Category Archives: Home-Based Business

Getting Into the Cattle Business: Buying a Ranch and Making it Pay

Solid figures to help me decide whether or not to pursue any land purchases should any come up for sale. Farms in Linn County, MO rarely change hands.

Land & Livestock International, Inc.

By Dr. Jimmy T (Gunny) LaBaume, President & CEO, Land & Livestock International, Inc.

What and Why?

First, do you want to own a ranch or do you just want to be in the cattle business? Did you know that you can enter the cattle business without owning either land or cattle?

"Waiting for a Chinnook" Also known ...
“Waiting for a Chinnook” Also known as “Last of the 5000”

You are already thinking, “This guy has lost his mind!” But seriously, you can. You can lease land and take in pasture cattle–i.e. you can pasture someone else’s cattle on leased land for a monthly per head fee. Once you get a reputation for paying your bills and taking good care of other peoples land, ranch lease opportunities will come to you. You won’t have to look for them.

This is an excellent way for young prospective ranchers to get into the business without having to…

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Sell Now or Sell Later

There has always been great debate about whether or not to sell open (not pregnant) cows in the fall at pregnancy check or turn the bull back in with them and see if they’ll breed for another season, then sell them pregnant.  Many trade publications will encourage producers to ‘add value’ to a cull cow, but i seriously question the validity of such endeavor, but then again, i’m not an expert with numbers, i’m just lazy and don’t want to be shifting and handling and sorting my cows more than necessary.

It’s easy enough to simply put numbers to the various practices, then make your favourite decision.

My first stumbling block with the concept of adding value to one of my cull cows has to do with passing off a potentially problem cow to my neighbor.  That doesn’t sound very neighborly or make good business since.  However, one could simply ‘add value’ by pouring the feed to the cow to make her fat and increasing the grade or value for slaughter.  It also could be justified by the fact that my management is super low input and most of my cows would thrive in another producer’s management style.

Let’s compare:

Pregnancy check in the fall reveals 10 open cows.  My cows all have a calf at side or they’d already be sold, so 14-30 days after the calves have received their vaccines, I’ll wean the calf by selling off the cow to slaughter.  She’s not going to be in the fattest condition because she’s nursing a nice calf and a non-fat cow will not bring top dollar.

For example, the different cow classes are as follows:

SLAUGHTER COWS:

  1. Breaking and Boning (75-85% lean) $47.50-$57.50
  2. High dressing $58.00-$67.00.
  3. Lean (85-90%) $44.00-$54.50

Cows in the fall nursing a calf will typically fall in the Lean or Breaking and Boning categories and this year are bringing about $43/cwt (hundredweight).  My cows are primarily Corriente or Corriente cross and will weigh about 800 lbs (by comparison and Angus or other beefier breed will weigh 1200 lbs, although she still may be thin and be in the same category).

 

OR

Keep the cow and turn the bull back with her and hope she gets bred – Let’s say there is 70% chance that she will.  So, we keep the cow until she is in the 2nd stage of pregnancy or about 5-6 months along.

Therefore, if she would bring $875/head as a P2 cow (and this would be a stretch if she is older than 5 or 6).

OR

Leave the bulls in with the cows an additional 20-30 days and hope that another 50% of the potentially open cows actually breed, then sell the bred cows that calved late as well as the open cows in mid-December.

Let’s compare:

10 $105 -$1,050 labor
10 $127 -$1,270 pasture costs
7 $875 $6,125 bred cows sold
3 $400 $1,200 open cows sold
$5,005  keep and sell in June
vs
5 $360 $1,800 open cows sold
5 $675 $3,375 bred cows sold
$5,175  sell in December
($170)

Things to consider.Interestingly, in my opinion, these numbers probably won’t change even if one leaves the bulls in for another 20 days, sort out the cows that have not calved by 10 June and selling them as ready to calve in the last trimester (P3).  In this part of the country (Missouri, USA) a summer calving P3 cow is not as desirable as a fall calving P2 even though i’ve credited her with more value in my chart above.

Leaving the bulls in an additional 20 days is advantage for me in that i avoid having to handle the cattle during ragweed allergy season.  My allergies are so bad, that this is a serious consideration.  However, the reality of bringing in the cows with baby calves and sorting off the one which haven’t calved yet is that it likely won’t happen and one would be right back to a 65 day calving season.  However, those cow numbers could be written down, paired up in the fall and then sold as pairs when animals are mustered in for preg check and calf vaccinations.

