CATTLE RANCHING Part 1 Over the last few weeks I've gotten several calls, letters and e-mails

from readers of Cattle Today or, more specifically, folks that have run across CT on the Internet while doing a search. Generally the uestions have centered around !I've "een away from the farm for a num"er of years and I'd like to get "ack into a cattle operation.# Often times this is coupled with someone who has inherited the family farm or who has decided to invest some of their hard-earned dollars into farming and ranching property and would su"se uently like to start running a few cows. Guessing there are pro"a"ly more folks out there who are in this or a similar position I wanted to share a few thoughts on how one might go a"out !starting from scratch.# If you have "een a rancher all your life, this article may "e elementary to you or it may give you some opportunity to reflect on how and why you have gotten to where you are. Homework and Planning is the Key $ust "ecause a new cattle producer is, in fact, new or has "een away from the industry for a while does not mean that they have to come into an enterprise with their eyes closed. %owever, what I have recommended to numerous individuals wanting to undertake such an endeavor is to first sit "ack and reflect on why they are interested in getting into the cattle "usiness and to "e honest with themselves. %ere are some thoughts that have "een passed on to me and that may "e applica"le to many new cattlemen& '( It's something my family has always done and is part of my heritage. )( I like the lifestyle and*or it's something I'm interested in. +( I've inherited the family farm*ranch and would really like to get it running again. ,( I've got a num"er of friends in the "usiness, looks like they are making some money and I'd like to take a shot at it. -( I feel like there is a certain amount of prestige to "eing in the cattle "usiness and my friends will "e impressed .these folks have o"viously never had their arm up in a cow trying to deliver a calf a )&// am in the middle of a rainstorm on 0ew 1ear's 2ve(. 3( I feel like it would "e a good ho""y or leisure activity .please see the note on 0o. a"ove(. 4t one time there were a lot of ta5 incentives to owning a cattle operation so this drove a lot of these types of programs. 6nfortunately this is not so much the case any longer although you definitely need to talk to your C74 "efore venturing in. 8o not get me wrong, there are no wrong reasons, "ut it is very important that you evaluate WHY you want to "e there. 4lso remem"er that they need to "e your reasons and not some "ill of

goods that someone has sold you. 4nd finally, no matter how much homework and planning you do, more than likely, fairly soon in the process, 9urphy's law will come into play. Ok, "ack to the real purpose of this section. Once you've determined why you want to start your cattle operation it can then "e assumed that regardless of the reason you would like it to "e at least marginally profita"le. I don't know too many people that consider throwing money out the window a recreational sport. This means that some planning and thought needs to go into the start-up process and in initial su"se uent input costs, operational costs, marketing programs, product sales, etc. $ust like any new "usiness it is very important to develop a "usiness plan. This provides a road-map for you to follow as you go into your pro:ect. 4lso, unless you are flush with cash, you may have the need to procure some financing. 4 sound "usiness plan is certainly a useful tool in this process as well. In developing a plan of this sort you need to look at a num"er of factors. The first step is to decide which sector of the "eef industry you would like to involve yourself in. The following is a list of sectors commonly found in the "eef industry& '( 7ure"red .;eedstock( 7roducer < this type of operation produces "reeding cattle which are su"se uently resold "ack into other seedstock operations or to the commercial cattle producer. )( Commercial Cow*Calf 7roducer < this operation produces cattle that are used primarily for meat production. It also produces a replacements for cows that must "e culled far a variety of reasons. +( ;tocker Cattle 7roducer < these operations purchase cattle from commercial "reeding operations and grow the cattle "y gra=ing, feeding or a com"ination and sell them onto the ne5t phase. ,( 7reconditioner*>ackgrounder < this operation can "e easily positioned with a stocker cattle operation or can function independently. It's primary function is to act as a !go"etween# one sector and another to assist in preparing growing cattle for the ne5t step in the process. ?or instance it can "e positioned "etween the ranch and a stocker operation, "etween the ranch and a feedlot or "etween a stocker operation and a feedlot. -( ?eedlot < This operation feeds cattle from a relatively light weight to a finished weight as dictated "y the market and provides cattle for slaughter 3( 9eat 7acker < processor of fattened or finished cattle and sells the meat products to wholesalers or retailers. One thing to consider is that there are countless variations to this group as well as entities which service the overall infrastructure in one area or another. I have had producers lament the concern to me that eventually the "eef industry will "ecome as vertically

