Buy beef now.....

[NM_Shooter]

Ranchers are getting hurt really bad this year, maybe irreparably. 

If you have freezer space, buy beef now, and vacuum pack it in bags for storage.  Meat prices are going to be off the chart. 

We lease our grazing to a rancher from Colorado, and when I talked to him, I told him that I thought that he was going to do okay if he could hold onto his herd.  He laughed and said that while he is fine with grazing this summer, he can't afford to buy hay to get his cows through the winter.  Because of the drought, baled feed (hay / alfalfa) prices are at an all time high (I think he said $200 a ton). 

Ranchers get squeezed hard by the government anyway.  Did you know that they get taxed for each head that they have?  For instance, the state of NM imposes an $810 tax on each bull, and $410 tax on each cow.... Annually! 

These guys borrow money to buy cattle every year and feed them through the summer.  Then they finish them off on corn and sell them off.  Their margin is decreasing.  He has 100 units of cattle on our ranch (a unit is a cow/calf pair) and I think he said that they put on about 3lbs a day.  Figuring transportation costs, salt blocks / vaccinations, feed, and loss of cattle due to disease and predators, throw in the crazy amount of tax they pay, and I don't know why they do it.

[Squirl]

I think someone was feeding you a line about the taxation, or they are way over paying it.  I had never heard of livestock taxes, but according to this publication (http://aces.nmsu.edu/pubs/_circulars/CR-635.pdf) NM taxes livestock based on 1/3 the market value.  So if the market value is $900, the taxable value is $300, and that is not even the tax.  You would then take the $300, and multiply that by the tax rate percentage.  My general understanding is it is around 5%, but I am still researching that.  So that would be a tax of $15 a head for a $900 cow.

[NM_Shooter]

This came straight from the assessor's mouth for Tierra Amarilla county. 

Basically, we rested our pasture for two years, and rented grazing out again this year.  Our grazer called me up, told me that the county was after him for taxes for 2009 and 2010, and they needed a letter proving that he was not on our property those years. 

I called up the county, talked to the clerk (Brenda Eyman, 575-588-7726) and I spoke with her about the situation and asked questions re where to send the letter.  I then asked her about the rate of taxation for cattle, and I was floored with her response. 

I'm going to call her again today, and verify those rates, as it seems incredibly high. 

[Squirl]

It looks like I was wrong.  It looks like the taxes per head are even much lower, and most people don't pay them at all.  It looks like there is no enforcement on small farmers.  The average cow is taxed $5-$10.

http://www.pntonline.com/articles/livestock-43855-clovis-taxes-standing.html

I heard it is a good time to stock up on ground beef.  If a cow even thinks about getting old it is being turned into hamburger.  Because of the droughts most herds are being culled and prices will be very low in the short run.  Prices are expected to go through the roof in 2012 and 2013 because the herds will take that long to reproduce. With the rise in demand from Asia and India, and the ban on U.S. beef coming off in Japan, producers were making good money earlier this year.  Now everyone is selling at once and prices are falling.

[Squirl]

It is probably the rate set by the state board, then you need to divided that to 1/3 for the taxable value.  Then take the county tax rate times that. $800 seems about right for the market value of a bull.  Also considering they are only allowed to raise the rate 3% per year and commodity prices have risen much faster than 3%, the taxable value would probably be lower than market value.

[MountainDon]

My understanding was/is that every animal on a farm or ranch is supposed to be listed and reported every year as of January 1st. At the same time farm and ranch equipment is to be listed and reprted. The same rules apply to all NM businesses. Along with the numbers and in the case of equipment, make and model, the date of purchase, price paid , etc have to be reported. Many counties know there is under reporting but have not the manpower to enforce the reporting.

The taxable valuation for livestock follows the same schedule as for real estate; 1/3 the market or declared value. Business equipment rate goes down as the equipment ages. That's called the Business Personal property Tax and it pisses me off every year. I paid taxes on it when I bought it and then you pay again every year. If you keep it long enough the rate approaches zero.

[rick91351]

As a stockman and beef producer I can not agree more.  Buy beef, eat beef.  In Idaho we are not taxed at all like that on our cattle.  And yes hay this year is going through the roof.  Drought, fuel and transport is all making it rough.  It will make it real difficult for not just ranchers but the hobby horse people as well.  Especially when it is hard to get rid of unwanted horses now anyway.  Just as some people dump dogs and cats.  Some areas people have been caught taking them out in the deserts turning them loose.     

[RIjake]

Just bought a 1/4 of a cow from a buddy at work who raises grass fed.  Last year I bought a 1/2 a pig.  I like knowing what my food has eaten!

[NM_Shooter]

I got clarification on taxes I spoke to a supervisor and was told that the $810 / $410 numbers were the valuations that the animal would be assessed at, and the tax rate is set on that number.  It does work out to roughly $10 to $12 an animal.