Planning to ranch

In 2001 Andrew and I began discussing how we could return home to ranch with his Dad. We ran several scenarios.

Here are the ones we presented to Papa Nano for his feedback.

Scenario 1.
Buy land (approx 160 acres) and find a job in the local area. We hoped to find a place and a job within a year. Andrew would work a job until such a time as he could make a break. This would probably be done through leasing land and buying cows.

PROS
Provides a permanent place to live (may need to build a house or buy a trailer)
We would have a place to keep the cattle if lease expires
A job would probably provide some form of health care coverage
CONS
Ties up start up capital in land
Land prices are currently high
Requires an off farm job
Due to prices, this may not be the best time to enter the cattle business

Scenario 2
Lease land and use capital to purchase cattle. We would enter the cattle business full time right away. We would live wherever is most convenient.

PROS
Does not tie up start up capital in land
Does not require an off farm job
Fastest way to become independent in the cattle business
CONS
Leases can be unpredictable
Does not provide health coverage
Does not provide a permanent place to live
Does not provide a learning period. All mistakes would be expensive
Due to prices, this may not be the time to enter the cattle business

Scenario 3
Find a job and move to the Wade place. (This is were we live today.) While living in Wade, we could look for land to lease and eventually buy. We could start raising sheep and goats immediately, and only enter the cattle business when it is advantageous.

PROS
Allows us to buy land at a later date when it is hopefully cheaper
Allows us to be more selective when buying
Makes finding leases easier since we will be living in the area
Does not tie up start up capital in land
Good opportunity to learn the business and help Dad out at the Wade place
Allows us to start making money on sheep and goats right away
We may be able to run some cattle if Dad is deliberately under stocked
A job would probably provide some form of health insurance
CONS
Requires us to tie up money in a house on the Wade place we will eventually leave
Not the fastest way into the cattle business (this may not be a con)
Requires an off farm job.


We began to save money while still living in Michigan. I got pregnant with James and he was born in April of 2002.

The next post will tell the plan Papa Nano proposed to us.