When most people think of cattle ranches, they think of wide-open spaces in the arid west where several hundred cows have thousands of acres to roam about. Those ranches exist – but they are not the norm. They probably never were the norm. The size of the average cowherd in the United States is 44 head. Nearly 30% of the cows in the United States are in herds of 50 head or less.
I know several cow-calf producers with 50 cows or less who are very profitable – but they are doing everything right. Most have left the commodity business and are selling a product like grassfed beef. Some producers with 50 cows or less have a multi-enterprise farm operation and the cows are just one of the enterprises. Most cow-calf operations with 50 cows or less, however, are being supplemented with off-farm employment.
My definition of a business is an entity that produces income for the business owners. A viable business must be able to stand on its own. Once your cow-calf operation needs to be subsidized, it is no longer a business. It is a hobby. It will provide you with something to do – but it won’t make you any money. The only ones who will profit from your hobby will be those who sell you the inputs required to keep your hobby going.
Being a farmer and/or a rancher provides a great way of life, but in order for it to be sustainable (passed on to the next generation) it must be both profitable and enjoyable. More and more members of the next generation don’t want to inherit an expensive hobby. They have watched one or both of their parents work 40 hours a week in town – and then come home to work another 20 to 30 hours a week on their hobby. Where’s the profit and enjoyment?
If you really want to turn your cow-calf hobby into a profitable business that the next generation will want to inherit, you will find a way. If you don’t want to put out the required effort, you will find an excuse. Others are turning their hobbies into profitable businesses all over America. We have seen more cow-calf operations begin this transition in the last four years than we saw in the previous 20 years. That’s exciting! We will discuss this more in future PCC Updates.
Now, however, I would like to share a true story that will probably have an unhappy ending.
This story involves a 15-year-old girl who eats, sleeps and breathes cows. I was told that this girl’s great grandfather was quite the entrepreneur. He had a nice herd of registered cows, from which he marketed breeding bulls.
He was one of the first to utilize center pivot irrigation. He put up corn silage and created a self-feeding system to fatten his cattle – which were slaughtered and processed in his on-farm processing plant. This man then sold beef to housewives from all around the area. He was involved in all aspects of beef production – from the genetics to the dinner plate.
I don’t know the whole story – but I do know this girl’s dad and granddad still own the land her great grandfather owned and managed – but it is not even close to what it used to be. This once-great farm has become more of a liability than an asset. I also know that both Dad and Granddad drive a school bus and provide part-time help to another farmer. What happened?
I don’t know what happened – but I do know some people are not cut out to own a business. That’s okay. There are others, however, who want to own a business – but they allow a job to hold them captive. A job can become your comfort zone. It provides security. If you want to create a successful business, you must be ALL IN! You will never be ALL IN, however, until you quit your job.
It’s possible for this story to have a happy ending for the 15-year-old girl – but I have my doubts. However, if she is cut from the same cloth as Great Granddaddy and if she is given half a chance, she will be able to do whatever she wants to do. She will allow nothing to stand in her way – and she will tolerate no excuses. She will create the future of her dreams!
As I said earlier, if you really want to turn your cow-calf hobby into a profitable business that the next generation will want to become a part of, you will find a way. Pharo Cattle Company would like to help you in that endeavor. Do you think your next generation would like to become part of a viable and profitable cow-calf business? If so, let’s make it happen!