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Cattle money ball
The phrase low-cost producer has been bantered around farm circles as the ticket to success. Don Schiefelbein says that can lead you astray, because many farmers actually think it means to “not spend for anything.”
The approach his family uses on their Kimball, Minnesota, Angus cattle farm is mindful of the recent movie, Money Ball. It’s about a baseball team that learns to invest wisely in players with a proven track record.
“Sometimes, you have to spend money to make money,” he says. “The real goal is to become a high-income producer.”
Here are five examples of wise investments that are paying off for their operation.
1. FEED BARGAINS
This farm has access to waste from nearby sweet corn plants. “We get the cobs, husks, and some kernels, and we pick it up for about $6 per ton wet,” says Schiefelbein. “We bag it (in plastic wrap) like baleage, and it comes out as a feed that competes with corn silage worth $70 a ton.”
2. MACHINE UPGRADES
The Schiefelbeins trade up to new tractors and haying equipment every year. While that might look like the expensive approach, it’s not, explains Schiefelbein.
“With new machines, we rarely have maintenance costs. Our cost of ownership on the big tractors is about $5.50 per hour of operation; for the small tractors it’s $3. If we leased them, it would cost $30 to $40 an hour,” he says.
“When we trade, they’re still high-value tractors, usually with warranty left. Our dealer can move them easily, so everyone gets a good deal,” he says.
3. BETTER FEED
The least expensive way to put up hay is the traditional way: cut it, dry it, rake it, and bale it. “That system typically leads to 20% or more waste,” he says.
A few years ago, the family converted to full plastic wrap baleage. Hay is cut and bagged wet, before it deteriorates. It ensiles in the bag and is protected from rain. The cattle eat every pound at full nutritional value.
The bagging machine costs $25,000 (custom baggers usually charge about $3 a bale). There’s a payoff to the investment. “We know we have eliminated at least 20% waste,” explains Schiefelbein. “With hay at $300 a ton, that’s a huge savings.”
Before converting, the farm had to buy supplemental hay every year. Since switching to baleage, the Schiefelbeins have added 20% more cows (750 registered Angus females and 1,000 head total) on the same land base.
4. FAST GROWTH
The Schiefelbeins have excellent genetics they sell as bulls and semen to commercial beef producers. They initiated a calf buy-back program. If you buy a bull from them, they’ll buy your calves and put them in their confinement barn or custom-feed them.
“We feed about 25,000 head of customer cattle annually,” says Schiefelbein.
The confinement barn cost about $1,000 per animal unit to build. It greatly reduces labor and cattle-bedding costs.
“We’re in Minnesota, and the inside feeding gives daily gains of 3.2 to 3.4 pounds per day. Outside, we’d be under 3 pounds per day in bad weather,” he says.
Consistent gains get cattle to harvest in April, May, and June, which are the best markets of the year. If they qualify for Certified Angus Beef, they earn $100 to $150 a head in market premiums.
5. HEALTH CHOICES
The farm has extremely low calf death losses. One year, to save money, they switched to cheaper vaccines. Death loss went to 2%, still very low.
“That cost us 40 to 50 calves,” says Schiefelbein. “We save 40 calves by not being the low-cost producer.”