The Future Of The Registered Cattle Industry

The Future of the Registered Cattle Industry

By Craig Perez

Registered Texas Longhorn bull and heifer.
Courtesy of  Arrowhead Cattle Company
Photo by: Craig Perez

The questions you may be asking.

 If you are reading social media or just got your check from the latest consignment auction you might be asking yourself some tough questions about your cattle business. Just so you know you are not alone. Many of the breeders in various breeds across the nation are all asking the same questions. Why is the market so soft? How do we get more money for our cattle? Why does it seem like only the "big boys" make all of the money? How does a small breeder compete? Where do I sell my cattle to make the most money? Should I switch breeds? 

 These are all great questions and while each question can be a conversation in itself, some main points can be laid out for each one that may give you some insight on how to pilot your program through the next year.

Why is the cattle market so soft?

 If you raised unregistered stock you would find that the market is currently very much a buyers market. Meaning that if you wanted to get into the stock market or livestock market as it would be, now is the time. Buy now and buy with confidence. While this may not be a position you are in, it is certainly one that can apply to your registered livestock business. It would seem that the political atmosphere has played a role in our current circumstances. People who sit in positions to make deals on behalf of businesses and countries make unilateral decisions that impact everyone. In our case the cost of our livestock. Thus the amount of money we can make to support our families and ranches. 

 Dairy now pours in from the border between Canada and the United States, putting the average dairyman out of business on a daily basis. Between the cost of land, taxes, labor cost, and legislation that is imposed on the American dairyman the cost to produce a gallon of milk is more than the very same gallon of retail milk coming from Canada. 

 While on the southern border beef is being imported from Central & South America to crush the bottom line of the average meat producer. Just like in the north, the cost of land, taxes, labor cost, and legislation imposed on the American cattle rancher makes it very hard to compete. 

 Meanwhile, the inner politics of the United States play a tug of war over power, land, water, and rights. As cities expand into the countryside, the cost of land dramatically goes up as do the taxes to force owners to sell out to home builders and city projects. Water, once managed by rain and the capacity of tanks, ponds, and lakes will be stretched thin by the never-ending thirst of the cities. Rights and laws are dictated by the mass for the greater good. Cities pass laws with total disregard to the impact on the American farmer and rancher. In a perfect world, the cost of making a product would be directly passed up the chain all the way to the consumer. However, our system lacks some of the fundamental guidelines to keep this process in check. 

 The walls and streets seem to be closing in on the American rancher faster than ever before. Obstacles in every shape and form pivot to block our every move to try and find some profit by which to make a living. 

How do we get more money for our cattle?

If you are a commercial livestock producer, the first answer may make you turn your head. Converting your commercial herd over to registered stock may be the first step in getting a better bottom line. For years, every registered breed relied on the conversion to the commercial livestock producer. Breeding a registered bull to commercial cows seemed like the perfect way to add more pounds per animal with a faster growth period. It’s a new bright and beautiful digital world today. Everything you do, watch, and view is being tracked. The dairyman that are making the money, they have mechanized and computerized to make sure they are getting every ounce from each and every cow they own. The big cattle ranches are using sophisticated software to track everything from rate of gain to rainfall. Most registered breeds of cattle utilize the EPD system otherwise known as Estimated Progeny Differences. Which is more or less a fancy term for livestock statistics. Like a baseball or football player, each aspect of the individual is measured and tracked. The better the statistics, the more you move up. The worse the statistics, the more likely you end up cut. Quite literally if you are a cow. Knowing what your livestock is capable of doing and what it has done will become more vital with each passing month and year. 

Why does it seem like only the “big boys” make all the money?

 If you aren’t one of them, you have probably asked this question. Interestingly enough, there is always a bigger “big boy” out there. Every registered livestock industry has that record-breaking moment when an animal sells for a ridiculous price that leaves your friends in Califonia and New York lighting up your phone with messages asking, “did you see this?” It takes all your will power to not respond, “Duh, I was there when it happened.” So why do the “big boys” do it? The answer to this can be boiled down to two main answers. First, they can write it off! That’s right, where there is a savvy accountant there is a way to save money on your taxes. Turns out, when done properly, livestock can be one of the best ways to decrease the check you write to the government while building a business that can make you a nice living, or in there case a hobby that pays for itself. Second, they understand genetics! It’s a term thrown around registered livestock all the time. Horses, cattle, goats, pigs, and everything else that can be registered and have a pedigree is followed by genetics. When the big players buy six figured animals they do it knowing that the animal they are buying is well worth the money. How do they know? They know because it comes from great bloodlines, its own accomplishments, and the attention paid to creating a name that means something. For them, this may be a hobby or they may have built it from the ground up to be the best there is. They pay close attention to all the business aspects of their animals. They bought the best and they breed to the best. In return, they raise the best! It seems like that might be too simple of justification, at that level breeders can afford mistakes, but why chance it. They buy from other known producers of great quality stock, and in doing so pay a premium for the livestock. In many breeds, the best stock is bought and sold from one “big boy” to another. Leaving great up and coming stock to be heavily discounted and sold at insulting prices by lesser-known producers. 

