Now that you know some of the crucial factors to decide before purchasing your first herd of cattle, it’s a good time to look into the specifics of a beef operation. If you recall the first piece in this series Beginner Rancher Guide Part One, determining land and operation type should be the first details you nail down. Now that you are familiar with the difference between producing and feeding out cattle, as well as land restrictions, it’s time to look into the finer details. This includes what kind of breeds you should be looking into and how to budget for your operation.
DON’T QUIT YOUR DAY JOB
When it comes to many operations, I have been told time and time again to start small and have an off-the-farm job to help balance out the expenses that inevitably come with a farm. Obviously, this depends on how large your operation becomes and how much time you have to put into your farm. Purchasing a few animals at a time could keep you from being overwhelmed or in a tight bind financially.
Another piece of advice of experienced ranchers is to buy used. This is referring to equipment obviously. Tractors, hay rings, fencing supplies, etc., are all things that might be able to be purchased at a discounted price. Buying new items will most likely require a financing option, but buying used might be able to be done in cash. If you have a mentor or source that will allow you to borrow supplies until you can purchase your own, this could be a viable option as well. Buying as much as you can in cash will also help you in the long run. There are loans and other financing options available, although not ideal.
LOANS
The Farm Service Agency(FSA) is a great resource for loan options. There are local offices in every state, so be sure to look into the closest office to you! This USDA agency provides many loan opportunities, from microloans to beginner farmer and rancher. These offices will answer any questions you might have regarding your loan options, so even if you aren’t applying currently, it’s a great resource. Be aware that this option does require a lot of paperwork and doesn’t happen overnight.
Banks will also provide loans, and I have been told they are quicker. However, they can be more difficult to qualify for. If you are interested in a loan, be sure to compare the options you have in order to find the best fit for your operation and financial plan.
There are state opportunities for beginner farmer and ranchers that help to provide funding. For example, The Montana Department of Agriculture offers grants for beginner farm and ranch loans. While not every state may have this option, it would benefit you to look into what options there are.
BUSINESS PLAN
Loan and grant opportunities might require a business plan before approving a farmer or rancher but it’s still smart to have one regardless if you are applying for a loan or not. While creating a template for your own plan might be time-consuming and complicated, there are many options if you do a simple google search can give you a guide as to what to include in your own plan or provide a template for you to follow.
It’s important to include how profitable you plan to be when you plan to see cash flow, how much capital is needed for investing, a mission statement explaining what your plan is and clear goals that are “S.M.A.R.T.” Specific, Measurable, Attainable, Rewarding and Timely.
A good business plan details the profitability of a business. What will the cost of labor, repairs, and operating look like? What about depreciation or long term costs of equipment and breeding stock? All these need to be looked at in order to tell if you can be profitable, and when you will be, in your operation. If any of this seems overwhelming to you, be sure to talk to your extension agent or mentor to help guide you in the right direction. Remember, no two operations are the same, so use what works best for your operation.
BQA AND MBA CERTIFICATION
Especially if you haven’t grown up in the industry, knowing how to humanely handle cattle is the most crucial part of having an operation. These animals are how we feed the world and make a living, so their care should be of the utmost importance. The Beef Quality Assurance program will help you become certified in whatever operation you have so you know how to handle injured animals, how to administer vaccines and behavioral characteristics of cattle. While it’s a huge debate between producers, there can be premiums paid to producers who are BQA qualified. Regardless, the program is free and is only a tool to help improve your operation. You can take it online, or register for an in-person class if it is offered in your area. This is a 3-year certificate, so be sure to update it when needed.
Another certificate that is useful is the Masters of Beef Advocacy program. This is a great tool in learning how to advocate the beef industry- something I feel every producer should participate in. With social media being a large factor, on both the advocating and marketing side, it’s good to be able to relate to your audience and understand the basics of the product you are growing. This is an online certification that is very quick to complete as well and is a go-at-your-own-pace class. This will also allow you to join the Master’s of Beef Advocacy group on Facebook, which is a great resource for producers and advocates.
