considering a change in direction

[rockridgecattle]

With cattle in the toilet for a few years now, remember i am in Canada, and the outlook for the turn around is maybe 2010-12, we are considering changing the way we do business. Or should i say our line of work.
Our thoughts (hubby and mine) decrease the cattle herd by 66-75%. Keeping enough cows that one bull can service. We like cows, animal husbandry is something we are good at, but the inputs and the low prices are enough to send one over the edge.
We have considered decreasing the herd health costs. In the way of stopping vaccinations but that would just shoot ourselves in the foot. Then there is the SSS method but that too can shoot your self in the foot. Sooo...
We are thinking of increaseing in the honey bees. We've dabled in it for a few years, took a big plunge this year.
Decreasing the cows would free up some pasture and hay land that needs to be worked and drop in clover. this is good land for clover, the seed is and has remained strong for several years now, with few producers of seed. The clover will require little to no fertilizer. the clover would have two crops, 1 for the bees, and one for seed.
We would cull the cows heavy. Looking at frame, size, problems, milking, calf weaning weight, keeping the best traits. I think there are aready 10 that are growing wheels in the fall due to temperment and such. Our thinking is that someday cows have to come up again. We already have all in infrastucture in place with the exception of a few things. It has taken many years to build that. Keeping a few cows would give reason to keep and not sell that infrastucture. When the market rebounds, we would rebuild.
Right now the hay crop is not so good. We haven't even started yet. 10 days behind. Why, rain and rain and more rain and then the ruts in the fiels that can be created and the risk of more rain today. Aim is to start monday.
don't get me wrong, I am glad and greatful for the rain, we have pasture now, we did not before.
The hay has been stunted due to spring lack of moisture, cool near freezing spring right up until mid June, and now alfalfa weavels. No $ to spray. All the $ is going to fuel. Thank God for crop insurance. But still, how can you justify paying the price for hay? Here eveyone is in the same boat, bad spring, bad summer, bad bugs, everyone is going to be wanting hay. It will just drive up the price.
Just thinking out loud.
There are seasoned cattle producers here. Any of you changed directions on the farm just when things were going well and then crapped out? Did you decide to hang in there for a few more years? Any pearls of wisdom here?
The idea of changing direction is a scary one.

 

[ALX.]

RR I was forced to cut herd size by a drought in 2005.

With what has happened in the interim and the experience gained since, and the money that put in my jeans - it may have been a profitable drought! :lol:

Large and marginal or small and profitable? That is the question. ( Almost sounds Shakespearean , eh? ).

You once did up a really detailed justification on the boards for sisal as opposed to nylon twine - have you done this for your change in direction? Staring hard numbers in the face can help you sleep at night. ( Or send you to Canadian Tire to buy shovels and ammunition!! ). :lol:

Good Luck whatever you do.

 

[1982vett]

Wading off into the unknowns is always a bit scarry. The what if's and uh-ohs are part of everyday life. Quit my job that provided a steady paycheck 3 years ago to put all my efforts into running this place. Was working myself ragged trying to do both and neither was giving me the satisfaction one should have so I knew it was time to do one or the other. Course for 30+ years I was saving and planning to pick up where my parents left off so the paycheck job was always the one on the chopping block. I have spent a fair amount of money and effort on fences and upgrading equipment and better cattle. These outlays are close to being complete. Working on better pasture management at the present and still have some fence needing to be replaced but most labor intensive and expensive work is done and should last for quite a while. And now we are hit with out of control fertilizer, fuel, and weather. So I am looking for direction too. The circle I keep walking seems to bring me back to reducing herd size and stop growing hay to sell. With fewer cattle I should need less hay for my own use and halting hay production for sale will reduce fertilizer and fuel costs. Plus side of this is less time spent baleing hay, don't have to deal with explaining why I want $65 a roll because I have $55 worth of expenses in it, and having hay for them when they want it instead of when it is ready to cut and in the field for them to pick up. Negative side of this is it increases the equipment cost per bale of hay but then the life of the equipment is extended so that could be a wash. Having the most trouble with reducing herd size. Just about had it down to where is sould be and had so much grass 2 months ago that I bought some open heifers with the intention of breeding them and putting them back up for sale this fall or next spring. Havn't had a full inch of rain since I bought them and the grass is basically gone. Plus I like their disposition enough that I don't want to sell them.

Everyone needs a plan on what they want to do. Wandring about aimlessly will probably lead to failure. And of course any plan should not be "set in stone" so to speak. A change here and their and a detour here and their might lead to some nice surprizes.

 

[Central Fl Cracker]

It is sad to say but the cattle business needs to be just a hobby. I do not think anyone can make a decent living unless you are quite large. I get the fat paycheck each week from my day job and spend time with my cattle on the weekends for therapy. Yea sure I would like to do this full time but there is not enough money in the cow/calf business even if fertilizer, diesel and feed come down. Some people play golf or fish on the weekend as a hobby and I can assure the cattle biz is more fun and you can squeeze out a very very small profit for your cattle hobby. I do not think you can make anything paying golf or fishing anyhow. :wave:

 

[Jim62]

I've been thinking about cutting back, too. Only important thing is to keep the ag exemption intact. That's where the profit is in the cattle business. At least around here. If it weren't for that, the property taxes would be about 150% of my total annual income.

