Additional profit centers can be a means to generate extra income.
By: Randy Saner, Nebraska Extension Educator
If you are thinking of bringing a family member back to the farm, below are some possible profit centers that could support another family member.
• HEIFER DEVELOPMENT PROFIT CENTER
We have the smallest inventory of beef cattle since 1951. The beef cow inventory is the lowest since 1962 at 29 million head. Improving drought conditions through the end of 2013 and continuing through 2014, coupled with strengthening cattle prices has sent strong market signals for expansion of the beef cow inventory. Research conducted by Rick Funston, University of Nebraska-Lincoln Beef Cattle Reproductive Physiologist indicated you can lower feed costs by $70 to $100 dollars by developing heifers on pasture with limited supplementation at lower breeding weights. Also, heifer calves are at their lowest value at weaning. The price differential between steers and heifers is reduced when heifers are marketed at heavier weights. Why not cull the bottom 5 to 10% and save the rest for breeding, of which some could be culled before breeding if problems occur. Those heifers that are open at early pregnancy check can be marketed to feedlots and those that are bred can be retained or marketed as bred heifers. If you have extra grass, hay, or cornstalks they can be used to develop heifers with the addition of a protein supplement. On December 1st a 500 to 535 lb. heifer was worth an average of $291.38 per cwt. or a total of $1491, an 836 lb. heifer was worth $1828, and a bred heifer was worth $2400 to $3000. As the heifer gets bigger or pregnant her value increases but so do her costs. Thus costs need to be considered when looking at this profit center.
• ADDING SMALL RUMINANTS (SHEEP OR GOATS) TO THE OPERATION
The biggest obstacle for cattle producers to add sheep and goats to their operation is the lack of knowledge on how to care for the sheep or goat (small ruminants) and the stigma of raising something besides beef in the beef state. Another problem is fencing to contain the small ruminants. A fence that will hold a cow will not hold sheep or goats. One way to solve this problem is to hire a shepherd to care for the small ruminants. The shepherd will keep the small ruminants herded inside the pasture. This can be done at a reasonable cost. Another method would be to add a couple of offset electric fence wires to the conventional fence. You must have a good fencer and it must be grounded properly, which means several grounding rods. As many as six grounding rods may be needed, depending on the length of the fence. Predators can also be a problem for small ruminants. The key is to have enough guard animals that will protect them. I like guard dogs because they will attack and kill any predator that comes into contact with the small ruminants. The key is that the dogs stay with the flock of sheep and/or goats. If they don’t you will have dead sheep and goats. The other problem with dogs is they will kill any other ranch dog or pet dog that comes into contact with the small ruminants. You may also use donkeys or llamas but they will not be able to kill the predators they will just try to run the predators away from the flock. Donkeys or llamas will not be able to protect the flock if there is a predator pack attack. Some of our on-farm research in Nebraska has shown that you can add one ewe per cow without reducing your cattle stocking rate. This can increase your profitability by $81.33 per ewe added not including land costs. Cost figures are from the Terrell Ranch near Alliance, NE.
• ADDING A HUNTING LEASES TO THE OPERATION
Hunting leases continue to grow as a viable profit center. There are many different types of hunting leases. I know of one instance where the producer leases ground to a hunting dog trainer. This trainer trains dogs for national competitions. By doing this the producer has increased the number of quail on his operation due to the release of quail to develop the hunting dogs. The producer also hires out for hunting large game such as deer. They have lodging which improves the experience for the hunters. My research showed the average lease per acre for Nebraska was $5 per acre with a range of $.51 per acre to $20 per acre. Some producers also hire out by so much per gun, plus a facility cost for the hunters staying overnight. Some charge $100 to $250 per gun per day. Others are charging $400 for a five day deer hunt. Managing for wildlife will increase wildlife numbers and can improve rental rates. Liability is the biggest risk with hunting leases. Extra liability insurance is important and make sure you always have visitors sign a liability waiver before entering the operation.
• ADDING AN OPEN COW ENTERPRISE
Open cows are worth less than bred cows in most cases. Either breed your open cows or buy open cows and have a vet check for problems. Those that check out okay reproductively, should be synchronized and breed either by AI or bull. The price of cows on December 1, had solid mouth bred cow 1260 lbs. to 1535 lbs. at $2400 to $2800. Open cows weighing 1405 lbs. to 1750 lbs. were worth an average of approximately $1956. You can add around $400 to $800 for a bred cow but you will have to keep her for at least 45 to 90 days before selling. If you have feed or roughage available at a reasonable cost this can be a profitable option. Those thin cows you could add condition and market as a slaughter cow if they have a reproductive, attitude, or structural problem.
• CORNSTALK GRAZING AS A PROFIT CENTER
Cornstalk grazing is another profit center for corn farmers or cattle producers who have access to stalks. No supplementation is needed unless a cow is below a condition score 5 or you have a higher stocking rate than 1 cow per acre for 45 days on cornstalks that yielded at least 180 bushels/acre. The cost of cornstalks will vary depending on what is required by the landlord and the number of cows in a given area. The cost can actually be cheaper than the cost of winter range. Research data shows either an improvement in yield or no difference in yield by grazing corn stalks at our recommended stocking rate. Two good UNL resources are EC278 Grazing Crop Residue with Beef Cattle and EC290 Grazing Cornstalks A Decision Tool to Evaluate the Economics.
Additional profit centers can be a means to generate extra income. Once you determine what your goals and needs are you can best determine the profit center that may be the best fit for you and your operation.