Egon, Yes...and if the boatman wanted a tip after rowing across, the mathmatician would probably suggest something along the lines of making the his trignometric substitutions prior to simplifying his interals.
[img]/forums/images/icons/smile.gif[/img] Pat [img]/forums/images/icons/smile.gif[/img]
"I'm not from your planet, monkey boy!"
Think mayhaps Sharron always demanded a piece of silver prior to the final embarkment. [img]/forums/images/icons/grin.gif[/img]
Egon
Egon, That is Charron who rowed the Styx. I think I know the Sharron to whom you refer and you are right. SHE always demands silver up front.
[img]/forums/images/icons/smile.gif[/img] Pat [img]/forums/images/icons/smile.gif[/img]
"I'm not from your planet, monkey boy!"
Hi Dave,
Some good information in this thread and some that might need to be reconsidered.
There is a fellow who lives in Northern Missouri, named Greg Judy. Greg was all but broke a few years ago and managed to financially save himself and grow his operation using leased land, grazing contracts and some other innovative ideas. He wrote a book about his experiences titled, "No Risk Ranching, Custom Grazing On Leased Land." From your description of your situation, you might find his ideas worthwhile.
In today's cattle business it is important to recognize the forces that work for you and those that work against you. Small producers not only have to think differently than their forefathers, but must also be totally focused on operational costs. I once heard an oldtimer tell a young new vegetable farmer that he'd better know where he was going to sell his tomatoes and how much they would cost to grow before he ever put the first tomato plant in the ground. That was good advice for the vegetable farmer and I've used that rule of thumb in my cattle operation. If you don't know what your operational costs are and where and how you intend to sell you cattle, then these days you best not be in the business.
There are major changes now taking place in the beef industry driven by Tyson, Cargill, Dupont, Monsanto and most recently Smithfield. In short, the strategy of the big corporate packers, their captive feedlots and suppliers will soon do to the beef industry what Tyson did to the chicken industry and Smithfield did to the hog industry. That is, turn small producers into serfs on their own land with production contracts that only favor the big guys.
Like Wal-Mart, these big outfits make their money on the buy side, not on the sale side. In short, they drive the margins so low on the producer that he can't survive. When he goes under, they go find another sucker. The recent $1.28 billion dollar judgment against Tyson, the establishment of R-CALF, ICON (in Nebraska) and other groups attempting to save the independent cattle producer all indicate the incredible forces that are driving the small producer and family farm out of existence.
Also, don't be surprised at forthcoming changes in government subsidy programs that will seek to eliminate farm subsidies. Further, look for increased levels of imported beef and stringent efforts to keep COOL from becoming reality. Big producers don't want consumers to know where their beef is coming from. For some interesting background information on all this you might want to check out Mike Callicrate's website www.nobull.net . Some folks may think that Mike is a raving mainiac. He's not. He's an independent producer who has stood up to the big corporate cattle outfits, at great personal expense, and is more than just the canary in the coal mine.
So, how does all this relate to your question about feeder steer margins? If you think you will make money putting 500 weight calves on in the spring and taking 750 weight calves off in the fall, I'd suggest you may not want to do that; especially this year. $1.20 calves in April that sell for $.80 in October won't make you much money.
If you winter them and feed hay that was rolled at a cost that results in $.42/day per critter you probably won't make much either trying to get them heavier. My rotatioinal stockpiled grassfed costs average $.04/day per steer. I only have to feed hay a few times a year. The climate and terrain in Central Missouri may offer you the same advantage. I don't think it'd work in Oklahoma or the other Great Plains states. I'm originally from Nebraska and most winters are usually just too tough for year round (360 days) grazing.
However, the cost and time of getting pastures to the required quality level will take a few years. In addition, the investment in your infrastructure should also be viewed as a sunk cost. The business decision becomes, you're either in it or you're not. If its only a hobby or supported by a day job then perhaps it's something different. In my experience you should plan on 2/lbs ADG, and then smile when your cattle begin to average 3-4 lbs ADG.
It is my personal opinion that the USDA is mostly staffed and controlled by Tyson and friends appointees. The entire USDA system is geared toward big time operators. Most sale barns in this part of the country are becoming gathering places where Tyson, et al buyers show up with numerous trucks looking for POT loads to haul to the feedlots in Pennsylvania, Kansas, Nebraska, Colorado and other places. It appears that sales are more and more being made at pre-agreed prices. Private treaties and contracts are also on the increase. This is no place for the little guy.