integrated as the poultry industry, where one entity owns the animals from the time they are "orn .meaning they would own the cows and control the land too( until the time they are slaughtered and the meat marketed. This is highly unlikely given the amount of resources .especially the land( and time re uired to produce one animal all the way through this process. It might "e possi"le on a limited scale "ut in order to produce all the cattle needed to supply a packing house which slaughters +-// head per day .i.e. an I>7, 25cel or 9onfort( would re uire a cow herd of almost ) million head .estimated cow investment @ A'.- "illion( and over )/ million acres of land .estimated land investment of A'- "illion( and an estimated la"or force of +/// people with a gross annual salary of around AB- million. This goes to show us that there will "e room for the small producer "ut he needs to "e well set up and know his stuff. 4fter the new, prospective producer considers which sector he is interested in venturing into, he .or she( needs to take stock of his resources. In virtually every case, the first limiting factor is money. The second is time and la"or availa"ility. Cet's assume, for argument's sake, that a prospective new producer has decided on one of the first four sectors discussed. O"viously, we need to evaluate the pros and cons of getting into each "ut first let's consider some givens. 2ach operation will re uire a certain amount of land. One then has to consider land cost, ta5es, location .how or if the operation will effect neigh"ors(, will any environmental issues come into play, etc. ;econdly, we'll assume the "ase forage production will come from the land .i.e. gra=ing(. Dhere will supplemental forages*feeds come fromE Can hay or silage "e produced on the property as well, in addition to gra=ingE Can grass "e stockpiled effectively or will all supplemental forage have to "e purchased .this is not necessarily a negative(. If it is produced on the farm will it "e custom harvested or will the producer purchase the e uipment and harvest the hay or silage himselfE Dill any supplemental feeds .grains( "e produced on the farm. If so, how will planting*cultivation*harvest take placeE Dhere will the feed*grain "e storedE If it is purchased, will it "e "ought in "ulk or in "ags .different initial cost factors(E Dhat handling e uipment will "e neededE 4 tractor with a hayfork or front-end loader will "e needed to handle most stored forages. Dhat type of cattle handling e uipment will "e re uired. 4t a "are minimum it will re uire a corral or set of pens to trap and hold cattle for working, treatment or sale. 4 minimum of a self-catching head-gate will "e re uired to hold cattle for working purposes or to administer veterinary services. 4 truck and trailer will "e necessary to transport cattle to market or "ring in new purchases. Dill cattle "e supplemental fed on the ground or in "unks or troughsE There is not necessarily one right answer to these uestions "ut they need to "e thought through and the decision made concerning which will "e right for your operation. Pure red or !eedsto"k Produ"er# The first concern will "e the initial investment into the "ase herd. 7ure"red cattle, since you are purchasing a set of genetics are more e5pensive than commercial animals. This is true for several reasons including, knowledge of the sire and dam and su"se uent generations "ack, performance information on a num"er of production traits .milking a"ility, weaning weights, yearling weights, calving

ease, etc.(. >uilding a good pure"red herd takes time and a COT of study. The "est "reeders I know are almost o"sessed with the "ackground information of their herds and where they will go from where they are today. Dhen it comes to pure"red cattle, the sky is almost the limit on what they can cost. Once you have these cattle purchased then you have to figure out how or where you are going to sell the offspring ."ulls and heifers(. ?rankly this is a component of the program that needs to come first. In many cases it is uite simple for an individual to get involved in this or any other sector of the "usiness, it primarily re uires the money to purchase the initial "reeding animals. ;elling or marketing their offspring in a manner that is appropriate for the enterprise is another story. It is simply not cost effective to purchase pure"red animals at the prices they normally command then to only sell them through the typical commercial auction facility. Dhen esta"lishing a pure"red program, it is very important that you simultaneously develop your marketing program. The "reeders you are purchasing your "ase stock from, and*or the "reed association can help. Once again it is very important to do your homework to determine which "reeds are in significant demand in the overall industry. 6nfortunately, due to the large num"er of "reeds and the diversity that e5ists, some are in greater demand than others. Commer"ial Cow$Cal% &'erations# Commercial operations are typically the norm and are far more numerous than pure"red operations. >uying into a commercial operation is less e5pensive than a pure"red operation simply "ecause the cattle command a lower price per head. Good uality commercial replacement females are always in demand, however and in many cases are not significantly cheaper than pure"red females in some instances. In many cases a commercial operation may "e comprised of a herd of cows that are more or less of one "reed and are crossed with "ulls of another "reed to produce calves that e5hi"it traits of "oth the "reeds. In many cases this cross"reeding program, especially if well designed, produces offspring which e5hi"it hybrid vigor or an improvement in certain performance characteristics such as gains or feed efficiency over the average performance common to one of the parental "reeds. The offspring here are used, in many cases in two ways. One is to produce steers and heifers which will ultimately "e used for "eef production. ;econd is to produce replacement heifers which may come "ack into the herd or may "e sold as commercial replacement. Once again, it is very important to evaluate the markets to determine how these cattle will "e sold to produce your income. 8epending on your operation si=e you have the option of selling through your local auction facility .this is the simplest(, to a local order "uyer .someone who deals in cattle, this is a little more complicated(, through video or internet sales or directly to another producer who will take these cattle through the ne5t phase of production. In many cases a commercial operation is position where it can take advantage of other sectors as well as the production and sale of commercial cattle as noted. 8epending on the land and capital resource you have it may "e feasi"le to incorporate a small pure"red operation or possi"ly a stocker cattle or cattle growing operation as well. Con"lusions 4s you can "egin to see there are a lot of options that have to "e considered and a lot of uestions to "e answered. In the ne5t part of this series we will evaluate other sectors in

the "eef industry and consider the positives and negatives of these types of operations as well. Dr. Steve Blezinger is a nutritional and management consultant with an office in Sulphur Springs, TX. He can be reached at P. . Bo! "#$ Sulphur Springs, TX %#&'$, b( phone at )*+$, ''#-%**. or b( e-mail at ssblez/ peoplescom.net.