How does a small livestock breeder compete?

 Have you ever heard the saying “necessity is the mother of invention”? For a small cattle breeder to compete, for a small horse breeder to compete, for a small goat producer to compete, and so on, it takes innovation. Look at your specific breed and figure out how to carve out a niche for yourself. You can either use the same genetics by breeding with the same sires, or you can create our own lines by keeping the very best of what you create. In either case, plan to build a program that offers something different. Start to gather your own data and figure out how you can use that to breed animals that look the way you want, perform the way you want, and feature a genetic package that only you have. Once you have completed this you can focus on the next step, which is selling your livestock for a profit.

Where do I sell my cattle to make the most money?

 If you aren’t able to sell your cattle for a profit, it doesn’t matter how good they are. Commercial producers traditionally sell at the local sale barn or livestock auction. This has been the time tested to be the easiest way to sell your living inventory. Caution, buyers in this market don’t care if you make any money. They would prefer you didn’t. In Texas, Farm to Market roads celebrates this long-standing form of commerce. For your friends that live in the city, they know to avoid these roads for fear of getting stuck behind a tractor. For once, you might follow there lead and avoid these or risk getting stuck behind. Thanks to technology and the wonderful digital age, both registered and commercial livestock producers can sell their animals online. 

 Websites are a must for any ranch these days. Each year the number of horses, cattle, goats, and every other farm and ranch creature being sold will increase. These virtual storefronts make it possible to sell well beyond your city, county, and even state lines. A well-presented site can make a small breeder look like the biggest and best breeder in the nation. 

 If websites aren’t your thing, or maybe your budget just doesn’t allow for it yet, then Social Media is your answer. Taking time to create your social media pages can give you an edge on the competition. Knowing how to target the right audience and market straight to them allows you the ability to ask the exact price you need and want for your livestock. 

 Thinking old school in a new school way is to list on Craigslist. While this is a market that brings out the most frugal of shoppers, having well-listed livestock can help you not only reach new customers but also welcome new breeders to your industry.

 The most commonly used resource is the registered consignment sale. This is by far one of the most hotly debated topics in any livestock industry today. Let’s just move past the argument of too many sales and quality of consignments to go straight into understanding each auction. Every auction has a unique attribute. Some are simply geographical. These are likely the least profitable, as they reward buyers at the cost of the local breeders’ willingness to support the sale based on its proximity to them. Instead, seek an auction that has a specific theme. Keep in mind if the theme is the best stock, you have to be able to pay to play. If you have great stock, but lack the pay to play option, then research to find one that promotes unique attributes much like what you raise. Searching based on color, size, age,  genetics, can be very rewarding especially if your animal is among the best there. 

 Finally, go back to the basics. Call, text, or message people to come and visit your farm or ranch. It may cost you breakfast or lunch to have people see what you’re doing in person, even if they don’t buy anything, chances are they will share their experience with others. That will eventually lead to the kind of sales you are looking for.

Should I switch breeds?

 If you feel me shaking my head, you would be right. If you failed or feel like you are failing in one breed, nothing will change by switching. All you will have succeeded in doing is taking a loss in one breed to eventually take a loss in two breeds. Of course, there are exceptions to this, and that might be you just don’t care for the breed you started with. Maybe it was more complicated than you thought, or maybe you need a bigger challenge. In these cases, it would be perfectly acceptable. 

 Remember what got you started. If you abandoned everything you started with, you probably threw out the reason that got you so passionate in the first place. Everyone has ideas of how to make money in cattle, horses, goats, and so on, but nothing will make you money faster than excitement. When you can walk out and love what you are doing, an icy windy frigid day fixing the fence, saving that newborn stuck in the mud or getting kicked in the knee will all be worth it.

Registered cattle are the future.

 Every breed has its best features. Cattle just have more of them. Horses are wonderful and everyone should own one at least once. However, the horse industry found a way to kill their future by abolishing their ability process for meat. Horror stories aside, when you have no way to remove your bottom end stock, your bottom end stock will become your end. 

 Goats are for the most part pretty cute, every petting zoo has them, and they can even comingle with other animals like cattle and horses. The meat hasn’t quite caught on in the United States yet, but time will tell as farms and ranches get smaller. They might be all we have room for years from now. Until then, never did anyone say, “Goat, it’s what’s for dinner!”

 Pigs (Bacon, ham, pulled pork, pork chop…), ya, I’ll give you that. Although, you don’t see a whole lot of kids lining up to become pig farmers. Takes a certain kind of person, and most people aren’t that kind of person.

 In a society that has tried to push for vegetarian diets, beef always finds a way. Going registered means that you as a breeder can stay on the cutting edge and not be priced out of the market. If you know what it costs to make your cattle, the market can be an open door to you. On the hoof, you can leverage your knowledge to sell your cattle for a fair to a ridiculous price. By the pound, “you can sell everything but the moo” (credit to DD). With the digital age at your fingertips, even the moo can now be sold for a profit. Depending on the needs, we can make our cattle bigger, smaller, leaner, and we can even make them faster. By utilizing the tools given by your cattle registry you can take your herd in whatever direction you desire and make money doing it.