It’s almost back-to-school time, and what a great occasion to look at the education of our nation’s youth, particularly those hoping to work in the beef industry. With significant opportunities for the U.S. beef industry on the horizon, this is a great chance for young people to prepare themselves starting at an early age.
Our nation’s ranchers are getting older. In fact, 12 years ago UDSA reported that 66% of cow/calf operators were over 50 years old. This has resulted in a massive generational transfer of agricultural operations across the U.S. In the West, it has been estimated that over 50% of all ranches will change ownership in the next 10 years – either through inheritance or selling to a new buyer. Unfortunately, we are still losing about 1% of beef cattle operations each year. As a result, over 200,000 beef operations have been lost since 1988.
It is time we focus our efforts on educating youth and providing them with the skills needed to join the rapidly-changing U.S. beef industry. With some luck, it’s possible that many of them might be able to become cattle producers themselves.
A Time of Opportunity
Even with new challenges and elevated costs, today might be a great time for young people to get into the beef industry. To many, that may sound like a crazy idea. But, consider a few facts about today’s industry:
1. The U.S. beef cowherd inventory is declining, which will result in relatively small calf crop (possibly the smallest in 35 years). Fewer calves typically results in higher calf prices, as long as demand remains stable.
2. Global beef demand continues to increase substantially since it is closely following the Gross Domestic Product (GDP) growth of countries like China and India.
3. Compared to competing animal protein sources (poultry and hogs), the ruminant is the only animal able to take advantage of readily-available low-cost feeds like straw, corn stalks, and rangeland grazing.
4. Marketplace premiums for adding value to calves are now a reality, including Age and Source Verification (ASV), preconditioning programs, and natural and organic claims. However, most producers aren’t taking advantage of these methods to increase income.
5. Several low-cost technologies are available to improve production efficiency and product quality, but are rarely used. These include sexed semen, electronic identification, computer software for individual animal management, and genetic tests to improve selection.
Being an optimist and taking into account these points, right now is a great opportunity for young people to get involved in the beef industry. However, new entrants must work within a completely different set of paradigms in order to succeed, including high-priced grains and forages, elevated diesel and equipment (e.g. pickup and tractor) costs, and an inability to purchase grazing lands with cow/calf income alone.
Characteristics and Skills Needed
The new set of skills that is required by young people must be acquired from several different sources. It is no longer possible for “real-world” experiences alone, or only a university education, to provide adequate training. And, future beef industry leaders need to be savvy in both animal husbandry and business.
So, what are the key “skills” and “characteristics” that young people need to have?
Know the Globe: Today’s beef industry is a global business. It has become increasingly important to understand societies, markets, trade, world supply and demand, and the interrelation of major markets (e.g. oil, grain, and meat). Over 95% of the world’s population is not in the U.S., while only about 14% of the world’s beef cows are in the U.S.
Be a Communicator: Without question, communication skills are the most important set of skills any young person can compile and use to ensure a lifetime of success. These include interpersonal and public speaking, writing, listening, negotiating, moderating, and mediating skills. Working in the industry requires daily communication with everyone from ranchers and suppliers to retailers and consumers.
Learn a Language: Learning a foreign language as a young student is much easier than as an adult. We’re in a globaleconomy – there are over 250 different languages that are spoken by at least 1 million people, and 65 of those languages are spoken by at least 10 million people each. As exports play a larger role in the U.S. beef industry, we will need greater representation in foreign markets to be competitive.
Have Sales and Networking Skills: As unappealing as “sales” jobs appear to be for most people, it’s amazing that nearly every occupation (with the possible exception of manual labor jobs) requires skills in “selling”. These skills can be developed by young people if they build a network and a set of contacts. Join, be active in, and work with an industry association, organization, or group. In addition to learning how to “sell” yourself, these opportunities enhance information sharing, teamwork, and collaboration.
Acquire Database Skills: Cattlemen are becoming swamped with information. Though data can be simple to collect, the analysis and evaluation of data is more difficult and rarely done. General computer proficiency should complement skills in compiling, summarizing, and interpreting data using spreadsheets and database programs. Unfortunately, limited value is being extracted from data collected today compared to what is ultimately possible.
