By Blake Jackson
Beef producers have a unique opportunity to solidify their operations while experiencing a period of profitability. University of Missouri Extension economist Joe Horner emphasizes the importance of focusing on three key areas: plants, animals, and business.
Horner stresses the need for proactive drought management, urging producers to plan and build a 50% hay inventory buffer. This investment helps mitigate risk and ensures sufficient feed throughout dry spells. High calf prices in 2024 make this a wise financial decision, with the added benefit of tax deduction.
Rising interest rates, unfamiliar to younger farmers, add a layer of complexity. Horner advises careful cash management and debt reduction to navigate this challenging economic landscape.
The current livestock cycle, ten years into its lifespan, presents favorable conditions for producers. Tight cow inventories and increasing demand for feeder calves point towards a period of strong prices. Horner predicts 2024 to be particularly lucrative, comparable to 2014, as producers hold back heifers.
These higher margins offer an opportunity to invest in the farm's future. Instead of impulsive purchases, Horner recommends prioritizing a "Top 10" list of strategies to maximize profitability and resilience in the face of inevitable market cycles.
Horner's Top 10 Tips for Beef Producers:
- Separate Bull Pasture: Ensure a defined breeding season for uniform calf lots that command higher prices at the sale barn.
- Veterinarian Guidance: Follow vaccination schedules and test for bull soundness to safeguard animal health and maximize calf production.
- Invest in Handling Facilities: Efficient handling facilities minimize stress and injuries, making cattle work easier and safer for everyone.
- Proper Weaning Practices: Wean calves before selling to reduce stress and enhance their value at the auction.
- Drought-Proofing with Hay: Maintain a 50% hay buffer to mitigate the impact of drought and ensure feed availability through dry periods.
- Soil Nutrient Management: Conduct soil tests to determine nutrient needs and optimize pasture yields through targeted adjustments.
- Warm-Season Pastures: Convert pastures to native warm-season grasses for improved drought resilience, reduced fertilizer dependence, and increased summer calf gains.
- Rotational Grazing: Implement rotational grazing systems to enhance forage production, facilitate herd management, and extend the grazing season. Contact the Missouri Center for Regenerative Agriculture at https://cra.missouri.edu/ for more information on federal cost-share funds for rotational grazing.
- Risk Insurance Programs: Understand and utilize risk insurance programs like PRF (drought insurance) https://extension.missouri.edu/publications/g457 and LRP (low-price insurance) https://extension.missouri.edu/publications/g459 to mitigate financial risks.
- Seek Professional Tax Advice: Consult with a farm tax preparer to ensure compliance with IRS regulations and optimize your tax situation.
By implementing these strategies, beef producers can leverage the current favorable conditions to build a bulletproof farm operation, ready to weather any market fluctuations and thrive in the years to come.
Photo Credit: usda
Categories: Missouri, Business, Livestock, Beef Cattle