By Kit Pharo
Status quo cow-calf producers are getting by – but most would not consider themselves to be financially successful. Truth be known, in a ten-year period, status quo producers are doing very good just to break even. Well over half of them won’t break even. In a nutshell, there are three keys to attaining real financial success in the cow-calf business.
- Reduce and eliminate expenses
- Increase pounds per acre
- Sell calves for a premium
Reducing and eliminating expenses is easier than most cow-calf producers think – but it will require a slight paradigm shift. Most expenses are fossil fuel-based. Real success in this business will take place when we transition from fossil fuel energy to free solar energy. Winter feeding is usually the biggest expense. With the right kind of cows and with proper grazing management, most winter feeding can be eliminated. Working with nature will also reduce and eliminate expenses.
Increasing pounds per acre will never take place until you STOP focusing on increasing pounds per animal. Status quo producers have been focused on the wrong thing for the past 50 years. Stocking rate affects profitability, or lack thereof, more than anything else. With the right size and type of cow, most cow-calf producers can increase stocking rate by at least 30 percent. With proper grazing management, it is possible to increase stocking rate by another 50 to 200 percent.
Status quo cow-calf producers will never sell their calves for a premium. They will always take what the market is willing to pay them on that particular day. PCC customers, on the other hand, will soon be able to sell their calves for a $15/cwt premium. That amounts to a premium of $75 per head on 500-pound calves – and a premium of $120 per head on 800-pound yearlings. Nowhere else can you receive premiums like this.