To a lot of farmers, especially startup farmers, the idea of custom grazing or livestock boarding sounds like a silver bullet. “Getting paid to raise someone else’s livestock as an independent contractor? Sign me up!” I custom grazed for my first five years in the grassfed beef business. This year I switched to developing owned heifers on grass. Custom grazing can be a lucrative opportunity for some graziers and herd owners, but it won’t work for everyone. It works for some as a long-term enterprise, and for others, as a short-term step toward a different goal.
Benefits of Custom Grazing For Graziers
I got into the custom grazing business for the same reasons that many young farmers do. A grazier can participate in the grass-based livestock industry without needing to spend or borrow a huge amount of money to buy animals. Revenue comes in on a regular basis instead of once a year. Custom grazed herds can be raised on owned or leased land, for all or part of the year. In some cases, crop and hay farmers can add value to what they grow by feeding it to custom livestock. Putting custom herds out on crop residues or cover crops can generate revenue where otherwise there would be expense or wasted opportunity for income. Farmers who specialize in different segments of production can work together to create a scaled, cooperative business. You can benefit from the advantages the other person has, fix the weak links in each other’s operations, and make farm management simpler.
To some degree, a beginner can learn with limited risk, under the guidance of an experienced herd owner. In this situation the owner must have more oversight and more influence over the grazier’s operation than is common. As the grazier becomes more knowledgeable and self-sufficient, they can take more control and the owner can become more confident in the grazier’s abilities. While custom grazing is not a partnership, it can give rise to a partnership or transition in ownership for a retiring owner’s business if both parties wish.
Benefits of Custom Grazing For Livestock Owners
For livestock owners, seasonal cropland grazing can be cheaper than keeping animals home eating harvested feed. Outsourcing a young or non-producing class of livestock (such as dairy heifers, dry cows, stocker calves or temporarily unneeded bulls) to a custom grazier frees up resources on an owner’s farm, allowing them to have more of the animals that directly make money. Using a custom grazier can be a great way for someone who doesn’t want to buy or run their own farm to participate in livestock production. It can also be a cheaper and easier avenue for the expansion of an existing farm, instead of buying more land, running more equipment and hiring more labor.
How it Worked for Me
My mentor and internship boss Greg Judy used custom grazing to restructure his floundering conventional farm into a successful holistic enterprise. When I came home from my internship with Greg in 2013, I rented my first farm and got started custom grazing a small herd of eleven cows for a longtime family friend. In 2015, I added over a hundred newly rented acres and thirty more custom cows from a second owner. That deal and those new leases fell apart soon after, as detailed in my “Boneheaded Beef Business Blunders” series over the past few months. But in 2016 I restarted with another 180 leased acres and 20 more custom cows from a third owner. Finally I had landowners and herd owners that I got along well with. My third custom herd owner decided last winter to retire from the cattle business. After handling his herd dispersal this spring, I bit the loan bullet and am now developing and flipping 100% grassfed heifers.
I don’t regret having spent my first five years custom grazing. As a beginner, it was just about the only option available to me outside of working as someone else’s farm manager. I was able to rent and develop leases out of my pocket, but I certainly didn’t have the money to stock those leases to their sustainable carrying capacity. I would not have been able to get a loan to purchase livestock because I had no experience. A six-month internship would not have been enough for a loan officer to take a chance on. This spring when I applied for my loan, I got it because I was able to show that for the last five years, I have run my own beef operation.
Getting five years of grazing experience under my belt, with the positive references and connections I got out of it, gave me credibility in the world of grass-based agriculture. I got the steepest part of my learning curve out of the way. I have done pretty well with not making the same mistakes twice. My confidence in my cattle management skills has grown enough for me to take on different ages and classes under different production plans. As my next article will cover, custom grazing didn’t lead to abundant profit for me. However, it kept me afloat financially through all of my beginner mistakes and startup expenses. It got me to the point of being ready to take the next step in my beef business.
Now that I’ve covered the reasons I got into custom grazing, my article next month will explain why I got out of it. For more help in deciding whether or not custom grazing will work for you, please check out my past article “Digging into the Business of Custom Grazing.”
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