The Cattle Business

[strojanherefords]

I was thumbing through a Hoard's Dairyman magazine the other day and came across a letter to the editor that what written about the dairy industry but I find it more applicable to the beef business and especially the registered game.  

Less comfort with Debt

    Thank you for your column "Career takeaway 4: Debt" in the November 2019 edition. I myself am less comfortable with debt than many of my peers. However, I still have plenty of debt because I chose to expand our operations.

    To me, it seems if cows, land, barns, equipment, and so forth don't pay for themselves we need to question why we are doing what we do do. I ask myself that question, and the answer ends up being family, lifestyle, location, taxes and quality of life issues.  

    But I do have this question: How many Hoard's Dairyman advertisers' sales would drop if dairyman would only purchase with cash flow?

    What is missing in all the dairy publications... we must have serious discussions about dairies exiting the business. Of course people who make their living advertising products and services can't discourage their consumer base. 

    So, we will continue to get articles about how to survive with little to no return on investment. Consumers will continue to buy milk subsidized by work weeks twice as long as they have, while farms take large risks with returns of only pin-in-the-sky rewards. We fight economics, supply and demand, each other, government, and environmentalists all for the privilege of selling a commodity below the cost of production. 

    There are possible solutions out there, and Gary Genske has tried to rally the industry around some but it seems an impossible task. 
    Thank you for your thought provoking column

California   Name Withheld

Thoughts?

[hcrc]

I think the issue lies in some producers themselves, you have to be willing to think outside the box and try new things and be painfully honest about what is profitable and what isn’t. However it is never easy to be the odd-ball doing something different than the rest! Personally I think identifying your niche as mastering it, is key to being profitable. My two cents.

[strojanherefords]

This article resonated me on a couple of levels. On a personal level, I have never used debt because I like the freedom and peace of mind that comes with living debt free. I have also noticed that when people use debt they tend to lose sight of what makes their business work. Like Shakespeare wrote "Neither a borrower nor a lender be, for loan oft loses itself and friend, Borrowing dulls the edge of husbandry."
At an industry level, the influx of money in the forms of financing, tax advantages, subsidies, conservation programs and inflation has been destructive to farming and by extension the environment. In order to use that money people are driving up the price of grass beyond the point that a profit could be made even with the best of management. William Jennings Bryan was wrong when he spoke out in favor of easy money in his Cross of Gold speech. The common man is not being crucified on a Cross of Gold but is being weighed down by the shackles of debt.

[cflory]

Your fear of the financial world and its impact, on not only our industry, will come to truth 5-10 years after negative interest rates hit(if)