How Many Cattle Equal Profit
Mid-size cattle operations are often quite efficient and can turn a profit. Declining cattle numbers overall in the United States means prices have been good, above the cost of production. Some producers see this as an opportunity to get bigger, but at what point will the scales tip away from their favor and beef production becomes negative?
"If a producer had 100 cows and goes to 150, perhaps the facility can handle that. When a producer says I have 100 cows, I’m going to 300 cows, now you’ve got to rethink in many cases because the facility is only built for 100 cows. So, it’s kind of a double-edge sword," says Ringwall. "Moderate growth is good but at some point, those cows are going to outgrow the facility, now you’re going to have to invest more dollars in overhead."
You can acquire more ground for grazing and build more facilities, but Ringwall says the other side of that equation is always labor.
"During the normal season, cattle are out and about. You can run it, manage a lot of cows, you can supervise, you can oversee. But when you bring cattle together, you still need labor. When you’re calving, you need labor. When you work the calves, you need to have labor," he says. "Eventually, those questions have to be answered, and sometimes the labor just isn’t there."
Take the time to go through a business planning process, put an expansion plan together, and see if it makes sense in black-and-white.