What then might you do? The only way you can really make any money is to add value to your cattle at every step in the production process and know what that added value costs you. If you think you can compete with the big feedlots at $2.00/bu corn, I suggest you think again. The big feedlots will outdistance you with their volume of grain. They have the economic advantage, even if you grow your own corn. The equipment and fuel costs at the small producer levels are prohibitive.
Adding value might even include, slaughtering and marketing your own beef. There are some risks in carrying the cost of your own processing, mostly on the marketing and sales side. I think there was a small co-op in Kansas a few years ago that learned that lesson. However, high quality beef products will sell and this includes the lesser cuts and hamburger.
You might try building a herd of high quality momma cows with emphasis on supplying backgrounders or stockers to independent feedlots that cater to non-traditional consumers, such as snooty restaurants and quality branded beef products.
If you are thinking about taking your feeders to finish weight, there are some folks around you who are in the grassfed beef business. However, some folks have had problems properly finishing beef on grass, mainly because they don't do it right.
The beef producers in Argentina know how to raise and produce high quality beef on grass. For the most part, we don't. Why? Because we still follow the same old model of harvesting cattle in the fall. Wrong time of year to harvest grassfed cattle. Grassfed cattle put on fat when eating fresh grass. That's during the spring and earlier summer in the US. So, if you intend to harvest grassfed beef at 18-24 months then the planning cycle needs to plan the harvest for the May-June time frame. Not in the heat of the summer and not in the fall. Cattle don't marbelize their fat on dead grass. You may want to read some of the work by Dr. Anibal Pordomingo, from Argentina, about what it take to raise grassfed gourmet beef. This is another example of thinking differently from the traditionalists. We don't know all there is to know about raising cattle. We tend to let our arrogance and pride get in the way. My message is to take good successful ideas anyplace you can find them if they work and earn you a profit.
Some folks claim that grassfed beef is only a niche or specialty market. True, when compared to the big guys, but its a continuously growing niche. Also, grassfed cattle don't get BSE. And, if you try to only sell to local neighbors and friends then you may not do very well. On the other hand if you think outside the box and sell to specialty restaurants and chefs looking for premium products you can do quite well. A friend of mine in the Northeast is selling his grassfed premium beef at an average price of $4.00/lb on the hoof and the customer pays the kill fee. That is not an unrealistic price. In fact, $4.50 -$5.00/lb are possible in some markets with no hassle. There is a specialty restaurant in San Francisco that serves only grassfed beef, can't get enough and is looking for additional producers. But be forewarned the standards of such places are usually quite high. On the other hand the pay quite well. Paying $4-$5/lb for premium beef isn't too much when the restaurant sells individual steaks at $25-$30 each.
One final reference you might be interested in was written by Jim Gerrish who used to live in Missouri, moved out to Idaho a while back. Jim's book is titled, "Management-Intensive Grazing, The Grassroots of Grass Farming." Both Jim Gerrish and Greg Judy write from actual hands on experience, and not theory, and their writing reflects the knowledge of their experience.
I didn't mean to ramble on so much and don't know if this helps or not. But I think small producers can be successful by thinking smarter, making adjustments and doing things differently and in ways the big producers can't or don't want to do.
Ed
Did you hear the pin drop?
Edward,
Amazing post. An articulate view on the cattle business, that brought a lot of things I have been reading and hearing from my fescue/steer feeding friends (and feeling in my gut) into focus. I appreciate ALL the views that have been put out on
this thread (except the math hijackers LOL) but yours hit closest to where I'm at.
Questions
I assume when you say "stockpiled grass", you are talking about a rotational system that leaves some pastures cured on the ground.
When you say "getting pastures to the quality level desired", are you talking about rotations,manuring, etc or conventional fertilizers.
Is ther material on the Argentine methods?
I looked into this deal hoping to break even, live in the country, and keep busy.
When I began to study the auction reports, just to get a feel, I knew I was in trouble. Trying to do what experienced guys are losing money at.
