Thursday, March 15, 2012

Raising Cattle for Profit by Minimizing Risk

Raising cattle for profit – How much investment are you willing to make and risk willing to take

If you ask most ranchers, they will tell you that they want a uniformed herd with their cattle all being of the same breed and color. Most figure the best way to raise cattle for profit is to sell in calf groups of cattle of all the same size and color. This naturally makes sense because this is the way most cattle buyers buy.

This is not the approach I have to raising cattle for profit. A few weeks back I purchased a Charolais bull calf to bottle raise. It was only a few weeks old that the mother had passed away. I normally don’t pay this much for a calf that I’m going to bottle raise but the rancher was a friend of mine. He didn’t have the time to handle the feeding and caring, and since I already had others calves on the bottle I knew it would fit in just fine.

100_3956It was the highest price newborn calf that I had ever purchased to bottle raise, but well worth the price. He will bring twice the amount of income than the normal Holsteins and other calves that I am currently raising.  For an extra bonus, he was also the easiest calf that I have ever started on the bottle. He took to it right away from the first time the nipple hit his mouth. Only if all the calves I get are this easy to start off.

I don’t set out to buy the top dollar calves because I know it adds a great deal more risk. The chances of any calf getting sick or having problems is the same as any other. I like to keep the risk of the initial investment down to what I’m confortable when buying cattle wither it is heifers, bulls, cows, or bottle calves. I not looking for homeruns with every one I buy. I just want a good solid calf that will return a nice profit.

No matter how good of cattle rancher you are, there will be losses. The ideal is raising cattle for profit, which can be hard to do if you over expose yourself to the risk of these losses.  This does make for an interesting business decision.

100_3953The cost of feeding and raising a top dollar calf is the same as any other calf. It would be more profitable to raise the top dollar calves.  You would see more return for your money for the same amount of raising cost,.but you have the wildcard of loss That risk that hangs over you just waiting to strike at the wrong moment taking away your chances of raising cattle for profit.

I’m looking for that balance of initial cost, expense of raising, and final selling. Adding in some of the top dollar calves could improve the bottom line, but I want to be careful not to add to many. I think of the story of The Tortoise and the Hare. Slow and steady to win the race.

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