Being a proficient grazier does not automatically mean your farm will be profitable. Production of your livestock or crops is only half of the battle. The other half, farm business management, is equally important.
The traditional business structure of farming is self-ownership of everything: land, livestock and equipment. This does not work anymore! I am not convinced it ever really did. This type of business structure often cripples the farmer under a lifetime of debt. It makes him a sitting duck for disasters out of his control, like interest rate hikes, recessions, inflation and fluctuations in the commodity market. Most of the farmer’s assets depreciate, and the rest he is taxed on. A beginner farmer can absolutely forget trying to make it in this type of business, since getting started requires a loan the size of which approaches lifetime earnings! Under this structure, the only way to get into farming is to be born into it and inherit a bunch of stuff that’s already been paid off by your ancestors’ lifetimes of poverty.
How can an industry be sustainable if it’s impossible for new participants to enter it successfully? Agriculture cannot continue with just those who were born into it. We need new farmers! In order for new farmers to succeed, they must avoid the prohibitive costs of land, livestock and equipment. (Such overheads can be added in the future to make a farm operation more efficient, but scale of production must grow to a level that justifies overhead expenditures first.)
As a beginner farmer myself, I’ve been doing a lot of “outside-the-box” thinking to find business-structuring solutions that will help me be successful. They’re ideas that can help both new and established farmers break free from dead-end traditional business practices. The keys are to only spend money on the things you absolutely have to spend it on, and to use everyone else’s money, because there’s always someone who has much more of it than you do!
Let’s start with some ideas for reducing input costs:
Holistic, Low-Input Livestock Production
It may approach blasphemy in some circles, but I will say it loudly and proudly: you DO NOT NEED all the stuff “big agribusiness” is selling! World-renowned South African grazier Ian Mitchell-Innes advises that “if you’re about to spend money, stop! You’re about to mess up!” First learn to manage land and animals the way nature intended, and then stop buying inputs. The ancestors and wild relatives of our livestock have thrived without our help for thousands of years, so stop babying them!
It’s very important to get your management right BEFORE quitting inputs. Vaccines, preventative medications, livestock housing structures and high-nutrient feeds were created and popularized to cover up management deficiencies and unnatural practices. You can’t just yank these crutches out from under weak, poorly adapted animals that were bred and raised to depend on them and expect not to have a wreck. Read articles, go to conferences and pasture walks, and if possible intern on a well-run holistic operation. Smoothly transition your farm to low-input management. Then either switch your genetics or breed them up to something that’s capable of thriving without your help. The livestock should do the work on your farm, NOT YOU!
Build Your Herd for Free Through Custom Grazing
Custom grazing is the practice of getting paid to raise animals that someone else owns under the terms of a contract. This is good for livestock owners because they can expand their herds without taking on the overhead of more land and labor. It’s good for custom graziers because they make money without a huge capital expenditure for buying animals. There is also a great opportunity for the grazier to get paid partially or fully in livestock from the owner’s herd rather than in cash. This is how you can build a herd of your own cattle without buying any! I have figured out after countless hours of spreadsheet projections that you can’t pay for both hay and a herd-buying loan payment and still have anything left over.
(Almost) Free Use of Equipment
Learn and use low-labor holistic management to cut down on machinery usage. For example, buy stored feed instead of growing it yourself. Bale graze instead of using a tractor every day to move hay out of storage and feed it.
It might make sense for you to own certain things, as long as you use them constantly and the scale of your production justifies the expense. For occasional work it’s far more lucrative to hire a neighbor or contractor, or to borrow machinery, than it is to own it. You only have to deal with it when you need it, and it’s very rare that you will be responsible for paying for repairs (unless you break it). Custom harvesting companies or neighbors can bring your crops and hay in. There’s building and excavating contractors everywhere, and pretty much every other farmer on Earth owns a tractor. If your friends don’t own what you need, a rental company will.
That’s just a start on ways to reduce input costs and get started with fewer expenses. Next I’ll be looking at how to find land and use pasture without breaking the bank.
You can read more about Meg and her work at her website.