Custom Backgrounding/feeding in Minnesota

[customcattle]

My wife and I currently live in Nebraska where I am an Agriculture Education Teacher and manage a small absentee owner beef operation of 75 pair. It has always been a dream of mine to run my own beef operation, and have quite a bit of experience in cow/calf operations, running yearlings on grass, and backgrounding calves on grass in Wyoming, Nebraska, and Oklahoma/Texas Panhandles. We have been putting some thought into starting an operation in MN, as that is where my wife is originally from, and trying to build from something somewhat small (at least small for what I have experience with). We and a partner (who also has experience in a family owned feedlot/cow calf operation) would like to start a custom backgrounding and feeding operation where we would take in around 400-500 5-6 weight calves and either pasture them on grass, and then send them back to the owner, or preferably keep them and feed them to market weight and help the customer to market their fat cattle.

We have done what calculations that we can and have a price in mind that we could afford to pay for land and materials in order to build a small feedlot. The thing we are not certain of is the demand for an operation like this in that area. Would producers be interested in a situation where they would be paying for pasture and care of their cattle. Any input or thoughts on this would be much appreciated as well as any resources.

thanks a bunch

 

[LJCC]

What part of Minnesota are you looking into?

 

[customcattle]

We don't have any where specific in mind in the state and should have been more clear in the fact that we are looking at getting closer so Minnesota and the surround states. Mostly just looking into getting closer I guess.

 

[Stocker Steve]

Custom backgrounding is not common here. Most cow/calf operators are small and sell at the sales barn. A few are bigger and may sell on video.
Backgrounding yards do exist but they usually buy mismanaged calves and make money on the marketing. A few feed calves to slaughter on a mix of local byproducts and ex dairy forages. The owners sometimes buy lake homes so they must be doing OK.
Stockering is rare. Local habit is to hay off anything that does not have lots of trees on it. If there are a lot of trees than the deer hunters buy it... Even so, there is some serious $$$ to be made if you have the connections to get leased land.

 

[customcattle]

We have had the most luck finding places for sale in central, north central, and east central Minnesota. I have done some research on the beef industry in MN and found that most producers are smaller and produce less than 100 head, probably mostly due to lack of pasture resources. I guess my assumptions when we started looking into this were that there would be a demand for an operation which would provide the service of care and the grass/feed in order for producers to get more gain on their cattle at a reasonable cost.

My opinion that a cattleman's reputation lies on the quality of cattle that they are producing, and if a producer is able to market a higher quality product and sell private treaty to commercial or private feed lots with cattle that are coming closer to market weight their profits would be higher and they would be able to build a business relationship with those feedlots which are looking for high quality cattle in order to maximize their profits as well. Again these are all assumptions I have and we all know what assuming gets you, but if I can get a return buyer on my cattle year after year then I know that my profits are going to go up.

Again please correct me if I'm wrong in my assumptions and any input is greatly appreciated, and thank you for the replies thus far.

 

[Stocker Steve]

I would think you want to map out the ethanol plants, and map out the sugar plants, and then locate for their wet byproducts. This would be a big competitive advantage.

 

[ChrisB]

I've wondered about the lack of custom feeders in my area before. Is it unpopular to use custom feeders because there aren't any in the area? Or is the reason there aren't any in the area because there are few people wanting to send their cows to a custom operation? Backgrounding on grass alone would be tough because of the shorter growing season since you would only be able to turn calves over once a year. But I think there are advantages to feeding cattle up here such as numerous ethanol plants and cheap corn. I think you would have to start by feeding calves for yourself until others believed that you know what your doing before they would take a chance on a stranger losing a bunch of their freshly weaned calves.

 

[customcattle]

Thanks for the advice, I have been looking for land that would be in the same proximity as to find cheaper feed, but have found more land in northern and east central MN. I have a couple more questions and am sure I will find more to ask later.

From my research I have found that a person can expect stocking rates to be anywhere from 1.5 to about 5 acres per cow stocking rate. Again I am not able to be there just wanting to find out as much information as I can. Would this be an accurate number to figure for a stocking rate and if so would it be true for a year or month?

We have also found a lot of properties that have a number of wooded acres on them and have thought about the possibility of clear cutting portions of those acres out. I know there is a market for logging in that part of the country, but know absolutely nothing about it.
How many cords/acre could a person expect?
How much would a logging company pay/cord?
What kind of reclamation would the logging company do?
Would they stump it out or would that be the landowner's responsibility?
If it is the land owner's responsibility would there be a way to recapture some of the initial costs of stumping those acres? (ie. chipping stumps for shavings or something else?)

