My father use to say, "If you want to make money raising cows, have them grazing between oil wells". On my more pessimistic days, I tend to agree.
Cattle are a "life cycle" product. Take one heifer, wait for appropriate breeding age, add one bull -- wait approximately three years to get return on initial investment. Needless to say predictions on where the market is for beef at any given time tend to be more wishful thinking than actual cash flow projections.
So what are ranchers to do?
First thing – break free of the current market model. I haven’t sold calves through the auction in years. I have developed a direct market program that allows Bastrop Cattle Company to sell wholesale to several restaurants and grocery stores in Austin. We also sell direct retail through a shopping cart on the internet and off the ranch directly to our customers.
This means better prices for our consortium of family ranchers (better than market), control of our wholesale pricing and better prices for our retail customers.
It does mean more work for me – I am the marketer, the shipper, the delivery service (and chief bottle washer) – but that’s what it takes in a new type of food market. It also means that I’m competing with the likes of Ben E. Keith and Sysco, and grocery stores like Whole Foods and HEB.
I would have to hold down a second job to support this ranch if I used the traditional way of selling beef. This ranch is NOT a hobby. It’s a business and it must make a profit to survive.
Now, Brandon and I are looking for more means to increase the revenue streams off of the ranch. The first one has proven reasonably easy. We sell hay. We have a pretty good following – our hay is chemical free – no herbicides and all organically fertilized. There is a growing group of people who consider this important. Either they have gardens that they need mulch for or they have cattle and horses that they don’t want ingesting chemicals. We sell several hundred bales a year and are moving our numbers up over the next year of hay cutting.
Still this does not represent a major amount of money. It pays to fix fences and will help with repairing the barn. But new fences, more cattle and serious construction of dams and irrigation systems are more expensive.
We are doing several events and sharing the ranch with different groups. All have their advantages and disadvantages.
1. Liability insurance.
2. Wear and tear on the ranch itself.
3. Scheduling – not just what works for people doing events, but what fits into the life cycle of the ranch itself.
4. Increased permitting
5. Added overhead costs.
6. Competition – there are plenty of other farms and ranches that are trying the same thing.
And we’re looking at additional agricultural uses for the ranch. Currently, we’re exploring (meaning research, research, research) lavender, olive trees, fruit trees, fish – both stocking and farming, tree harvesting and gaming hunting.
Joel Salatin estimated for his six hundred acre farm in Virginia that he had to gross $3,000 per acre annually in revenue to justify not selling it off for development. That amount is higher here in Central Texas.
I love my ranch and the beauty of the big oaks and the bull mesquite. I consider myself a steward not an owner of this land. For it to survive as a ranch, I must push it to pay for itself. On the one hand is is mystical and full of peace, on the other hand it is a “factory” that needs to support a going business.
Think about this the next time you visit a working farm or cattle ranch. By supporting local/sustainable agriculture, you are also supporting the preservation of open land and creating jobs that keep someone on that land to keep it open for the next generation.