This past year had a humbling effect on many cow-calf producers. Calf prices steadily declined until 500-pound steers were worth $500 less than they were just one year ago – and $750 less than they were two years ago. In this business, that is a HUGE change – in the wrong direction! The 2016 income for most cow-calf producers will likely be less than half what it was in 2014.
Thankfully, cattle prices have been trending slightly upward for most of the last two months. I have not found anyone, though, who can confidently tell us what we can expect for the coming year. I don’t know if we have seen the bottom in cattle prices or not. I hope we have – but there is evidence that we have not yet seen the bottom of this cycle.
One thing we do know… is the cost of producing a calf for status quo producers is double what it was just 15 years ago. Even with lower crude oil prices, I don’t see this trend changing. More and more cow-calf producers are struggling to produce enough income to cover their expenses. If this continues, more and more producers will be forced out of business.
Another thing we do know is that drought is once again becoming a reality for many of us. Drought, like cattle prices, is totally out of our control. Therefore, it too can have a humbling effect on us. Although we cannot change the weather, we can make plans for how we deal with drought and other weather conditions.
The most profitable cow-calf producers that I know of have a low-input, grass-based program with very efficient, low-maintenance cows. These are also the happiest producers I know of. These producers are not any more intelligent than the average producer. They do, however, have the ability to break away from the status quo, herd-mentality way of thinking.
Here at Pharo Cattle Company… we do much more than just sell bulls. We provide a program and a way of thinking that are focused on increasing pounds and profit per acre – in good times and in not-so-good times. Our low-maintenance bulls are just one part of this program. Our business is helping you – and we take it very seriously. The future of your family farm or ranch matters almost as much to us as it does to you.
Quote Worth Re-Quoting –
“The road to success is always under construction.” ~ Arnold Palmer