs)
Total costs during laying period of 1 1/2 years – $3353
Final costs of raising 25 chicks to laying age plus production for 1 1/2 years: $4839
Cost per potential dozen (281 dozens): $17.22
Value of spent hens is negated completely by labor costs associated with butchering.
All this assuming that in one night along any part of this route, a fox, raccoon, neighbour’s dog or coyote doesn’t come in an annihilate all your hens.
Now winter laying could be increased somewhat by keeping heat and light on the hens.
Certainly, i could be the typical farmer and say ‘well….if i don’t count my time….but that would be unfair, right? He’s taken ALL the risk, done all the labor, built all the infrastructure, and cared for them every single day. If i removed all the labor costs from the scenario, cost per dozen is $6.63/dozen.
Why am i doing this? good question. it’s ridiculous actually, except i cannot buy eggs from hens on pasture being fed non-gmo and mostly organic grains in our part of the world and they do taste better and have more nutrients (according to various tests).
These are real costs to produce eggs from hens on pasture, not inflated or overpriced. Lowering production costs is easy – stacked cages with 67 to 76 square inches of usable space per hen being fed well balanced diet of conventional grains and no chance of being eaten by predators. Automated egg sorting, washing, and packaging. Find employees who will work for minimum wage or less in dusty conditions. Tightly confined conditions allows for fewer employees. Hens will be allowed to lay for less than a year (until first moult) and then replaced to maintain high production year round. This part can also be done on pasture raised as well and would be a good idea. Production drops considerably after that first moult, so replacing them with younger, higher producing hens would reduce costs a little.
Sometimes a stumbled upon recipe in a catalogue or magazine or flyer really resonates with your family and it becomes part of the regular menu lineup. This casserole is one such that i found probably 20 years ago. The beauty of it, is that it is easily modified to accommodate your own tastes and whatever you have on hand (within reason of course!)
The original recipe is pictured way below, but the one i made yesterday included my home raised green beans and home grown grass finished ground beef. For chopping the vegetables i use a mini food chopper and even chop the green beans if i’m preparing for Sunday’s meal with Allen’s 98-year-old Aunt June. She has lost her teeth and can’t keep track of dentures – so it is what it is.
Family sized version:
2 lbs grass-finished ground beef
1 medium sized onion – chopped
3 medium sized carrots – chopped
1-2 cups Asian long pole green beans – chopped
1 24 oz jar of Eden Organic tomatoes (normally i use my home raised tomatoes, but i’ve already run out!) Eden’s brand is excellent, but, honestly, to open them, i either need my stout son, Dallas, to do it, or i go get my long handled Channel Lock pliers. It’s really ridiculous.
2 cups of your favourite cheese, divided – 1 1/2 cups to stir into veggie/beef mix, 1/2 cup to top off the casserole. Or stir in 2 cups of cheese to melt – whatever your choice!
Brown the ground beef in a 4 quart pot and add all the vegetables, including the tomato sauce, throw in maybe a tablespoon of salt (check your tomato sauce – it may already have salt in it – i try to use straight tomatoes) and a teaspoon of black pepper -whatever suits ya, and let it simmer for 20 minutes or so. Add 1 1/2 cups of your favourite cheese and stir to melt.
Once the mix is ready, pour into a 9×13 inch pan, level it off, then top with biscuits. I make my own, but you can buy some to use. Then sprinkle about a cup of shredded cheese on top. Then add a sprinkling of parsley, basil, or oregano if you like.
Bake in a preheated oven of 375 F for about 28 minutes until cheese is melted and biscuits are golden brown. This makes 6-8 servings. Takes about an hour to make and bake, but if there are leftovers, it’s still a time saver. What does it cost? that will totally depend on the quality of ingredients you purchase.