 

[Jogeephus]

I think it wise to diversify. I think the honey business is a good idea. I know a few beekeepers and some others that make cane syrup. I think the old saying about not having all your eggs in one basket is sound advice. It has helped me on more than one occassion. Been able to lose on one venture yet make it up on another. Usually, I have been able to make money on three or four ventures and only lose on one. But its getting harder to make things work out with the economy and the weather the way they are. I wish you luck on the diversification and if there is anything that has helped me more than any is the advice I was given about making changes slow and gradual.

 

[rockridgecattle]

You once did up a really detailed justification on the boards for sisal as opposed to nylon twine - have you done this for your change in direction? Staring hard numbers in the face can help you sleep at night. ( Or send you to Canadian Tire to buy shovels and ammunition!! ). :lol:

good memory
cost analysis is happening as we speak.
but on the outside since we got into bees we have more money in our pocket. Our bank account is a little firmer than this time last year.
When it comes to seed production, we know that the land has to be worked any how. The clover seed has been steady for several years now. We only have a very small combine so we are considering custom combining to eliminating the cost of owning a bigger combine.
The bees we are set up for it now. Increasing however means a little more extraction equipment....in time.

It is sad to say but the cattle business needs to be just a hobby. I do not think anyone can make a decent living unless you are quite large. I get the fat paycheck each week from my day job and spend time with my cattle on the weekends for therapy. Yea sure I would like to do this full time but there is not enough money in the cow/calf business even if fertilizer, diesel and feed come down. Some people play golf or fish on the weekend as a hobby and I can assure the cattle biz is more fun and you can squeeze out a very very small profit for your cattle hobby. I do not think you can make anything paying golf or fishing anyhow. :wave:

both my husband and i worked off the farm. Him for near 9 years and me since 2003. He got laid off and that was the best thing for the farm. but we do have off farm income.

I've been thinking about cutting back, too. Only important thing is to keep the ag exemption intact. That's where the profit is in the cattle business. At least around here. If it weren't for that, the property taxes would be about 150% of my total annual income.

thank fully that does not apply in Canada. If you farm, you farm.

So I am looking for direction too. The circle I keep walking seems to bring me back to reducing herd size and stop growing hay to sell. With fewer cattle I should need less hay for my own use and halting hay production for sale will reduce fertilizer and fuel costs. Plus side of this is less time spent baleing hay, don't have to deal with explaining why I want $65 a roll because I have $55 worth of expenses in it, and having hay for them when they want it instead of when it is ready to cut and in the field for them to pick up. Negative side of this is it increases the equipment cost per bale of hay but then the life of the equipment is extended so that could be a wash. Having the most trouble with reducing herd size. Just about had it down to where is sould be and had so much grass 2 months ago that I bought some open heifers with the intention of breeding them and putting them back up for sale this fall or next spring. Havn't had a full inch of rain since I bought them and the grass is basically gone. Plus I like their disposition enough that I don't want to sell them.

Everyone needs a plan on what they want to do. Wandring about aimlessly will probably lead to failure. And of course any plan should not be "set in stone" so to speak. A change here and their and a detour here and their might lead to some nice surprizes.

kind of where we are at right now as well. Reducing the cattle would reduce the input costs especially fertilizer.

I wish you luck on the diversification and if there is anything that has helped me more than any is the advice I was given about making changes slow and gradual.

thank you

 

[smallrancher]

RR, I like your thoughts about diversification, as I think that is the future of farming. And I like the bee idea, and I would like to learn more about it myself. I don't think there is anything wrong with downsizing to be more profitable, to an extent. HOWEVER, you said when the market rebounds, you would rebuild. Which means you would be buying at a higher price as well, wouldn't you be better off to only cull the least profitable up to a certain number and therefore be in a good position already when the market does rebound? I'm a firm believer that we all know the old rule of "Buy low, Sell high", but 98% of us buy high and sell low, or in the case of what your talking about doing, sell low and buy high. I think the other 2% are the wealthy. I think it is just like real estate, in the U.S.A, for the last 10 years everyone has been getting into the real estate market because it has been good. Now that it is in the toilet, everyone wants out. Just some thoughts, and good luck with your decision.

 

[3waycross]

For what's it worth I admire your approach,not doing anything drastic or without a LOT of planning and thought. Shows a lot of maturity and the ability to face adversity without panicking. Hang in there and good luck with the Bees.

 

[SRBeef]

I don't know about the markets in Manitoba but in North Dakota there would be many neighbor farmers interested in renting your land. Depending on how much land you have, could you rent out part of it? Leave enough for your smaller cattle herd and your bee keeping.

Renting some land out can, with a well written contract, provide some additional income while you wait out the cattle markets or build your honey business. Honey sounds exciting. There you have a unique product which should provide several marketing avenues. We have a beekeeper in our county who sells his honey direct at stores everywhere. I usually pick up a bottle at the hardware/feed store.

