If you are a cow-calf producer, I encourage you to be honest with yourself when you answer the following two questions. Were you profitable in 2019? If you were profitable, would you be able to prosper with that level of profitability year after year after year? According to what I have read and heard, very few cow-calf producers showed much profit in 2019. Most did good just to break even. Many did not break even.
Contrary to popular opinion, there are many cow-calf producers who were very profitable in 2019. While most of their neighbors were whining, complaining and blaming, these producers continued to make the necessary changes in their operation to keep up with the future. They know nothing stays the same. The present is different from the past and the future will be different from the present.
As we said in last week’s PCC Update, much has changed in the last 50 years – and yet nearly all of today’s cow-calf producers operate as though nothing has changed. Fifty years ago, you could purchase a new pickup for less than $5000. You could purchase gasoline for $0.35 per gallon. Land could be purchased or leased for one-tenth what it costs today. In the last 50 years, the cost of inputs has risen at least four times faster than cattle prices.
If you are a cow-calf producer, your survival will be dependent upon your ability to adapt and change. The sooner you change, the better. The most profitable and successful cow-calf producers started to make the necessary changes 10 to 20 years ago. As time goes on, more and more producers are making these changes. There have always been huge benefits to being early to make necessary changes. There will always be consequences for being late.
Be honest with yourself… Do you need to make some changes in your operation? If you were not satisfied with the profits you made last year, you need to start making some changes. The recurring theme in our Winter 2020 Newsletter is the need to change with the times. The leadoff article demonstrates how change is accepted and adopted by different groups of people. Which one are you? Be honest with yourself.