Why Raising Cattle Makes More $ense Per Acre
Doing some number crunching in my head the other day while out for a walk. And at that time I thought that corn might upset my figures on raising cattle.
But I was wrong.
Corn will raise on average about 80/bu. average an acre on the ground we have. Clay hillsides and silted bottom ground. Marginal land. What Missouri (and the rest of the country) grows most of it’s cattle on.
Now, if you take 30 acres and raise corn/soybeans alternating years, you end up making some profit.
Corn: 80 bu./acre @ 3.50/bu. = $8400.
Now, take off the spraying and fertilizer: -$2000
And take off hiring someone to do it (their fuel, repairs, labor, and seed): -$1000
So you might make $5400. Last two years we had crop failure on corn planted anywhere.
Beans: 40bu./acre @$8.00 = $9600.
Same inputs: -$3000
So you might make $5600
Cattle: 2.5 acre per head (conventional grazing in Missouri) = 12 head.
Say you raise half of these to full size. 6 cows and their 6 calves being brought up to full weight at about 1000 lbs. We get about $.80/lb. live weight at the auctions. = $4800
And take off the cost of hay during the winter (about $200 per finished calf for two winters) and you’re pulling down $3600 for profit.
So it’s a no-brainer to raise row crops, right? Not so fast…
On grass-fed beef cattle, you can further cut inputs and raise value-added premiums.
1. You only grass feed them and start doing ultra-high-density stocking or intensive managed grazing. Means you feed hay about one week a year on average, which is about 2-4 bales. (At $40 each, this cost is then down to $160 – or $320 for two years for the whole herd.)
2. UHD managed grazing will increase herd size, sometimes as much as 4x – to it’s now possible that the original 30 acres will now hold 30 head. Let’s keep 15 momma cows and 15 calves to full weight.
3. Now, you take it to a USDA-inspected locker and start selling the individual pieces of those cattle directly to your clientele instead of taking them to auction. While the possible total sale can be about $3000, you take off processing and marketing costs, which might run $500. $2500 per animal sold.
15 x $2500 – $320 = $37,340 annual profit
Can you do that same leverage by value-adding to corn or soybeans? Much less, you are spending around7-10 hours a week raising this crop, and almost nothing of that is in the tractor seat – most of it is walking around and moving fences.
In a word, No. Not that I’ve been able to find, anyway.
UHD managed grazing (also called Mob Grazing) cuts overhead from $400 per animal to $320 per herd. All while multiplying herd size by at least double and sometimes up to 4X. (Because you have to keep increasing herd size to keep up with the grass and it’s increased yield.)
But even with conventional grazing and a grass-fed product, if you part it out and direct market you can increase the premium to $2100 per animal compared to $600 profit.
Increase herd size by more than double, increase profit per animal by over triple – 6x your after-input income. In the above case, it is nearly 8x.
While you don’t spend the time in the field, you are now direct-marketing your beef, which is a different skillset. Not as dangerous or physically demanding. And if you are a real people-person, it’s probably more rewarding than exhausting.
Now, this is saying that your other on-farm overhead costs are the same for both scenarios.
But you can also see why row-crop farmers have to be big in order to pay for all their equipment and chemicals.
The kicker is, if they went to selling all-natural beef instead – and had their kids grow up to be marketers and stay around the farm – those same thousands of acres would be able to support several families instead of barely one.
Now, your mileage will certainly vary.
But crunch the numbers for yourself and find out that grass fed beef cattle beats row-cropping hands down.
(And we didn’t get into how grass fed beef don’t create but a fraction of “greenhouse gases”, since you only burn fuel to take them to the processing plant, plus ultra-high-density managed grazing actually sequesters more carbon than these cows can emit…)
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Do we do this on our own farm currently? No, we are in the middle of phasing over. Right now, our 20 cows will bring us the most at auction prices by selling only 1/4 of them as finished beef and the rest as stockers (yearlings). But we aren’t switched over to UHD managed grazing (mob grazing) yet.
Getting there, though…
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