A lot of beef cattle farming operations only make money when auction prices are at their very peak. Even then many subsidize their farms with off-farm income to keep from going out of business. Many grass fed beef operations are equally plagued by high production costs and are barely profitable even despite the high premium currently paid for grass fed beef.
Farmers are generally a frugal lot. It's not wastefulness or a lack of hard work that's the problem. They are resourceful. They work hard. And most are willing to do just about anything for the love of their cattle and their land.
So what's the problem? What are they doing to cause their production costs to be so high? What changes can they make to their beef cattle farming strategies to become consistently profitable low-cost producers?
The list below is a tour through the 9 biggest issues undermining profitability on many cattle farms - conventional, organic, and grass fed alike - along with suggestions for what to do about it.
Grass is cheap. Making (and feeding) hay, silage, and grain is not.
A pasture rotation requires some wire, a bit of mineral supplements, and possibly an ATV. Compare that to the fleet of tractors, balers, feed wagons, combines, rakes, hay sheds, and bins, along with all the extra fuel, maintenance, repair, and labor that goes into making and feeding hay, grain, and silage.
Most farmers spend countless hours researching more efficient ways of producing feed. Stronger tractors, bigger balers, labor-saving technologies, and more efficient feed rations to make it through the winter. Yet very few put time and effort into planning how to reduce the length of time they need to feed in the first place.
That is why my website and my book focus so heavily on learning how to extend the grazing season deep into the winter months. The longer cattle can stay out on pasture each year, the cheaper production costs will be.
A cow-calf herd shouldn't be on feed at the sight of the first snowflake. A grass finishing program should not need to end just because of frost and a little snow. Learn how to prepare high quality winter pastures and learn winter grazing strategies so you can extend your grazing season long past the end of the growing season.
One caveat - a cow-calf herd can only participate in an extended winter grazing program if the calves are born during the growing season, otherwise cow health and fertility will be put at risk. My article about picking the ideal calving date explains how calving date affects cattle nutrition requirements during the winter and why winter grazing doesn't work with a traditional spring-calving herd.
Most cow-calf operations calve as early as possible each year so they can sell their weanlings in late fall as the cattle come off of pasture. This allows them to pay back their operating loans to the bank before the end of the year.
Unfortunately this kind of calving cycle is an expensive habit to have. The effort, time, and infrastructure required to get live calves onto the ground and keep them healthy amidst the spring mud and late winter snows is only part of the cost, even though that in itself is already quite substantial.
Winter feed costs are also substantially higher with this type of calving program than calving at other times of the year. Calving before the start of the growing season means that cattle cannot coast through the winter. They will need optimal feed all winter to ensure that the cows are in peak condition when they calve. If not, their conception rates will be terrible during the next breeding season. But keeping cows on optimal feed all winter is expensive. And as long as your cows need optimal feed quality all winter, you can't expect to keep grazing winter pastures to keep your costs down.
What's the alternative?
Calve later, during the growing season. This is colloquially known as "summer calving" in the industry, though the term is somewhat misleading because calving is not necessarily happening at the peak of the summer heat, but rather 4 to 6 weeks after the pastures green up again in the spring.
Summer calving will make a world of difference to your production costs.
Warm temperatures, dry ground, and clean pastures to lay in means more live calves and dramatically less diseases. Cows also tend to need far less assistance during calving - in many cases calving difficulties decrease so substantially that farmers only bother checking on the herd once a day instead of every 2 hours, 24-hours a day, for the duration of the calving season!
Even conception rates improve when switching to a summer calving program.
And because the cows have time to fatten up on prime lush grass before they calve, they will be in optimal health when they calve even if they have lost a little body fat during the winter. Which means you can coast your cattle through the winter (lower feed costs). And you can safely graze winter pastures much longer without affecting the health and fertility of your cows, thus reducing the amount of time you need to feed hay and silage in the first place.
Switching to a summer calving program does require you to completely rethink your marketing strategy and sale dates. In a summer calving program the calves will still be too young to wean and sell in the fall. But why wean so early - let the calves stay with their mothers for the bulk of the winter - the little bit of extra milk the calves will get will help coast them through the winter very cheaply - far cheaper than if those calves are kept in a backgrounding feedlot - and then they can be fattened and sold as long yearlings off of pastures the following summer.
By selling heavier calves your farm will be able to produce the same amount of beef per year, but require less cows to do it! That's another big reduction to your winter feed costs!
Set-stocking and infrequent pasture moves are an extremely inefficient way to utilize your pastures.
