While on a phone call with a potential client last week, he asked us, "Should we continue leasing out the grazing on the ranch, or should we buy some cows and graze it ourselves?" Our recommendation in this case: keep the grazing leases (although we can certainly assess them and ensure everyone is getting a fair rate and things are going well) but now is not the time to buy cows. Why? Due to a low national inventory, cow prices are way up. Like real estate, you don't buy cattle (especially to build a herd) when the prices are high. It's enticing when you're looking at how much calves are currently worth to buy cattle which, in theory, will pay for themselves in two years. However, cattle are a commodity, and high prices are never guaranteed, even when forecasted to be so. Of course, each ranch is different. Long-term goals + short-term opportunities, cash flow, labor, infrastructure, feed + forage all play a part in making these decisions. But, right now, it's not the time to buy cows in most circumstances.
This is why cash is king. When times are tough, if you have cash, you can buy when other people don’t have the money and can’t get it. There have been some amazing real estate deals to be had recently with mortgage rates high and no buyers. If you had cash, you could get some great deals.
Teaching stockmanship methods which allows your cattle to behave as a migrating herd without adding fences. Start biologically correct grazing without adding fencing infrastructure.
8moI've never understood why banks are willing to loan money on cattle when prices are high, yet not touch them when prices are low. Almost like they've never heard of "Buy low, sell high."