Study EVERY Segment: As the beef industry moves toward integration, albeit slowly, it is becoming increasingly important to intimately understand every segment of the beef industry including the seedstock, cow/calf, yearling, feedyard, packing, retail, and food service sectors.
Know Commodity Markets: With today’s extremely volatile prices for all commodities, it will continue to be vital to understand commodity markets. This includes the buying and selling of commodities, risk management, and management of cash flow and debt loads.
Understand Planning and Supervision: For a variety of reasons, there has been strong interest recently by non-beef industry participants to develop and implement business and marketing plans for potential beef operations. Industry newcomers are seeking young individuals with an ability to plan and execute while supervising others. Don’t just work in manual labor jobs and learn only animal husbandry skills. Become competent in interpersonal interaction and oversight. Supervisory skills can’t be taught – they must be developed through experience.
Becoming a Beef Producer – Is it Still a Possibility?
While some people in the beef industry are “lucky” enough to inherit a cow/calf operation (including all those estate taxes too!), not all of them are able to survive the associated challenges with generational and management transfer. In contrast, few people are able to come up with enough money on their own to enter the business without a need for off-ranch income. Generally, the assets required to become a cow/calf producer (primarily cows and land), are too substantial to take on compared to annual return and risk level.
Some young people have become successful cow/calf producers by taking a wholly different approach to acquiring cows and/or land. With a few exceptions, it seems that land ownership is not feasible. Instead, leasing grazing land may be an option, particularly if absentee ranch owners in an area are not interested in owning cattle.
Buying young non-pregnant or very late-bred cows in the fall (that were previously intended for harvest) has been a successful strategy for some people to begin a cowherd at a reduced cost. But, it is vital that a strict bio-security program be followed to avoid introduction of contagious reproductive diseases from open cows. If a cow is open due to inadequate nutrition or management, but not disease, it’s possible she can be bred back if managed well with good nutrition.
Running cows on “shares” has allowed some to get into the cow/calf business, but requires that cows be owned by someone else. This can help limit risk, but also may make long-term plans difficult to develop. Similarly, entering into a contract to provide calves to a feedyard or integrated beef company may help limit risk and ensure predictable cash flow.
In reality, the easiest way for a young person to get into the beef business may involve starting a yearling or grass-based calf growing operation. Over the past 20 years, yearling operations that have purchased and grazed light weight calves on grass have been the most consistently profitable beef industry segment. This is an appealing option due to a relatively low cost-of-gain, the fact that it’s a margin business, and the relative ease of entering or exiting the business based on level of profitability.
A unique new program is being offered by the Nebraska College of Technical Agriculture (NCTA-Curtis) to return college-educated young people to ranches and rural communities with 100 cows in tow (http://www.ncta.unl.edu). This new program, the NCTA 100 Beef Cow Ownership Advantage, brings together students, parents, employers, and agencies to create successful business plans and ranch transfer programs. The USDA Farm Service Agency provides NCTA graduates with low interest loans to purchase cows, and it appears that the program connects students with current agricultural producers who are interested in a partnership. At the end of the program, the new graduate becomes a partner in an existing business and brings along 100 cows of their own allowing them to take an ownership position in the partnership.
The Bottom Line
Today’s beef industry is offering a tremendous opportunity for young people. However, compared to traditional beef production, a vastly different set of skills, ideas, innovations, and knowledge is needed. Progressive youth should embrace this opportunity and self-direct their education, including building a set of skills that includes skills in communication, sales, networking, planning, and supervision. In addition, an in-depth knowledge of the global economy, all commodity markets, and every beef industry segment will be required. Proficiency in a foreign language and database management will also be necessary to ensure success.
The strength of our nation and its democracy depends on a strong, viable, and progressive agricultural economy. And, the beef industry is the largest single segment of U.S. agriculture. With a major generational transfer of farms and ranches currently underway, our youth are being given a major responsibility. However, they must enter this industry embracing a new set of skills acquired under a new set of paradigms. Today is truly an exciting time for young people to be entering the U.S. beef industry!
Dr. Jason K. Ahola is an Extension beef specialist with the University of Idaho. Contact him at [email protected] or 208-454-7654.