A SPECIAL PRODUCERS’ REPORT OF AG ALERT ® C A L I F O R N I A Dairy & Livestock ®
Cattle ranchers need to invest in their businesses in order to make their operations economically sustainable, according to ranchers and a University of California farm advisor who participated in a webinar on the business of beef.
Ranchers discuss how to survive in the beef business ByBob Johnson
Management and Beef Cattle Nutrition. He suggested that variable costs for feed, vaccinations and medications, ear tags and marketing should be no more than 30% of the revenue received by a cattle busi- ness, with an additional 50% going to fixed costs including land, labor, depreciation and maintenance. “Inag, youwant tokeep20 cents after all your fixedandvariable costs arepaid,”Macon said. “There are specific things we can look at when our business is not profitable.” The ranchers taking part in the webinar offered advice about where to look if the animals are healthy and growing and the pasture grass is productive, but the business is not hitting that 20% target. During the course of his life as a foothills rancher, Davis said he has focused on the value of investing in genetics. “Back in the 1990s, if I weaned a 550-pound calf I felt pretty good,” he said. “Twice in recent years, I’ve weaned 825-pound calves. The difference is mostly genetics. ... It costs more but it pays off.” Investing more into the business, if it is done wisely, can be a good strategy for bal- ancing the books, Tripp said.
For cattle ranchers looking to succeed in their tough business, building markets and investing wisely in equipment or genetics can be as important to success as caring for the animals and the land that produces their feed: That advice was offered by veteran foothills cattle rancherswho tookpart inawebinar onBeef BusinessBasics sponsoredby University of California Cooperative Extension and the Tahoe Cattlemen’s Association. “Marketing is one thing most people don’t pay attention to,” said Judd Tripp, who ranches in the Lincoln area of Placer County. “One thing I’ve learned ismarketing,” he said. “I want to knowwhere I’mgoing to sell themand howmuch I can pay before I buy them. When I started selling on the futures market, I took as much risk out of it as possible.” Tripp and fellow ranchers Jackie Davis and J.C. Baser offered their advice andwarn- ings on the business during the annual series on foothills beef, whichwasmoved to the internet because of COVID-19. “Sustainability includes the environment and the community, but it all rests on a foundation of economics,” said Dan Macon, UCCE livestock and natural resources advisor in Placer, Nevada, Sutter and Yuba counties. Macon, who is also a commercial sheep rancher, organized the webinar series that included, in addition to Beef Business Basics, sessions on Cattle Health, Grazing
See BEEF, Page 14
March 24, 2021 Ag Alert 13
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