Ranch Musings columnist David Zirnhelt. (File photo)

RANCH MUSINGS: Will ranches become more and more toys for the rich?

A ranch for the owner is a matter of being “land rich and cash poor”

As I wrap up the summer work and start the fall program of rounding up cattle and marketing, my thoughts turn to the future of the cattle industry, in particular the small and medium size ranches.

Although the prices of feeder cattle (calves and yearlings) have been the highest since around 2015, they are dropping a little. But are still pretty good.

Demand for feeders means the big slaughterhouses need to stock up. Retail prices are very high for beef.

The impact of one factor, the failure to restock the mother cow herd in America, is as yet, unknown since very few bred cows have hit the market. Almost all the cattle auction sales report no bred cows on offer.

“Replacements” or young females (heifers which will become mother cows) can be going into the high-demand markets for fattening to be sold as meat. Female cattle can mature earlier than males (steers), thus helping meet the retail demand.

But the mother cow herd depreciates and needs replacing. It is commonplace for a female to be bred at a year and a half, calving at just over two years of age. There is attrition along the way to becoming cows that have successfully had a calf and are bred back and are successfully in calf with their second.

All of this is to say that replacing older cows is not an overnight affair. Some have trouble calving and should be culled, others don’t have strong maternal traits, milking and protecting their calves.

If prices of calves are high and the prognosis of remaining high holds true and the prices of mature cows are high, then we can see many people exiting the cow/calf business: going out on a high!

The age of farmers is high and climbing. Recruiting young people to replace the current generation of ranchers is a tough task since it is not a high-wage industry, nor does it provide much of a return on investment.

On the plus side, though, if you like cattle and horses and enjoy looking after them during all the seasons, the jobs can be pleasant enough.

A ranch for the owner is a matter of being “land rich and cash poor.” Many of us think rising costs are somewhat compensated by higher prices for our products.

A positive note is that the federal government is recognizing that carbon taxes need to be offset by credit to those operations that are storing carbon through their farming practices: cattle grazing and crop fertilization by practising regenerative agriculture (natural soil building using cover crops).

It will be our challenge to be “state of the art” in our management looking after our “estates.” If we don’t meet this challenge and master it, we will be further dependent on outside income to pay the bills!


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