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Who Will Survive Low Cattle Prices? Those With the Lowest Inputs

By   /  October 24, 2016  /  4 Comments

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The cattle market is in the toilet. The future looks even worse. Calves bring only one-half of what
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  • Published: 5 years ago on October 24, 2016
  • By:
  • Last Modified: October 24, 2016 @ 10:28 pm
  • Filed Under: Money Matters

About the author

John Marble grew up on a terribly conventional ranch with a large family where each kid had their own tractor. Surviving that, he now owns a small grazing and marketing operation that focuses on producing value through managed grazing. He oversees a diverse ranching operation, renting and owning cattle and grasslands while managing timber, wildlife habitat and human relationships. His multi-species approach includes meat goats, pointing dogs and barn cats. He has a life-long interest in ecology, trying to understand how plants, animals, soils and humans fit together. John spends his late-night hours working on fiction, writing about worlds much less strange than this one.

4 Comments

  1. Dean Choat says:

    I don’t disagree with what you are saying, but what if land costs are higher? Right now I would love to find pasture as low as $50 per AUM. Your $10 to $20 per AUM would be a dream where I live (northeast Nebraska). The higher land costs seem to force us to use inputs to create enough return to overcome the initial cost of land.

    • John Marble says:

      Thanks Dean.

      At the risk of sounding flippant, I do not believe it is my job to overcome high land costs. Where I live most pasture land sells for $10,000 to $20,000 per cow unit. I do not believe there is any way for me to overcome that kind of cost. Closer to home, I would ask you to consider the model you are currently struggling with: if an AUM costs $50 and it were possible to run outside with no feed or other costs, your annual grazing costs alone would be $600 per cow per year. This seems like a very difficult model, maybe impossible.

      My job is to find situations where my cattle can graze at a profit. I may not be able to compete with avocado growers or ethanol croppers or hemp farmers for the most desirable land. I believe the advantage that cattle present us with is the ability to use undesirable, low-value land to produce red meat on the hoof.

      As agriculture becomes more competitive (and also has to compete with other industries for land), I believe ranchers will need to adapt, becoming scavengers who roam the countryside looking for cheap forage and land that cannot be used by other producers.

      Not very romantic, but the fact is, $1.00 calves will not pay much rent or mortgage.

      Finally, I would advise using an extremely sharp pencil to analyze the true economic outcome of using chemical or physical inputs to make a ranch budget work. Increased production is different from increased margin.

      Sincerely,
      John Marble

  2. Ben Starr says:

    Who Will Survive Low Cattle Prices? Those With the Lowest Inputs

    Very good article!!

  3. Richard Moyer says:

    When I preach the importance of reducing off-farm inputs, this from my 12-yr old, who cares for our 150+ chickens, ducks, turkeys and geese:
    “Dad, why are we paying others to haul and spread chicken litter on our pasture, when we need to clean out our own poultry house?”

    My answer: “If the WE part of cleaning and spreading includes you and your siblings, we could do that.” So we’ve begun last two years, spreading litter areas of fields where lime and fertilizer trucks don’t reach. Forage production is up in those areas…and the roof has been raised in our poultry house!

    We have the average cattle herd size for the state of VA. For what it’s worth, demand for beef by the cut at our farmers market has held steady the last two years. Even with several more beef producers joining us in that time. But one needs to be willing to hear about customers’ dogs, motorcycles and other loves while making such sales…for those wanting a relationship with farmers growing their foods, price can be a secondary matter.

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