Small Scale Operations Can Be Profitable – Here’s How

I often hear from people operating on a smaller scale that their limitations of size make it impossible for them to be profitable. “I only run 12 cows and operate on 30 acres. I can’t possibly be profitable!” The limitations to profitability are usually self-induced. When we look inside this operation what we will likely find is that they are ranching entirely on owned land, choosing to run 12 head of breeding cows and wanting to own all the stuff a typical rancher would own. No wonder this operator feels like they can’t be profitable. Here are some considerations for those choosing to operate a smaller scale ranching business: Cows are a rich-man’s hobby If you are going to choose to run cows, keep in mind that your competition will be every doctor, lawyer, accountant or other independently wealthy person who just enjoys running cows. They don’t have a profit motive and are willing to sell at a loss because they enjoy running cows. They are likely selling into the same market you are. On a long-run analysis, owned cows are usually the least profitable enterprise to run. Of course, there are always exceptions, but unless you have an unusual competitive advantage, you might reconsider cows as the enterprise of choice. Cows consume an enormous amount of feed per dollar of revenue and usually lend themselves to one marketable product a year (weaned calf). Also taking into consideration the bulls, heifers and other support enterprises that most choose to have on

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2 thoughts on “Small Scale Operations Can Be Profitable – Here’s How

  1. RE: “Running smaller groups of animals makes it difficult to practice good grazing management.” If you are retired, it’s not so hard, in my experience.

  2. We custom rotational graze cow/calf on a legume/grass mix. Cattle owner wants to bring ~#500 calves next spring. That should increase profitability as per unit/day price will be the same.

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