These days it’s hard to make money with cattle ranch business because the cost of equipment and fuel has swiftly outpaced the value of cattle. For this reason, it is becoming more and more popular and more and more practical to raise cattle in a natural, grass fed manner.
When your cattle get most of their nourishment from grazing, you are not as dependent upon material handling equipment and fossil fuels. In this article, we can discuss smart, natural ways to make money with cattle ranching. Read on to learn more.
What You'll Learn Today
- How To Not Go Broke Ranching
- 1. Size Matters
- 2. Cow to Worker Ratio is Important
- 3. Cow to Acreage Ratio is Important
- 4. Practice Good Land Conservation Techniques
- 5. Reduce Feed Costs with a Good Grazing Rotation Plan
- 6. Money Management is Important
- 7. Minimalist Ranching is a Money Saver
- 8. Choose Your Stock for Vigor
- 9. Choose Your Bull with Great Care
- How Profitable Is Cattle Ranching?
How To Not Go Broke Ranching
In cattle ranching, it has become a good bet that the market price for beef will continue to go down while the price for all of the goods and services you need to care for them will continue to go up. This is a recipe for disaster financially.
That’s why it’s so important to pay close attention to a number of factors in cattle ranching to avoid allowing your finances to spin out of control.
1. Size Matters
The size of your ranch has a significant influence on the cost of your operation. A very small ranch has little chance of turning a profit on cattle only. You must cultivate several other sources of income.
If you have a small ranch and a job off the ranch, you can do well. Even so, it’s best to keep your operation simple and take every possible precaution to maintain a low overhead.
2. Cow to Worker Ratio is Important
The number of cattle per worker also affects the costs that are associated with your land. If you have more costs associated with your workers than with your cattle, you’re going to have problems.
If you’re running between eight hundred and twelve hundred cattle per worker, then your costs for horses, equipment, housing and labor associated with each cow can be quite low.
3. Cow to Acreage Ratio is Important
The number of acres per cow is also an important factor to keep in mind. You want to maximize your carrying capacity per acre, but you don’t want to deplete your land. Even so, this does not mean that you should simply keep on purchasing land to run more cattle.
Instead, you should take steps to improve the land you have so that you can successfully run more cattle per acre. You need to invest in developing your water sources, managing your grazing and setting up an effective fencing system.
4. Practice Good Land Conservation Techniques
Work with the land instead of against it. The idea that the land is here for our use and we can simply pillage it until it is out of resources and then move on is an old-fashioned, unsustainable one.
Successful cattle ranching involves good conservation practices which will enable you to grow more and better grass and run more and healthier stock.
You must learn to rotate your stock quickly through your pastures so that your grass has a chance to rest and grow in between grazing. Doing this helps create more profitable land.
Additionally, keeping healthy grassland improves your natural ecosystem and provides a successful wildlife habitat. Grass that is not overgrazed contributes toward healthier soil, cleaner water and less erosion.
5. Reduce Feed Costs with a Good Grazing Rotation Plan
Of course, your feed costs are very important considerations when thinking about making money ranching, and in some limited circumstances more grazing does not add up to less money spent on feed.
The key to saving money with grazing is establishing and maintaining a good grazing rotation plan.
For example, if you used to cut your own winter hay, you may want to consider using that hay pasture for grazing in the summertime. In the wintertime, keep your cattle on areas that used to be open summer range. This innovative way of managing your grazing is a simple way to maximize your profits.
When planning your grazing, also plan nutrition for your animals. You’ll want to rely on grazing for as much of the year as possible. Use feed and hay as a supplement not a mainstay.
Be aware of the nutritional value provided by your grazing. Understand that grass provides different levels of protein and other nutrients at different times of year. Adjust your feeding schedule accordingly.
6. Money Management is Important
You have to keep your personal and businesses debt to equity ratio low. Keep in mind that you must always be able to improve your property as needed. Effective grazing management means good fences, and fences are expensive.
Additionally, grazing management means developing water resources in each of your grazing areas, and this can be expensive. You want to always keep an eye on your personal and businesses credit rating by maintaining low debt in comparison with the value your property, stock and other assets.
When you have low debt, you are able to get the financing you need to make the adaptations and changes that will help you to make money.
7. Minimalist Ranching is a Money Saver
One way to keep your debt to equity ratio low is to maintain a very low overhead. Don’t collect a lot of equipment or build unnecessary facilities and buildings. Run a minimalist operation. Remember that cattle mostly just need good grazing and a safe and stress-free environment.
Whenever you have the choice, invest in stock rather than stuff. Keep in mind that running a larger herd actually saves you money in terms of manpower.
Maintaining, checking on and feeding a larger herd will take just the same amount of time and energy as performing the same tasks for small herd, but your potential for profit is much greater.
8. Choose Your Stock for Vigor
It is often very wise to combine two breeds of cattle to produce a hybrid that has a quality known as Heterosis (hybrid vigor). Combining two good breeds of beef cattle can produce excellent beef, very strong cattle and reduced veterinary and feed expenses. Know your animals and breed them accordingly.
9. Choose Your Bull with Great Care
If you are going to keep a single bull, make a sound investment in him. Remember that the bull is your seed stock provider. He may provide the genetic foundation for your entire herd. If you have a herd of good cows and one very fine bull you can reasonably expect excellent results for generations to come.
When you are producing strong, healthy cattle, you reduce veterinary costs and even labor costs. Healthy, contented cattle are less problematic to handle.
How Profitable Is Cattle Ranching?
Monitor every aspect of your ranching endeavor on a regular and ongoing basis. Negligence can result in disaster on many levels. Keeping a close eye on all aspects of your operation can help you catch problems before they begin.
Closely monitor:
- Animal handling procedures
- Rangeland conditions
- Yearling weight gain
- Pasture conditions
- Plant growth rates
- Pregnancy rates
- Stocking rates
- Calf weights
- Marketing
..and much more. Ranch operation and management is an exercise in juggling multiple irons on the fire.
Remember that it always pays to keep a close eye on your expenses and on your books. Review your expenditures and be well aware of your gains. If you are not making 50% profit on every dollar that you spend, you are not running a profitable business.
If you have a bit of time to learn more, check out this guide about ranching terminology.
Ranching used to be a profitable business in my hometown, but it is not dying gradually. So sad!