BREED SELECTION
Now that I have covered the important aspects of beginning a beef operation, it’s time for the more fun part- selecting a breed. Of course, as with most areas of a beef operation, this is heavily dependent upon what type of operation you want and what your location is. Weather and local markets drive the demand for beef in your area, so knowing what kind of cattle do best is a smart business decision. Black cattle are known to do the best in almost any location but aren’t necessarily heat-tolerant. Hereford cattle are more heat tolerant but don’t carry the same market value as black hide cattle. Brahman cattle do well in the south because they are heat tolerant and there is a pretty good market for them. There are many breeds to choose from, Hereford, Angus, Simmental, Limousine, Chianina, Longhorn, Brahman, Gelbvieh, Shorthorn, Beefmaster and Charolais are all very common in America. Looking into their heat tolerance, carcass quality and marketability are only a few of the factors you should be considering.
If you want to have your dream breed of cattle, by all means, do it! Just understand that it could affect the price and profitability of your cattle and may not be a sustainable business in the long run.
Purebred
For purebred operations, cattle are pedigreed and are meant to improve the genetics of the herd. They are registered through an association, like the American Hereford Association, and the bulls have EPD’s(Expected Progeny Differences). These EPD numbers are helpful because they predict things in the offspring like birth weight, weaning weight, and other important data that will help you in choosing the right animal for your herd. In this operation, you’ll be doing a lot of research on which cattle to breed to, what semen or bull to buy, and you’ll have to make sure you are organized with all records and paperwork(as with any successful business) and EPD’s are just as important. EPD’s are highly statistical and might be complicated, so be sure to do your homework. You’ll see these numbers in sale books at stockyards and can find a lot of information about a bull online. WW, BW, and Marb ACC are examples of what weaning weight, birth weight and marbling accuracy will appear as on an EPD chart.
Commercial
In a commercial operation, cattle are crossbred to build hybrid vigor. This means that the offspring of a crossbred cow are superior genetically to their parents. This allows the strengths of both breeds to show in this crossbred calf. There are black baldies, which are cross-bred by black Angus and Hereford cattle, a common cross in the industry. There are also Charolais crossed with Angus. The possibilities are endless and can increase herd performance- but, as with all other aspects of a business, be sure to do your homework on which breeds cross well and will do best in your area. This is where being a part of a Facebook group will allow you to see what others have done for their herds. Commercial cattle can still have EPD’s, but it’s not as common and might require more work to keep track of. Commercial cattle are highly sought after and very valuable.
GRASS FINISHED VERSUS GRAIN FINISHED
This is such a hot topic in the industry. Which is healthier? which is more marketable? Well, grass-finished cattle certainly are having their moment and there is a niche market for these. Generally speaking, you know your cattle have grown up mostly on pasture. Feedlot cattle spend about 180 days on a feedlot before being processed, so the majority of their lives are on pasture(aka, grass-fed). It all comes down to how you want to market them. This also includes all-natural and organic beef. There are regulations to follow in order to meet certain labeling types, and it’s important to know what you want to market your cattle as and follow those guidelines.
Grain finished
Most beef is raised and marketed as grain-finished. They spend the majority of their lives on grass or forage and will spend the last 4-6 months of their lives at a feedyard eating a high-quality diet of grains, local feed like almond hulls, hay and/or forage. Most of these animals are separated by their dietary needs and are monitored to ensure they are healthy. These cattle can, but aren’t always, given USDA-FDA approved antibiotics in order to help treat, prevent or control diseases. They can also be given growth-promoting hormones.
Grass-finished
These cattle spend their entire lives on grass or forage but may spend their time at a feedyard eating a diet of the aforementioned items as well as silage and hay. They also can be given approved antibiotics and growth-promoting hormones.
Certified Organic
These animals can be either grass-finished or grain-finished, so long as all feed is 100% organic. They also cannot be given antibiotics or growth-promoting hormones. They can still spend time at a feed yard.
Naturally Raised
These cattle are the same as the above group, except they don’t need to meet any organic regulations.
It’s important to know how you will market your cattle because these labels will require that you follow specific rules and regulations. These practices can change your operation and how it is managed. There is usually a process to becoming USDA approved in certain labeling, and being able to legally market your cattle as such. We will discuss this in the next series!
CLOSING THOUGHTS
You still have lots of homework to do before you are ready to buy your first cow, calf, steer, heifer, or bull. Financing is the biggest part and probably the largest hurdle to jump. Not everyone will qualify for a loan, so starting small and building slowly will give you room to make mistakes and learn as you go. Having a business plan will always be helpful and is a great way to visualize the goals you have for your operation. Then, select a breed that fits your lifestyle and market. We will be discussing how to market your cattle and other basic health management needs in the next part of this series.
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