I found 2 of Joel Salatin's books at a used book store. I ordered an ACRES magazine book catalog. Greg Judy's book is one I had circled to order. Will try to find the Gerrish book.
My plan, as I had started this thread has changed. I haven't even moved there yet, but I have orders for 9 halves of grassfed beef. The customers agree to take them at the end of the summer, pay $.25 a pound live weight over market that day and pay the processing. That's not much of a deal, I know, but it's a start.
I'm want to do the heavy rotation, "chicken tractor" to keep down the flies, feeder pigs to clear some land in small chunks.
I'm going to run their cattle on the balance of the place(with their supervision) and if mine grows, then we'll cut down on their part. I need to run a 100 yd strip between mine and theirs and keep it fenced well to keep my calves "clean".
Anyway, that's my story..............
Dave
On edit
The small farmer ABSOLUTELY HAS TO COME BACK. And make a good living doing it. If it takes years, even generations, so be it. My personal opinion is, it will contribute to the healing of the land.
Dave
Dave,
Good post. I wish you luck. I enjoy it and I'm sure you will. Boys never get too old to enjoy playing in the dirt!
TK
Dave,
The term "stockpiled grass" refers to pasture forage that is allowed to regrow, usually starting in late summer, until frost. This forage is considered "stockpiled" and is generally strip grazed in the winter months. The forage retains much of the nutrient value and is easily found by cattle even when covered by snow. The cattle will search a few inches below the surface of the snow and follow the forage downnward to the ground. Stockpiled forage reduces, and in a few cases, eliminates the need to put out winter hay thereby lowering costs.
When I talk about getting pastures to a high quality level, I am thinking not only about rotation cycles, weed control, moisture levels, manure management, but more specifically about grass and legume mixtures. For example, you mention having fescue pastures. Well, much of the fescue in this part of the country has a problem with endophyte. The endophyte is typically found heavily concentrated in the seed head of fescue. Endophyte can cause excessive overheating in feeder and stocker steers and aborted calves in cows. Have you ever noticed how cattle on fescue pastures seem to want to spend a lot of time during the summer standing in the pond or creek or stay in the shade. The reason is that very often the endophyte has caused their body temperatures to rise to a very uncomfortable level and they are more interested in getting cool than in putting on weight.
A couple of ways to help control the endophyte problem is to clip the fescue and never allow seed heads to form. Also, if you plant about 5% or so of legumes (e.g. Patriot clover), the legume will mix with the fescue in the rumen and reduce the overheating problem. Also, by planting perennial rye and winter annuals you can extend the length of time that fresh green grass is available to your cattle. Around the first of August if you lightly broadcast a little bit of nitrogen on your pastures, the stockpiled forage will grow better. The fescue will not put out a seed head before it goes dormant, but will be available for winter grazing. Sometimes, you may find it necessary to feed some supplemental hay in September and October while your paddocks are stockpiling. Your neighbors will think you're nuts, but that's ok, because you're thinking and working outside the box.
Joel Salatin lives about 40 miles from me here in Virginia. Joel is definitely a guy who thinks outside the box. He's an innovator, breaks new ground all the time, has a highly successful farming operation, and writes a lot of stuff. Sometimes I think he's a driven man, and some people think he's too much of a self-promoter. But, one cannot argue with his success and the money he's putting in the bank. I know he has modified his operation somewhat in recent times and consolidated and changed, but again he adapts to what works for him. You have to admire someone like that.
In fact, you would probably do well to subscribe to The Stockman GrassFarmer published by Allan Nation. Joel contributes a lot to SGF as does Dr. Anibal Pordomingo. In the March 2005, Vol 62, #3 issue of SGF, Joel has a very interesting article outlining how to use pigs to profitably create pasture from cut-over forest lands. I think SGF also offers an anthology of back issues. They've been publishing since 1947 and I've enjoyed every issue of their publication. Several good books also sold through SGF. If you want to spend a few bucks, SGF can be reached at 1-800-748-9888.
I know there have been several articles about using chicken tractors, follower pigs, etc. in different issues of SGF. Also, Joel puts on an annual two-day seminar at his farm about how to do what he's doing. Might be worth attending.
Hope this helped. Good luck.
Ed
Edward,
You are right on with rotational grazing. But the one thing you didn't mention is time. If a person has the time it's a great thing. But it does take a significant amount of time and money to do. No doubt a great thing to do.
