3 steps for starting a beef herd

Follow these steps to increase your chances of success.

Do you want to start a beef herd? Maybe you’re just out of college, rejoining the family farming operation, and you want to expand. Perhaps you want to diversify your operation by adding more livestock. 

Whatever the reason behind your decision, there are factors you’ll want to consider and steps you should take to increase your chances of success.

Make a plan

Dan Loy, director of the Iowa Beef Center, says the first step is to put together a business plan. Few producers have the capital at their fingertips to start such an enterprise, and that means your first stop will likely be the bank. Bankers expect a complete, professional business plan for ag ventures, just like any other type of business, so break out an online template, and dot the i’s and cross those t’s.

“What resources do you bring and what resources do you need to acquire?” Loy asks. “Those are the questions to ask.”

Patrick Wall, Iowa State University (ISU) Extension and Outreach beef specialist, suggests you make a plan and then work backward. “Many people buy a bull and then figure out how to use him and hope someone buys the finished product,” he says. 

The process is a by-product of the commodity system: Grow food and hope someone buys it. Wall says it’s no longer enough to sit at the sale barn and hope for a good price. “The first thing you need to do is figure out who your market is,” he says. 

There are many niche markets these days, ranging from local and online direct sales to raising recipient cows for embryo transfer, as well as contract sales and the open market. Wall says once the marketing options have been assessed and determined, then it’s time to purchase cows and a bull that will genetically get you where you want to go. 

“When you determine the customer first, you can build the product you need,” he says.

Assemble a team

From the vet to the feed rep. to the neighbor who’ll help work cattle at peak times, know and enlist your team of experts. The first step here is knowing your own strengths and weaknesses. Were you good at nutrition in school? Or are you the risk-management expert? Look for people who will complement your strengths and fill in the gaps of your weaknesses.

Joe Sellers, ISU Extension beef specialist, says the newer, younger producer may want to look at partnering options to share costs and risk. Sharing offers a broad range of possibilities – from custom grazing to shared ownership of the herd. Sellers says there are no hard-and-fast rules on how labor and investment are divided, but be sure to include noncash contributions such as labor and owned pastureland as well as out-of-pocket costs. Many cow-share arrangements allow for transfer of ownership over a period of time, an aspect especially attractive to beginning producers looking to build their own herds.

“In surveys we have done, 90% of young producers say their goal is to own their own cows,” Sellers says. “A partnership arrangement early on can help build the financial resources to reach these long-term goals.”

You can be creative, but he says make sure all terms are spelled out.

Weigh your progress

Keep good records. Know your cost of production and track your marketing success. Loy says if you are in a situation where you can generate closeouts, join a group where you can benchmark yourself against others. Then, review that information regularly. 

He also suggests having a contingency plan. “If your plan doesn’t pan out or if you are unable to survive the inevitable weather-related downturn, know when to get out or get help,” Loy says. “There are advantages and disadvantages to farming as a way of making a living. Being independent and living in rural areas, the lifestyle is attractive. But you have to crunch the numbers and be realistic.”

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