Wednesday, December 3, 2008

Breaking Away from the Status Quo

Most cattle farms in Kentucky are "cow-calf" operations. By this I mean, the farms usually keep only stock cows (mature female cattle), and each of these cows, if everything goes well, gives birth to one calf each year. The calf leads an idyllic existence for the first 6 to 9 months of its life, nursing its mother and picking at fresh grass and hay in wide open pastures. When the calf is old enough, it is weaned from its mother and taken to a local stockyard where it is auctioned by the pound. The picture at left shows two of my Wagyu cows and one of my Charolais cows taking it easy with their calves in the field. Notice the bluegrass in the background?!

The buyers at auction carefully group the calves according to weight, load them on train cars and semi's, and send them to live out the rest of their lives on feedlots in the Midwestern states like Nebraska, Iowa, and Kansas. Most of the animals sold at market in Kentucky are calves weighing less than 700 pounds. Cow calf operations in Kentucky can be small affairs (less than 10 cattle), but the feedlots in the Midwest are often large scale operations. (see the stock photo at right).

If the feedlots and meat packers are all out west, why aren't all of the calves born out west? There are two reasons that I have been told by reliable sources and a third that I can deduce:

(1) Cows are not like pigs and chicken - they simply don't reproduce well in confined areas. Fertility rates are low and mortality rates are high when cattle are penned up. They are built to roam, especially when it comes to reproducing. A lot of the flat space out west is devoted to raising corn, not to grazing cattle. Much of our land in Kentucky is hilly and broken up - ill suited for corn, but fine for raising young calves.

(2) Anti-monopoly rules still forbid the seed/feed conglomerates from owning the beef production process from start to finish. (unlike the poultry and pork process which they have pretty much cornered) The corporations are chipping away at the restrictions, but for the time being, they are not allowed to own this cow-calf part of the process.

(3) Finally, it's not very profitable to raise calves from birth to weaning age! This I have deduced on my own. As long as small farms are willing to raise enough calves at or below their cost, why should the corporate farms want to own this part of the process? From my observations, the economics of raising beef cattle in Kentucky are dismal at best. Five hundred pound calves bring roughly $500 at the market, and you will have roughly $500 invested in that animal if you ignore the opportunity cost of your land! Fellow farmers sometimes tell me that they make money at it, but I don't see any of these farmers buying or leasing more land to expand their operations. (beyond what their day job can finance!) Case closed.

So that's the status quo. Calves are born in Kentucky and fattened up in the Midwest. There's no profit in raising cattle in Kentucky if you follow the current model, but I like raising cattle and my land is suited for it so what am I to do? Change the model! Rather than sell calves to market, as we've done on this farm for almost 50 years, I've been selling several of our calves directly to consumers who recognize the benefits of buying directly from a small well managed farm.

The photo at left shows how the composition of my cow-calf operation has evolved in the past year. From left to right you can see (1) a yearling steer being finished on grass, (2) my Wagyu bull who will soon be the father of all the calves born here, (3) a short fat Red Angus cow responding to the bull's romantic overtures, and (4) the calf of the red Angus cow (her father was a registered Black Angus bull). What's different in this picture from the old model? Well, there's a yearling steer being raised for direct sale to consumers - that's different. Also, there's a scrawny Japanese bull getting ready to breed that British cow! Now that I'm selling beef, not calves, I have a vested interested in improving the genetics of my calves beyond the conventional metric of "weaning weight." It's the quality of beef that we can put on the plate that matters most now.


dp said...

Thomas, it's nice to see your new blog. I wish you success in your endeavors! And, I have no doubt that you'll be successful.

I you haven't, I suggest that you read some of Joel Salatin's works. I believe his book "Salad Bar Beef" would be a good place to start. Also, I have a friend near here who raises grass-finished beef and sells directly to the consumer. You can check him out and/or contact him at Spring Hills Farm.

I'll keep an eye on your new blog!

Carrie Oliver said...

I love your blog, it's clearly explains the difference between cow/calf, breeding, and beef. I'd love to taste your beef someday and see how it progresses as you continue to integrate Wagyu into the herd and test your hays and bluegrass.

james paul said...

Amazing how simple it can be to communicate with people and have them understand a certain topic, you made my day.