I know that the logging issue has a lot of variables including stand maturity, species, and probably a lot of other things, but just an idea would be very much appreciated.
thanks again

 

[customcattle]

I've wondered about the lack of custom feeders in my area before. Is it unpopular to use custom feeders because there aren't any in the area? Or is the reason there aren't any in the area because there are few people wanting to send their cows to a custom operation? Backgrounding on grass alone would be tough because of the shorter growing season since you would only be able to turn calves over once a year. But I think there are advantages to feeding cattle up here such as numerous ethanol plants and cheap corn. I think you would have to start by feeding calves for yourself until others believed that you know what your doing before they would take a chance on a stranger losing a bunch of their freshly weaned calves.

I have wondered about that being a problem with a person coming in with no reputation in the area taking on other people's calves. The goal would be to get to the point of feeding our own calves, but with the upfront capitol a person would need in order to make it worth it would be a lot. People wonder why there aren't many young people wanting to get into agriculture and the fact is we can't afford to do it with land and input prices it makes it pertnear impossible.

 

[bmoore87]

I've wondered about the lack of custom feeders in my area before. Is it unpopular to use custom feeders because there aren't any in the area? Or is the reason there aren't any in the area because there are few people wanting to send their cows to a custom operation? Backgrounding on grass alone would be tough because of the shorter growing season since you would only be able to turn calves over once a year. But I think there are advantages to feeding cattle up here such as numerous ethanol plants and cheap corn.

I would agree i would focus more on a feed yard setup and the grass and pasture would be a side benefit to run calves on. Most calves are weaned in the fall so backgrounding to pasture would be tougher. Also you could then custom feedout cattle as well if you don't have back rounders coming in at a time of the year.

I would look for patches of sandy ground near byproduct plants since it works well for yards. Try talking to some large feed lots in your area they may give you a contract for a certain number of cattle on feed each month to keep you going if back rounding is slow.

Good luck.

 

[customcattle]

What is the bred heifer market like up in that part of the country? Do most people keep replacements or are they more apt to sell and buy bred replacements?

 

[Stocker Steve]

What is the bred heifer market like up in that part of the country?

Most small operators raise their own.
Bigger operators vary. Some think they have the best genetics, and some think they can buy cheaper.
Top heifers sold in the sales barn tend to end up in the Dakotas, since the pricing is higher out there.
Look up www.perhamstockyards

 

[customcattle]

Wow, looking at the market report from this week the market appears to be pretty soft in that part of the country. Bred heifers down here are going for up to and including $3000/head. The prices I have seen are from private treaty sales and a special bred cow sale in the town down the road. As in most of the country I am sure most of the cattle go through the sale barns, but is there much of a market for private treaty sales?

 

[shortybreeder]

Just wondering if this thread is still active before I post feedback... Is customcattle still checking back? Looks like he/she hasn't posted anywhere else.

 

[ChrisB]

I don't know if he is still checking in or not, but I would sure be interested in your thoughts.

 

[shortybreeder]

I don't know if he is still checking in or not, but I would sure be interested in your thoughts.

Well, first of all the location. He mentioned buying some land in northern MN and clear-cutting to make a pasture. I don't think that's a very good idea because there are very few farms up there and nobody's going to want to ship their cattle ~5 hours to a backgrounder. Also, depending on how far north you go, you could have snow 8 months out of the year which means 8 months of buying grain from who knows where (not many feed stores or corn growers up there). However, I would be very interested in a custom raising/backgrounding operation if it was nearby (southeastern/central MN) because I don't have the facilities to raise heifers separate from my cows unless they are being raised for showing. I was also going to suggest he look into Thousand Hills Cattle Company http://www.thousandhillscattleco.com/ because they take in special cattle and raise them on grass, but they buy the calves up front and direct-market grass-fed beef.

 

[Stocker Steve]

I would think you want to map out the ethanol plants, and map out the sugar plants, and then locate for their wet byproducts. This would be a big competitive advantage.

+1

 

[customcattle]

Just wondering if this thread is still active before I post feedback... Is customcattle still checking back? Looks like he/she hasn't posted anywhere else.

I haven't had a chance to check back in here in a while, but am back to a computer now and just checked. I am still interested in any feedback I could get. Thanks

 

[Jake]

There are a plethora of small back grounders in our area. Most times it is hard to get find an empty pen. What makes them successful is the ability to use cheap roughage (corn stalks, wheat straw) and ethanol byproducts to cheapen the rations. You can make cheap lots out of high tensile fence and a TMR wagon with scales would be a necessity to make sure you have an exact handle on what your inputs are. Typical outfits around here are market price for feed plus $.30 or $.35 per head per day for yardage.