As far as cattle selling I personally believe that is a little off. I would have to see a $4-5 on the hoof contract to believe that. Carcass weight yes but not on the hoof. Also to even meet a small successful restauarants demand takes ALOT of beef. Most restauarants will not deal with you unless you can supply 20-30 head per month. On a good night a busy restaurant will go through one or more head of steaks!! Many of the finer restaurants only buy the steaks. The good steaks only represent maybe 10-15% of weight. The other 80% is made into hamburger, roasts, etc. That hamburger is sold to lesser restaurants that sell alot of hamburgers.
Also in order to get your steaks to those kind of restaurants you need some high power genetics to get those good steaks. That takes alot of sire and dam power. You don't just take a crossbred steer that you pick up from the sale yard for $1/lb. and raise it into prime beef. You have to start with prime beef to get the prime beef.
We do a very good market with our registered angus. But even as good as our genetics are only a portion of them will go to our restaurant buyer. They are very particular about the beef that they take.
Hi Cowboydoc,
Some folks have looked at the time issue related to rotational grazing and several things were observed. Actual total time is less than one might think. The amount of time required to cut, roll, and haul hay is fairly high, especially if someone is taking three cuttings. Not to mention the ever increasing cost of fuel and equipment. Also, finishing cattle in a feedlot can be very time consuming and is expensive. You can lose your shirt and your pants keeping fat cattle on feed in a feedlot waiting for the market to go up. Loading feed, supplements, putting out hay, etc. takes a lot of time. I can vouch for that, because we used to keep an average of 500 head of fat cattle through the winter and it took a whole lot of time to feed them.
You are correct about the investment costs associated with installing good paddocks. I've been building and improving my paddocks over the last three years. My input is to not try and get by with old broken down fences, gates, etc. You'll spend too darn much time fixing fence and chasing cattle with old worn out fences.
If someone can't afford to put in all new fences, then at least run an electric fence inside the old fence until the old fence can be replaced. I also allow extra footage around the outside of my fences and keep the fence lines clean with regular maintenance mowing. I never understood why someone would go to the trouble of building a new fence, let everything grow up into the fence and have to replace it in five to ten years. By keeping the cattle off of the fences and keeping the brush and weeds cut, the fences last a long time. Well maintained fences should last 30-40 years.
Clearing land, putting in culverts, waterways, fences and watering systems is not cheap. This afternoon, a tractor trailer unloaded a bunch of fence material here. I could have bought a new truck for what that material cost me, but its an investment cost. I will suggest to anyone preparing to put in paddocks to completely layout out your plans, calculate your material needs in terms of wire, hardware, and posts. Then submit your requirements to various suppliers as a request for bid and let them quote you a price. Don't just use the local co-op, look for suppliers around the country.
I submitted a request for bid to several suppliers and provided them a reference price per item that I wanted to meet. All responded and the difference in costs was significant. For hardware costs alone, there was an $1,800 difference between the high response and the company that won the bid for the same exact items. The winner also provided free shipping. Same kind of negotiations are possible for posts. A local supplier wasn't competitive with his price until I told him that an out-of-state supplier was 20% lower in all sizes and shipping was free. He re-considered his quote and was suddenly 10% lower than anyone else. Same idea applies to squeeze chutes, alleyways, tubs and sweep gates. My point being that by negotiating good prices on material costs, you can lower your overall investment and operational costs. After all, its your money. Let the suppliers earn it.
On the other side of the coin, once the paddocks, watering and lane controls are in place, moving grassfed cattle from one paddock to another is really quick and easy. My experience is that once calves learn there is fresh grass on the other side of an opened gate, they'll quickly head for it on their own. One way to help them learn to move between paddocks is to use a sweet feed bucket and a big brother steer or old momma cow to lead them. The youngsters will follow the older steer or cow and very quickly get the idea. Also, a good cattle dog will encourage any stragglers to get with the program.
Actually, if cattle are moved every few days, you can look them over for various problems as they move from one paddock to another. Sometimes, its just as easy to open a paddock gate, let them move, and close the gate later. Once they understand the program, all you have to do is go down to the paddock gate, give a couple of hoots and they'll come in a hurry on their own.