The point of changing the time and reducing the length of breeding season was to avoid ragweed allergy season.  However, i discovered that at least this year, i was unable to withstand the debilitating effects of ragweed as late as 1 September.   Also, the longer the calving season, the more inconvenient it is to shift the animals through a managed rotation.

Other alternative is to separate those open cows and a bull put in with them.  Disadvantage is that a separate herd must be maintained for 7 months.  Not really a feasible situation.

So, now that i’ve thought through the pros and cons of the various scenarios, especially solving the issue with allergies i will plan to leave the bulls in an additional 20 days, thereby hauling them out about 20 September.  This means, however, that the following spring that i’ll be dealing with an additional 20 days of baby calves to shift (yes, this is a pain in the butt) and be diligent to write down the numbers of those cows calving late so they can be sorted off during preg check in November.    If half of those late calvers go ahead and get bred, it will add dollars to my bottom line without adding much expense.  Most importantly, it solves the allergy issue.

WOTB – (working on the business)

Cheers

tauna

 

 

The Fall of Thor’s Hammer

Book Review

Follow along with Levi Prince and gang in this Book 2 on their fantastical adventures at camp.  This series is geared towards young adults, but i had a blast reading along.  Easy read, fast-paced, excellent story line, and message.  Print and kindle copies available at several venues.  Click through on Goodreads.

Other great young adults books by Amy C Blake:

The Trojan Horse Traitor (Levi Prince) Paperback – November 17, 2015

Whitewashed: On the Brink Series Book 1 Paperback – February 7, 2015

Colorblind: On The Brink Series, Book 2 Paperback – February 7, 2016

Looking for gift ideas?  Don’t even forget about books – and these are highly recommended.

Cheers

tauna

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The Fall of Thor’s Hammer – Amy C. Blake

Making Investments vs Creating a Job

Economic definitions:

Investment – an investment is the purchase of goods that are not consumed today but are used in the future to create wealth.  to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.

Job – a paid position of regular employment.  a piece of work, especially a specific task done as part of the routine of one’s occupation or for an agreed price. Everyone has goals in life – some will involve being financially secure.  If you are interested in building financial wealth, there are a few basic premises which need to be incorporated into your plans.

1) Your saved dollars must be put to work!

2) Break free from the bondage of financial slavery by changing your spending habits

3) Invest in yourself – education or your own business

4) Learn to manage the money you do have – more money will not necessarily fix your financial problems

5) Debt is a hard task master – avoid it!

6) Use your income from a paid job to make investments that will gain in value while you continue your paid job.  Later you can retire from your job and enjoy your investments.

Many, many economic experts have different ideas about how to invest, so it’s up to you to decide who or what you want to invest in.

Dave Ramsey Investing Philosophy

How to Become Wealthy  – Nine Truths that can Set You on the Path to Financial Freedom

Rich Dad/Poor Dad – Dave Pratt, Ranching for Profit newsletter

Shabbat Shalom!

tauna

The Three Secrets for Increasing Profits

Farmers and Ranchers seldom spend time WOTB, but now that it is too hot outside to be working in the business (WITB)  cutting trees, spraying brush, etc, now it’s time to sit back and listen to David Pratt, owner of Ranch Management Consultants, and the dvd i just received entitled, “The Three Secrets for Increasing Profits” and begin WOTB.  (Working On the Business).

Happy 4th of July!!!  be safe out there!

Cheers

tauna

“If our farms are not fun, not profitable, or are too much work, our children won’t want them…. Romancing the next generation is the ultimate test of sustainability.” Joel Salatin, Polyface Farms

Ultimate Test of Sustainability?

Will Your Operation Succeed to the Next Generation?

It’s been said that a farm or ranch is not truly sustainable unless it employs at least two generations. I believe it’s imperative that as producers we recognize that even if we become both ecologically and economically sustainable, but fail to pass our mission and work on to the next generation then we’ve failed the ultimate test of sustainability.

According to the most recent census of agriculture: from 2007 to 2012 there was a decline of over 95,000 farms in America. A quick look at the current trends tell us that most of today’s family farms and ranches will not succeed to the next generation.

I believe there is hope for a bright future.

