All cow-calf producers look smart when 500-pound calves are worth $1800 to $2000 per head. They can do many things wrong and still make a profit. How many cow-calf producers are going to look smart when the cattle market crashes? I’m afraid the smart ones will be in the minority by a large margin.
According to the Livestock Marketing Information Center, the average cost to produce a calf in 2024 was a whopping $1045. That was the average. Since many PCC™ customers have a cost of production that is 60 percent of that, I have to assume many status quo cow-calf producers have a cost of production in the $1400 to $1500 range.
As long as calf prices are as high as they are right now, most cow-calf producers will be profitable and look pretty smart. However, calf prices will not remain this high forever. The last time we were in a situation like this, the value of our calves was quickly cut in half when herd expansion took off. Can you remain profitable with calves that are only worth half what they are worth today?
What are you going to do? Most cow-calf producers desperately need to find ways to reduce their dependence on outside inputs, which will reduce their cost of production. When cattle prices drop, the cost of inputs will continue to go up. Producers also need to find ways to increase their production per acre. Many PCC customers have increased their production per acre by 50% or more.
Pharo Cattle Company™ has the genetics and the philosophies you will need to look smart in the not-so-good times, as well as the good times. Producing MORE for LESS is the new key to long-term success in this business! Let us know when you are ready to start making the necessary changes in your operation. Please don’t wait too long.