A few years ago, making money at the cow/calf business was fairly easy. Since then though, these last few years have proven a bit tougher to turn a profit. Randy Blach, CEO of CattleFax, says while it may take a little more work and attention to expenditures, profitability on the ranch can still be done. He offered his advice for producers to Radio Oklahoma Ag Network Farm Director Ron Hays recently, during the Texas and Southwest Cattle Raisers convention in San Antonio.
“It’s time I think for producers in each segment of the industry to just sit back and look at it and ask if there are things we could do a little differently,” Blach suggested. “How do I move from being an average return producer to a high return producer?”
For the foreseeable future, Blach says his team at CattleFax is projecting breakeven prices in the cow/calf segment to reach around $1.40, with calf prices expected to be averaging around the low $1.50s. While that is not a big margin, he admits, the top third of producers that can keep costs reigned in will still manage to be very profitable in 2017 and on into the following year.
“We see a lot of producers sharpening their pencils and trying to figure out how they can move that needle successfully to where they can generate more profitability in their businesses,” Blach revealed. “In this time of unprecedented volatility, we need to be in a position that we can take advantage of some of these good profit opportunities when they arise.”
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