This hope is not based on wishful thinking but rather a ground swelling of innovative farmers that are indeed beating the odds and are building thriving operations. A few names you may recognize are operations like Joel Salatin’s Polyface Farms in Virginia, Gabe & Paul Brown of Nourished By Nature in North Dakota, as well as Will Harris’s White Oak Pastures in Southern Georgia. These are just a few of the many operations that are shining a bright beacon of hope to the greater agricultural community.

If you visit any of these operations there is a very obvious, but all too often overlooked, common thread of success. Each of these operations spring forth with a multigenerational team of people that bring intellectual diversity to each acre of their land.

Most of us in agriculture are at a road block because we’re too narrowly focused on a production mindset and we’ve lost sight of people and relationships. We must make the critical distinction that people create profits – profits don’t create people.

Those of us pursuing regenerative agriculture understand the value that biological diversity brings to our land, but we often forget about the value that human creativity and diverse intellectual capital can bring to our land.

At Seven Sons Farms we’ve stacked multiple enterprises on only 550 acres. By creating synergistic relations between our land, livestock and people, we are able to employee over 10 full time people as well as several part-time positions. We refer to our team as our intellectual human polyculture:

Human Pollyculture

Any successful leader knows that their organization’s most valuable asset is having the right people in the right place.

Zig Ziglar offered this belief: “You don’t build a business – you build people – and then people build your business.”

If the above statement is true then it begs the question – how is agriculture as a whole doing at building people? The graph below shows a plummeting decline in the number of human minds in agriculture.

The erosion of human capital:

1482013689_5855bbf99fc0d.jpg

SOURCES: Agriculture in the Classroom, 2014; BLS, 2014; NASS, 2014a,b; U.S. Census Bureau, 2014a,b; USDA, 2012

Over the course of time we have eroded much of our land’s precious resources in the form of minerals and soil organic matter. But no greater erosion has taken place than the depletion of human minds from each acre of our land. In the early 1970s we reached a critical point – for the first time in the history of American agriculture the number of human minds per acre involved in agriculture fell to a negative ratio.

Interestingly, it was around this same time period that the farmer’s share of the food dollar began to plummet as well.

The erosion of the food dollar:

There are many factors at play but it only stands to reason that if we want to capture a wider diversity of the food dollar, it requires wider diversity of intellectual talents. This is exactly why at Seven Sons Farms we have sought to foster synergistic relationships with people that enable us to capture a greater diversity of the food dollar.

To sum up the past half century of agriculture, one could say that in pursuit of production, we’ve attempted to trade people for profit. In the end we’ve yielded neither profit nor people.

At Seven Sons we believe that the people connected to the land represent the most valuable asset a farm could ever possess. To illustrate this point, imagine for just a moment if you were to remove Joel Salatin, Gabe Brown, or Will Harris from their respective farms. These farms would look nothing like what they do today without the creativity and vision that each of these leaders bring to the land that they are called to steward. The same holds true for your farm as well. The beliefs you operate from, the vision you put forth and the people you inspire to join you – these are the game changers that will empower your operation to beat the odds and succeed to the next generation.

There are unprecedented opportunities ahead of us…

I believe we have unprecedented opportunities ahead of us when you consider many of the recent breakthroughs in regenerative agriculture as well as the rapid shifts we’re seeing in our food culture.

So if you’re looking to exchange new ideas and be challenged to think outside old paradigms then I encourage you to join myself and hundreds of likeminded people at this year’s Grassfed Exchange in Albany New York.

The very mission of the Grassfed Exchange is to catalyze the exchange of practical knowledge, ideas, and strategies that you can take home and begin applying on your operation. Bring a family member, friend or budding young agripreneur who is looking for their way forward in agriculture.

What The Grassfed Exchange Is About:
Click here to register for the 2017 Grassfed Exchange

Reprinted from Grassfed Exchange

Time Management Lesson

Too many times I engage in projects which end up as time wasted. Case in point this 12×12 chicken tractor. After spending time and money on it, I’m now faced with more time wasted disassembling it. I have no intention of raising layers on pasture again and it’s too awkward to move very far and a waste of space to store it. The high quality tarp from Troyer Tarp will be stored, however, since it is a $100 item. I’m learning, albeit slowly and with the wisdom my children bestow upon me, to utilize my time more wisely.

Cheers!

tauna

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