Knowing how to raise livestock and knowing how to run a business that raises livestock are two separate things.
Indeed they are. I have had the same experience in recent months–lots of inquiries, mostly from younger folks, about how to get into the ranching “business.” As usual, old Dave has a lot of good common sense advise along those lines. — jtl
by Dave Pratt via Ranching for Profit Blog
The Ranching ForProfit School is intended for ranchers. But every year some people who want to get into ranching attend the class to build a business plan to test the feasibility of pursuing their dream. A week hasn’t gone by in the last couple of years when I haven’t had an email or phone call from someone interested in attending our course because they want to start a ranch business. Some are from young people about to get out of the military. Some are from people who’ve been working in the industry for years but want a place of their own. Others are from people with careers in town who envision ranching as a healthier, happier way to live and raise a family. Here is an excerpt of an email I received last week:
I have 20 years of experience in the cattle industry, all of it working for someone else. I‘m in my 40’s and want to start my own operation. People tell me that with land prices and cattle prices as high as they are I will never make it. My feeling is that if I don’t take the shot at my dream now I will never get it. Is it too far out of reach to start a cattle operation in today’s market?
I’m never quite sure how to respond. On one hand I don’t want to give people false hope. But I don’t want to be a wet blanket, smothering their dreams, either. That people have started ranches from scratch shows that it is possible. But for everyone who builds a successful livestock business in today’s environment, I’ll bet there are 3 who have failed.
Some of them fail because they don’t know how to raise livestock. Those of us who grew up ranching take for granted knowing the right way to set a brace, vaccinate a calf or the hundreds of other routine chores. Most people new to ranching don’t realize just how steep the learning curve will be. Some fail because they don’t know how to run a business. Knowing how to raise livestock and knowing how to run a business that raises livestock are two separate things. Others fail because they have a romanticized vision of ranching that has no basis in today’s economic and financial reality. In any case, a lot of people sacrifice a lot of time, energy and money to pursue their dream, only to find the result more closely resembles an expensive, exhausting nightmare.
That’s why I ask anyone who tells me they want to start a ranch business, Why do you want to do this? My intention is not to talk anyone out of anything. It is to clarify their motives.
The answers usually include, I want to work with livestock. I want to work outdoors. I want to raise my family in a rural area with rural values. I want to produce my own food. I want to be my own boss. They believe that starting a ranching business is the answer to their dream, but there are usually faster, cheaper, easier, less risky ways to accomplish these things. Many of these things can be achieved by working on someone else’s ranch. They can also be achieved by working in town, buying or leasing a few acres and getting a couple of cows or sheep. There’s nothing wrong with a hobby.
As in the case of the person who sent me the e-mail, some people aren’t interested in ranching as a hobby. They know how to raise livestock and nothing short of having their own operation will satisfy their hunger. What would you say to them?
In today’s environment of high land and cattle prices they’ll probably need to lease, rather than own, the land. They should probably look at options for leasing cattle or custom grazing rather than buying cattle. They may want to explore partnerships with investors or established ranches that may not have successors. All of that is easier said than done. You still have to be in the right place at the right time. But you also have to be the right person. By that I mean you have to be able to recognize an opportunity, adapt to the situation, and work with people. If you are going into ranching because you get along with cattle better than you get along with people, you’d better keep your day job. Getting the lease and the custom grazing contract will depend on your people skills.
I’ve written about getting started in ranching in Healthy Land, Happy Families and ProfitableBusinesses. I’d like to hear your thoughts about it. How would you advise the person who sent me the email?
You might also be interested in: Getting Into the Cattle Business: Buying a Ranch and Making it Pay
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