Putting in strip grazing polytape or wire can also be very quick using step-in standards with pigtail tops. Jim Gerrish likes to say that he can put in 660' of temp strip-graze fence in less than ten minutes. Then he'll demonstrate it for you if you doubt what he says. He also adds up all the time it takes to move cattle and temp fences for a year and then compares that amount of time to how much time it takes to cut, roll, bale and move hay. He has some very interesting numbers and rotational grazing wins his time argument.
I sent an email to the guy who gave me the $4/lb information and asked him if he wanted to join the discussion. Haven't heard back from him yet, but he works for a well known cattle genetics company.
The key to successful marketing for an independent grassfed grower is to again think outside the box. Like you say, one small producer usually isn't going to be able to meet the demand of restaurants either in terms of product variety or quantity. However, a group of independent producers teamed up with a consortium of chefs serving a major city can very often satisfy the requirements of both groups.
Avoiding the sale barn and selling through private contract is also usually advantageous for the small producer. Sale barns around here have become nothing more than gathering places for big feedlot and packer buyers who pay the nominal USDA and CME prices. And of course most of the time they're only interested in complete semi-trailer loads. And even when a BQA Certified producer brings in high quality stockers, the Tyson, et al buyers are interested in pre-conditioning but try to avoid paying any premiums. In short, folks in the grassfed niche can probably do better developing consortium relationships and bypass the sale barn.
It takes both time and overt effort to find and develop relationships with other small producers, but it can become a combination friendship and business relationship experience like we used to have in the old days when everybody was an independent producer.
In this area we have both high-end restaurants and medium-priced restaurants. Recently the owner of one of the mid-price restaurants switched from regular old hamburger meet to Angus beef. He changed his menu, highlights the new Angus burgers with several offerings (e.g. Rodeo Burgers), raised his price for a 6 oz burger (also offers 8 oz burgers) and is making more money. He told me that his wholesaler was charging him $3.60/lb for standard hamburger meat, which was mostly ground chuck. He can now pay $4.00/lb for the Angus hamburger, charge $8.95 (or whatever) and sell more than he did before he changed over to Angus beef. He also touts the fact that he's selling premium, American grown. all natural (some say organic) meat and his customers love it.
He is very concerned about Tyson and other packers using blade tenderizing on more than cube steak, which is becoming the norm because so much of the meat coming from the big packing houses is extremely tough and stringy. The packers are also injecting and adding up to 5% solution (water + red dye) to packaged meat. Next time you're shopping in your favorite big-time supermarket (e.g. Wally World) hold up a package of meat and tilt it to one side. Notice how much red water flows to the corner and ask yourself what you're buying. Anyhow, his main concern is with the potential public health problem and his liability exposure associated with surface contaminents being driven into the interior of meat during the blade tenderizing process at the packing house. For that reason, I suspect he'll soon be offering Angus roasts, barbequed brisket, flanks and other lesser cuts from private and independent sources. He might even offer upper end steaks once in a while if they'll turn him a profit. Not only do customers want to know where their beef is coming from, but restaurant owners and chefs are starting to ask similar questions. Both want MCOOL.
You are 100% correct about genetics. Again, thinking outside the box, if one intends to raise grassfed cattle, then the genetics need to be there. My personal opinion regarding grassfed cattle is to only go with top end genetics. It takes the same level of effort (sometimes less) to raise top end cattle versus standards (what we used to call snakes). The investment in top quality cattle is higher, but so is the return (most of the time).
Ed
Ed
A couple of years ago I almost got involved with a co-op for grass fed beef. But, I chose Horses as my second career after I retired and yes it would have been more of a hobby than a career. Here is the link To this co-op Grass fed beef , did not have enough pasture to make it profitable.
This co-op in central NY is taking off, started out small, but is now growing because NYC is only a 4 hr drive, They cannot keep up with the demand, were getting up to 5.99 lb+ for chopmeat, 15.99 + for steaks (before BSE in america) at Farmers markets , now they have this website and are selling direct to restaurants and people in NYC. The more the safety of our food is in the news the busier this co-op gets.
As far as the Tysons & Smithfields & wal-mart. Did you ever see the (OLD) movie "Solvent Green" with Charlton Heston
Ron
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