Kevin is a third-generation livestock farmer with a passion for sustainable farm management, holistic practices, and multiple enterprises.
Explaining Inputs and Outputs
Making money in any venture is all about outputs and inputs. In the stock market, you buy low and sell high. In manufacturing, labor costs must be lower than the product sells for. It’s the same with cattle, goats, and other livestock on your farm or homestead; control your inputs and your outputs will be greater. A lot of these ideas aren’t normal operating procedures on the modern-day farm, but if implemented they will take your profit margin to the next level.
1. Buy Hay
“Buy hay you say! But you said I need to control my inputs and already you’re telling me to buy my hay.”
Think about this. How much does the average farmer or homesteader pay for hay versus just the interest on the hay equipment? You gotta have a cutter, rake, tedder, baler, and wagons. That can be expensive. On our farm, we buy our hay cheaper than we can make it. We have more pasture and are able to stock more livestock. We have more time in the summer to work on streamlining our operation and controlling more inputs. My friends are out making hay and I’m laughing all the way to the bank.
2. Rotational Grazing
“Ok, now you’re gonna tell me to build more fence. Hello, that's an input,” you say.
Yes, it is an input that cancels out other long-term inputs. You have to consider livestock health; if you don’t your outputs will suffer. Rotational grazing maximizes pasture by allowing greater rest periods and increased yields. It eliminates intestinal parasites in livestock controlling medication and vet costs.
This is where pasture management gets exciting. On our farm, we practice multi-species grazing. We raise and sell organic beef and market meat goats. The calves are the leaders in our leader/follower multi-species rotational grazing system. They eat mostly grass and legumes and are allowed 5 days on each paddock. The goats follow in the same paddock after we move the calves and clean up the field of iron weeds and such. We get more bang for our buck, more outputs for less input, and healthier animals.
3. No Fertilizer
Go ahead, call your local farm supply and let them know you won’t need that fertilizer this year. I know, I know, you can’t have good pasture without putting on some nitrogen. You have all the nitrogen you need coming out of the backside of those animals in the field.
Also, you know all that hay you bought; someone put nitrogen on that. So you are getting fertilizer for free in a sense. Since you have a good rotational grazing system in place and are no longer using wormer, the soil biodiversity and organic matter have increased further negating the need for fertilizer.
4. Rent Equipment
Believe you me, there is nothing like rolling down the road in a $50,000 3/4 ton truck with a 24’ cattle trailer that says I am a success. The ironic thing is most of the farmers with that rig aren’t. If you saw their financial statement you would run for the hills.
You have options. Cattle haulers will deliver your cattle the few times of year you need it for a fraction of the cost of owning this equipment. If you still like to haul your own cattle consider an equipment rental store. I recently rented a trailer for $50 to move some calves.
There is a lot of equipment used on the farm or homestead only a couple times of year that can be rented. You don’t need a new truck to beat around the farm or a 100-horsepower cab tractor to take out some hay. We have a 55 horsepower long tractor that is used to move hay and build fence mostly, and it’s enough. Rent that no-till planter, post driver, trencher, or bush hog.
5 Control Feed Cost
This is a tough one, I’ll admit. But, with a little out-of-the-box thinking it can be done. I read an article once about a guy who went to an area in the city where everyone disposed of their Christmas trees and loaded 'em up. He didn’t feed hay most of the winter to his goats. Got a fence row you need to clean? Give it to the goats. They will thrive and guess what? The un-eaten limbs can be burned and the ashes are great for balancing soil PH. Or you can use them in compost and bedding. This is but one way to control this input cost.
Another great advantage of rotational grazing is an ideal known as stockpiling. Let a couple of those fields not get grazed on the last pass-through. Animals can eat this in the winter; they’ll even dig through the snow for it. Some farmers as far west as Missouri and even way up north are not feeding hay all year. Others get three months or so. Whatever you get, it saves money, and the protein levels in stockpiled grass will supersede hay of the same variety every time.
Whatever method you use, and the options are as limitless as the mind can conceive; it saves on inputs. While your buddies are out making hay you can be planning and researching ways to cut costs on feed.
6. Control Infrastructure Cost
So you have some hay to keep dry and some cattle that at times may need shelter. Do you need a pole barn or hoop structure to do this? This may not look aesthetically pleasing to the eye, but consider using a tarp to cover hay. A tarp can be anchored to an existing fence, barn, or by temporary poles you cut cleaning out the fence row.
What about animals that need to be housed in winter? Do you really need tongue and groove siding lined on the inside of these stalls and fancy steel fabricated doors? Make your barns functional and efficient and let the extra cost stop there.
7. Keep Your Finger on the Pulse
Farming is an investment; the same rules apply to farming as stock trading. You have to buy low and sell high. It is important to know the market in your area. Look at sales reports from numerous markets for different times of the year. Make notes, keep a journal or even chart this information. When do you buy? What is the optimum time of year to sell? Since you now have better control of feed cost you have greater flexibility to adjust your breeding seasons to get the most dollar for young livestock.
Are there other markets? We sell freezer beef that we have processed, and you can bet I research the best places to butcher. How about ethnic markets for goats or lamb? Is it feasible to ship your animals on the East Coast to get another $1.00/lb? How about looking for a distributor who will buy niche livestock? Some people pay a premium for grass-fed vs feedlot cattle. The point is to do your research. Do it under the air conditioner while your friends are out making hay.
I truly hope this article hits home and helps to improve your inputs/outputs to make you more profitable. Farming can be exciting when you start to think outside the box. Dare to be different; successful people always are.
Profitability in Beef
- 8 drivers of profitability and how to manage them to make more money | Beef Magazine
Making money with cattle is hard, but it’s possible and it’s possible to do it consistently. Here’s a review of what you can do to improve the bottom line.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
Kevin Howell (author) from Maysville KY on September 05, 2019:
Thanks I appreciate the comment
RTalloni on September 05, 2019:
The concepts you go over in this post are useful to keep in mind and encouraging for someone considering starting a small livestock farm.