Beef Continued from Page 13
them,” he said. Many California cattle ranchers earn most or all their income elsewhere, with the ranch only returning a prof- it some of the time. Eventually, all the bookkeeping gymnastics are exhaust- ed, and the true state of the business becomes apparent. The challenges discussed during the webinar are common among beef cattle ranchers everywhere, Macon said, but in California there is the additional problem of high land costs. “Access to affordable land looks like it is the primary challenge,” he said. “Electricity and district water costs are also a problem.” Ranchers said one cost-cutting option is to reduce land costs bymoving to areas that aremore affordable, such asNevada. “The mistake I made was not buying a piece of property,” Judd said. “You can’t buy land in Placer County now.” One note of caution was offered to would-be ranchers: Even if you manage to build a successful business, there are easier ways tomake a living. “If you don’t like living in the country, you don’t have to do any of this,” Davis said. “You have to like living in the coun- try, and you have to like the animals.” ( Bo b J o hn s o n i s a r e p o r t e r i n Sacramento. He may be contacted at bjohn11135@gmail.com.)
“I bought a $35,000 tractor and I thought I was nuts for buying it,” he re- called. “It paid for itself in two years with less labor costs and lower feedprices, be- cause I could buy larger bales. “You can only decrease your direct costs so much until you start hurting yourself,” Tripp said. “You can’t just raise the price—you’ve got to sell more of them.” Baser operates a ranching business withhiswife and four kids, specializing in themarket for showsteers andheifers. He saidhe learned that cutting losses early is more prudent than hanging on with the hope that animals will improve enough to meet the strict standards for his show steer business. “A mistake I made in our niche mar- ket was the quality of the animals we be- gan with,” he said. “We have decided if a mother cow is not producing good calves, she’s going toMcDonald’s.” One veteran rancher taking part in the webinar cautioned that if someone spe- cializes in raising purebreds, it may take 20 years to build enough of a reputation tomake any money. “We specialize in showsteers and show
Cattle ranchers seeking economic sustainability should do what they can to make their operations more efficient, but a farm advisor warns not to reduce investment in the business.
heifers,” Baser said. “But not every one of our animals is a show steer or heifer. We also need to be able to take our animals for sale like everyone else.” Macon suggested looking at reducing water costs by improving efficiency, or investing in fertilizing the pasture to pro- ducemore forage, as ways to improve the bottom line. In some areas, ranchers can supple- ment their income by getting paid for grazing a neighbor’s brush.
One strategy for balancing the books that will usually not work is to reduce in- vestment in thebusiness,Maconwarned. “If we simply reduce our direct costs, we’re probably going to reduce our gross revenue,” he said. It is also possible to save money by trading labor with a neighbor or, a common practice on family ranches, short-changing what you pay your kids for theirwork, whichMacon said is one of the short-term fixes that can’t last. “We borrow capital from ourselves and we also defer maintenance or fail to depreciate assets so we can replace
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