I think the key is to get out of being the middle man. Maybe work with a processor to just sell a few high quality steers or hiefers as beef rather than on the hoof? Is there a market in reasonable distance like Winipeg?

Lots of possibilities. The traditional cattle marketing is going to have to change. With costs going up everywhere the price of beef must go up. Unfortunately cattle producers are such a diverse group that they have little power over pricing. The packers want to buy low and sell high. That is the way of business. As long as producers continue to sell at whatever price the buyer will pay regardless of costs things will not change.

Maybe rent to a row crop producer for a couple years - make sure however you get some help in writing a solid contract signed by both parties. Best of Luck.

 

[EAT BEEF]

Just some thoughts if you called pretty hard on your cows this year and kept most of your heifers, might put you in a good position to rebuild or sell the heifers at a heavier wieght in the spring.I don't know much about your market in canada but here cows are selling decent and the bigger wieght calves are doing ok.Of course you have to have somthing to feed the heifers maybe you would be better off selling the extra feed.??

 

[larryshoat]

My thoughts would be that if you like doing the bees better than the cattle I would do that , but if not I would stick with the cattle . The grass always appears greener on the other side and I'm sure that with the bees sooner or later some kind of problem will present itself . I always say I'm probably a better farmer than I am anything else so I might just as well stick with that .Whatever you decide my prayers and best wishes are with you .

Larry

 

[rockridgecattle]

Thanks for all the replies. It gives us something to think about. We love cows and it is something we do together. Bees is more my thing cause the hubby is fencing, land working etc during that time. He does help in the honey house and pulling honey. But it is tough being pulled in so many directions right now. Off farm job, cows, bees, sales, life. Something has to give. So far the tax analysis says bees are profitable, if you sell a good chunck direct.
I have taken some of the things i've learned about cows and put it to use with the bees. For example, if a hive is poor, and you've done your best within a time frame, time to tear down the hive. Those tough calls made in cattle are simillar in bees. You get the weather issues like in cows, same as haying. Disease is something we have to deal with with cows and bees. But the infrastucture is not as costly. To start up a hive is not as costly. To lose a hive is not as costly either.
Some of the differences are, no high vet costs. We are thankful for our vet and never balk at the prices, but it is eliminated. As well, you do not have to have the land base for bees. it is easy to rent a small 50x30 foot plot and place the bees for the summer. We can get two crops off a chunk of land. Feed for the bees, and or feed for the cows or clover seed.
Preditors are still a nusancein either commodity.
Right now honey is on the rise, cows on the decline.
Cool has me worried, I mean nothing bad against it but lets face it, it will have an impact on both of our markets. Especially Manitoba. Why you ask, Our cattle either have to go to Alberta or Quebec for slaughter, the cheaper route was the south. We have tried to get slaughter plants established since the BSE crisis but with a socialistic government like the NDP in power in the province, they are hardwired to the enviromentalists. In Manitoba, nothing changed to cut our dependance on the east, west or south. Our fault really. Around here in our area several guys have retired from the cows. We also know of a few more who are younger or around our age who are out this fall.
We have until fall to make the choices, to see what the market will do, to see what the inputs are like. As well there is a semiar happening this fall for ranchers on how to get through these tough times, on the changes we need to make in order to survive.

Thanks for all the input.

Rockridge

 

[ALX.]

Whats your situation for grains RR? Corn, barley, wheat, beans?

 

[hillsdown]

Hang in there RR you two haven't worked your @sses off and putting up with all the BS for nothing... :tiphat:

Diversify if need be,,, but Canada (the world) needs producers like you that know what the h@ll they are doing.... :nod:

Ask me how my month has been going..... :cry2: ,,,but like they say pull your pants up, you are a big girl now.. :lol2:

Sorry I had to edit this after reading as I don't want you RR to think that I meant this to pertain to you "but like they say pull your pants up, you are a big girl now" that was meant for me and all the complaining I have been doing lately...

I feel all that you are going through and just know that you are not alone..

 

[rockridgecattle]

Hillsdown, now i have that tune in my head..."I'm a big girl now!"
oh yeah we will hang in, maybe with just not as many head. How else will i afford good cuts of meat? LOL Thanks for the pep talk, and back at ya...keep your head up...hows your month going?

ALX,
To the north and south of us there is good grain and oil seed land. About 20 minutes away either way. To the east and west lakes, and rock. Our area is slightly rocky. We can pick for days, till again and pic again for days. We worked up chunk of land, we had to leave the center acre cause the stones were so bad they were wrecking the equipment. And if there are no rocks, it's swamp slough hay. We are good cattle country, and alfalfa country. We grow our own grain when we want to work land but that is about it. Guys near by plant corn for grazing or sialge. We also have problably half of our land still with bush. We are clearing some of it but we also want to leave some for the wild life like the deer, rabbits, grouse and such. Alot of white tail around here. As i type there is a deer bothering the dogs...it wants the corn in the garden. LOL