Saturday, December 22, 2012

Why don't you own all of the cattle on your feedyard?

This is a continuance from the blog Are all those cattle yours?

I was doing an interview for a magazine the other day about raising beef.  This I believe is the first interview I have done with a writer that doesn't regularly write for production agriculture magazines.  She does however regularly write articles about farms that sell a majority of their products through farmers markets and other local markets. During our first interview she asked many questions that would be answered by someone who sells local and directly markets a majority of their crop or livestock to a consumer.  I really was unable to tell our story from that view point.  I don't know much about the consumers of our beef, because much of our beef is marketed to places like Tyson and Swift.  I sometimes imagine a single mom that works 40 hour weeks and stops by a local grocery store to pick up some burger to make spaghetti for her two children while they do their homework.

However the interview continued with some really thought provoking questions for me, about raising beef. As the interview carried on she asked me a question that usually emerges.  Why don't you own all of the cattle on your feedyard?  The answer is simple, money.  The dirty five letter word know one wants to talk about in agriculture. While animal care and and well being is on the top of the list for all consumers these days, an idea has emerged that if you don't own the animals you can't possibly care about them.  This is simply, just not true.  That idea is false in the same way that a babysitter will not take care of your children, because they are not hers.  Good people always do the right thing, it is part of who they are.

The money issue can best be explained with simple math . . .

The feedyard holds about 3000 head.
On average each animal is worth @ 650lbs x $1.60 =  $1040.00 per animal.
The cattle alone would be 3,120,000 dollars.

Although Jake and I have worked with two outstanding bankers on both sides of the Mississippi River in our lifetime. They both have been wonderful mentors, working with us to make our dreams come true.  We also have been told no a time or two, mostly for our own good. An example of this would be if we asked for a loan to buy 3,120,000 dollars worth of cattle.

If you did own all of these cattle you would also have a feed bill per pound of gain, per calf . On average a feed bill per pound of gain, per calf will be $1.25.  With a simple math equation (hoping their average gain will be 3.5 pounds per day) we can estimate your calves will cost you $4.38 per day, per calf. In this example we will say you bought these calves at 650 pounds and sold them at 1350 pounds, that would be a gain of 700 pounds. We will say that was accomplished in 200 days.  That would be a feed bill of $875.00 per animal.  This math would lead you to a total feed bill of $2,625,000.

In conclusion, until we build our credit (get old) or win the lottery we are unable to own all those cattle. However it is important to understand that no matter how many cattle are in our care we will continue to care for them in the same way we would if we did own them. We understand the investment and importance when it comes to animal care.

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