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

The cattle market is in the toilet. The future looks even worse. Calves bring only one-half of what they did a couple years back. Stocker margins are negative, feeders too. The American cattle industry is on its knees, broken and busted. Is this the end? Well maybe, at least for some folks. A better question might be this: who will survive this Armageddon, and how will they do it? This spring I hosted a pasture tour for my local grazing group. Our meetings are often raucous events and the discussions are free-wheeling. The group is made up of many independent-thinking individuals and the questions are sometimes hard. As we walked the fields looking at grass, fencing and water, I explained that my basic philosophy was to constantly work to lower both my overheads and my direct costs with the fundamental goal of achieving a zero-input ranching model: one that functions on sunshine, rain and management, with no outside inputs. Imagine my surprise when this idea was met with skepticism, including one basic question: “Why?” As in, why, with all of the obvious production advantages offered by soil amendments, irrigation, cover cropping, protein supplements, why would I simply say “no” to inputs? I have to admit, I was a bit taken aback. My belief in low input ranching has evolved over a long period of observation and study, and it has become so much a part of my mindset that I no longer even question whether inputs might be a good thing. I simply assume t

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4 thoughts on “Who Will Survive Low Cattle Prices? Those With the Lowest Inputs

  1. 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.

    1. 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. 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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