What if there was a grazing strategy that increased pasture yields, increased grass quality, improved cattle weight gains, reduced fertilizer costs, reduced weeds, and reduced labor costs? And what if the fences and infrastructure required to implement this grazing strategy cost much less than any other fencing strategy by a wide margin?
There is such a strategy. These are exactly the things that happen when you switch to a simple, cohesive, streamlined DAILY pasture rotation. And the fence infrastructure required to operate it? That's the smart electric fence grid. And it works just as well regardless of whether you are raising cow-calf pairs, yearlings, or finishing beef cattle on pasture.
Image Credit: dollen, Flickr, CC BY-SA 2.0
Any cattle farmer not using this grazing strategy is leaving a lot of money on the table!
The cattle breed(s) you choose for your farm matter for two reasons: climate adaptions and marketing expectations.
The first - climate adaptations - seems obvious, yet surprisingly many farmers have breeds that are not suited to conditions on their farms. Cold tolerance, heat tolerance, parasite resistance, suitability for winter grazing, eye pigment for bright climates, firm feet for rocky climates, slow growing hooves for soft wet soils - the list of potential adaptations goes on and on. Picking a breed that matches your climate and production strategy will significantly improve cattle performance, reduce disease and health issues, and lower your production costs. Choose wisely.
The other issue - market expectations - is particularly important for grass fed beef producers. Winter feeding is expensive. So every extra winter that your steers and meat heifers spend on the farm before you send them to the butcher will dramatically raise your cost to produce beef. If you live in a seasonal climate, take advantage of smaller cattle breeds that finish sooner (and lighter) so you can slaughter before they need to be fed for a second winter.
By contrast, in warm climates where grass grows nearly year-round, take advantage of the larger cattle breeds. Heavier finishing weights mean that although the calves will need to spend more time on your farm to reach those weights, you will need to own less cows to produce the same total amount of beef each year. Which translates into lower production costs.
A lot of ranches are plagued by calving difficulties, diseases, poor conception rates, and inefficient cattle that have trouble gaining weight. The reason that unites all these symptoms is a lousy culling program and poor herd selection skills.
Any cow that needs assistance to calve needs to be culled. No exceptions. No heifer or bull calf that was ever treated for a health issue should ever be allowed to join the breeding herd. And no cow whose calf was ever treated for a health issue from the time it was born until it was weaned should ever be kept for another season. High-strung cattle, cows that fail to conceive, and cows that loose weight faster than their peers all need to go to the meat packers - they have no business in your herd.
Think this is too harsh? Worried that your herd numbers will dwindle? You're probably right if you're calving before grass begins to green up in the spring. But switch to a summer calving program when the weather, the temperature, and the calving conditions are all stacked in your herd's favor and these uncompromising culling practices are absolutely realistic and key to optimizing the performance of your cattle herd in your environment.
Nor do you need to wait for problems to show up in order to identify the poor-doers. Check out my selection and culling article as well as the Genetics and Breeding chapter of my book to learn how to identify the most fertile, easy-keeping, low-maintenance cows, heifers, and bulls before you add them to your brood stock.
Monthly forage analyses and livestock nutritionists are two of the most powerful and cheapest tools in the farmer's toolbox. Yet it always surprises me just how few farmers use these tools to their full advantage. They are missing out on a massive opportunity.
Managing your cattle nutrition is about so much more than just buying generic salt blocks from the feed store.
Salt is just one of many vitamins and minerals which may be missing in your cattle's diet. A deficiency in any other mineral or vitamin may be increasing disease vulnerability, reducing fertility, or limiting cattle weight gains. And only a forage analysis can reveal what's actually missing so the supplements match the problem. The boost to cattle health, fertility, and weight gains is not trivial!
But there are even greater benefits to using these tools.
Forage analyses will reveal how long you can continue grass finishing in the fall without sacrificing beef tenderness and flavor. And they will reveal which supplements you can use to keep the grass finishing program going longer even as winter pastures begin to deteriorate.
Forage analyses are key to extending the duration of the winter grazing season. Even the quality of the absolute best winter pastures will eventually begin to deteriorate as winter takes its toll. If your supplement program depends on just salt blocks or a generic mineral mix, you'll need to switch your herd to expensive hay or silage quite early in the season to avoid health issues.
But winter pasture doesn't degrade from one day to the next. It's a gradual process. And monthly forage analyses mean that you will know exactly how that process evolves. Add a little extra protein or a little extra energy to the mineral mix to make up for shortfalls in the grass quality and your winter grazing season will last many months longer.
Nor do cattle necessarily need to stop grazing winter pastures just because weight gains stall. They can safely dip into a bit of their body fat reserves* to make up for slight calorie shortfalls in the deteriorating grass quality (*note, this method is only safe with a summer-calving herd, not with traditional spring-calving cows). Dipping into body fat reserves is perfectly safe as long as it is monitored via body condition scoring to keep fat reserves within safe parameters and as long as the supplement mix designed by your livestock nutritionist continues to provide the right minerals, vitamins, protein or energy supplements to keep the cattle healthy.
This strategy of letting cattle dip into their body fat reserves means you can coast your steers, meat heifers, yearlings, and summer-calving cows through much of the winter on cheap pasture instead of expensive cattle feed. And as long as body fat reserves are kept within safe parameters, your cattle will bounce back with spectacular weight gains in the spring thanks to the benefits of compensatory gain.
As you can see, the points on this list are deeply interconnected. Summer calving, winter grazing, monthly forage analyses, and the oversight of a livestock nutritionist combine to create a powerful year-round production program at the fraction of the cost.
Splitting cattle into many separate groups is a popular cattle management strategy. In a winter feeding program there are lots of valid reasons to do this - particularly to be able to manage the nutrition needs of different age groups.
But in a grazing program this is a disaster. Keeping heifers separate and maintaining multiple cow herds on pasture simply means more labor, more fences to build and maintain, and extra unnecessary management expenses. It also seriously complicates your pasture management. And by splitting your herds you're missing out on many of the remarkable benefits that come from mob-grazing a single large herd using daily pasture moves.
The time it takes to move a single herd in a daily pasture rotation is roughly the same, regardless if the herd has 5 or 500 animals in it. Combining herds means less time wasted on pasture moves, less infrastructure required, and a much simpler grazing plan.
Simplify! Combine your herds as much as possible. Cows, heifers, yearlings, and even the grass finishing calves can all graze as a single large group in a single large grazing rotation. You'll be saving yourself a lot of money, your pastures will love you for it, and you'll see a nice extra boost to your cattle weight gains to reward you for your efforts!
Complicated grazing plans aren't the only unnecessarily complex thing undermining profits on many cattle farms. Many have dizzyingly complex business plans, multiple unrelated crops, and highly complicated marketing strategies.
While I am all for diversifying income sources, too many enterprises on the same farm means your focus is divided over too many things. And often new enterprises are added with the intention of rescuing existing enterprises that are struggling financially. Adding more to your plate is not the solution.
Start with a single focus and DO NOT ADD ANY MORE UNTIL YOU PERFECT WHAT YOU ALREADY HAVE. You cannot expect to develop mastery in any one thing while you're spread too thin. And you certainly cannot expect to find the time and effort required to simultaneously develop mastery in more than one thing at a time. Master craftsmen are specialists, not jack-of-all-trades.
If you already have another farm enterprise - such as grain production, orchard, or sheep, don't add a beef enterprise to the mix until you perfect what you already have on the go. If you have a cow-calf operation, don't start developing a grass finishing program until you have all the wrinkles ironed out in your cow-calf program. If you grass-finish, don't start simultaneously trying to produce bull genetics for sale. And don't fall for the popular idea that the purported advantages of combining multiple crops or multiple species is the holy grail that will somehow squeeze profits out of something where there were no profits before.
Put all your energy and focus into perfecting what you have before you complicate your business with another separate enterprise. If what you already do is not profitable and not operating smoothly, don't expect things to go better by juggling even more. Clean up, simplify, and perfect what you already do first, THEN add something new to the mix.
The previous points on this list have focused on the farming practices and management strategies that limit profitability. But change starts with the farmer. And their beliefs about how things ought to be done are often the limiting factor to creating meaningful change to the farmer's bottom line.
The cattle industry is notorious for its strongly held beliefs about how things should be done. And this critique applies equally to conventional, organic, and grass fed farmers.
It's not just tradition and resistance to new ideas that is to blame. Equally problematic are idealism about "the right thing to do" at all costs and hastiness to jump on new ideas without doing the homework required to seamlessly integrate those ideas into a production strategy and calculate their financial repercussions. The little details that we gloss over when we make our plans often hide the biggest pitfalls.
Successful cattle businesses are born from both an openness to new ideas and the cautious restraint required to delay implementation until every last detail has been planned out and a seamless whole-farm strategy has been developed on paper. What's right for one farm or one business strategy is not necessarily right for another. No two farms are identical. Teasing out the little details that make or break an idea takes a lot of work. Rigidity, idealism, and hastiness are all handy excuses to avoid the hard work of planning.
Profitable farmers don't make a lot of noise. They are too busy with their calculators.
Got any more cost saving farming ideas to add to this list? Share them in the comment below!
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