We’ve had several “a-ha” moments while raising our Brahman cattle, and a lot of them have involved discovering some key costs and figures that affected our bottom line. When Brandon and I took over financial management of the previous operation we were part of, we were starting from zero in terms of knowing what it costs to operate. We had no figures as far as what it costs to run a show barn, run a bull test, run pasture cows, etc.
So about ten years ago we began really focusing on our cost of inputs in our cattle operation. And, when we started BRC from scratch this fall, we have also been very focused on input costs and start up costs.
So what does it cost to start up a Brahman ranch?
This one is one that was shocking to us as we began our new journey. Luckily for us, we had a foundation herd of cattle, so we were not purchasing any cattle. If you are starting from scratch literally – meaning you are buying land, buying cattle, and setting up an infrastructure – this is going to be a costly investment. There is no way around it. Talk with your tax advisor and accountant. Also, what I just keep telling myself is that we are making a lifetime investment, and that while we have a lot of startup costs over this first year, these things will be used for years to come so that is something we are keeping in mind. My great grandpa, Lanier Forgason, used to be in charge of upkeep and facilities at J.D. Hudgins. So taking pride in your facilities and setup is bred in my family. We are trying to do things in a way we can afford, but also in a nice way for things that will last.
If you are starting with buying your foundation Brahman breeding stock, you can go a few different routes. We have done all of these actually and different scenarios work good for different objectives.
-You can purchase older cows that are already in production.
During our marriage, Brandon and I have done this three significant times to add to our herd. We first purchased a group of older cows from JDH Locke Division in about the first year of our marriage. Later we purchased a larger group of cows (about 80 head) from D Bar Ranch, and finally in 2016 we purchased another large group (about 200 head) of Brahman cows from Southern Cattle. The costs of these investments ranged from $60,000 to $500,000 depending on the number of head involved. In all of these cases, we took out a loan to make the purchase. Our goal with these purchases was to be able to pay back the loan in three years. And we achieved this with all of these ventures.
-You can purchase young heifers.
This is another option, and the one we are most familiar with since this is what we typically sell here at BRC and what we typically walk people through the thought process of purchasing. We sell heifers anywhere from $5000 and up. We have some customers who buy larger groups of heifers, and then some who buy one heifer. It’s all up to what you need. We ourselves tend to buy heifers occasionally too, especially if we see a fellow breeder having a sale or something we’d like to add to our herd. The disadvantage of this method is that you will have about a year or so until these heifers are old enough to have their own calves, but due to the demand of Brahman cattle, most people sell their heifers young. So, buying younger heifers gives you an opportunity to get the best genetics, even though you may have to develop them a little up front.
-You can purchase embryos or flushes.
This option is the one we are the least familiar with, because we don’t typically sell embryos or flushes except for special occasions and we don’t really buy embryos or flushes either. When you are working with Brahman frozen embryos you can expect about a 30% conception rate. So, there is a risk here. But, if you choose this route, you can really focus on the top genetics you like and this is an option that some people really like.
This one is a major pain point if you are starting out. If you have any of this already or are able to inherit things, you are VERY LUCKY! Be thankful for any of this that has already been done for you, because this stuff adds up and is expensive!!! Even if you inherit a half-working tractor, be thankful for it. This is where you can start feeling like your cattle operation might be a money pit.
For us, we started BRC from scratch – with nothing. We didn’t inherit anything, we didn’t get anything from anyone else, nothing was there for us already. So everything we have, we have had to purchase ourselves. So, this information we share, is just our experience trying to be helpful to others who might be in the same boat as us. Side note: check out our recommended vendors if you live in our area and are looking for people to help build your facilities and provide equipment.
A few years ago, we purchased 300 acres of land (which is now our headquarters) and it was basically a blank slate of land. No cross fencing, no pens, no water wells, etc. To set this property up the way we wanted, we spent about $350,000. This included creating roads, cross fencing, cattle guards, land clearing, building a set of working pens, building a set of sale pens, building a show barn, and more. There are probably cheaper ways to do what we did, and there are definitely more expensive ways. Our biggest costs were fencing, land clearing, building the show barn, then building the working pens. We have done this over a slow period, little by little. Another big investment is going to be equipment. So, we had to purchase a truck, trailer, and tractor to get going. These are also big investments. We started with a used truck, then bought a basic stock trailer, and did our tractor through John Deere with the option of the 0% financing over a five year period. Even now, we still think of things we need, and have a running list over time that we are hoping to be able to add – like a manure spreader or a Gator/Ranger. We have also looked on used sites, including even Facebook marketplace, and keep an eye on things that might be available to buy used.
ONCE YOU ARE SETUP WITH YOUR FACILITIES AND EQUIPMENT
Daily Feed and Operating Costs
For us, our biggest expense is feed costs. We are always looking for ways to reduce feed costs, but in our calculations this is what our feed costs are running per day.
Show Barn: $9.83/day per head for feed only
Developing Center: $3.83 per day per head for feed costs only
Pasture Cows: $0.84 per head per day
Again this is just our feed costs, does not include labor or equipment or anything like that, simply the feed. These costs we list here are our average costs. During some months this is higher, some months this is lower. Some of you may track this and if you have suggestions on how to reduce these costs, we are always looking for other ideas.
Constantly Evaluating and Measuring
We aren’t financial experts by any means. Actually, if this is something that intrigues you like it does us, there are a lot of good workshops and seminars you can attend. We haven’t attended this one in particular but our cousin John Locke participates in the Ranching for Profit workshops and highly recommends them. I also like to keep an eye out for workshops from King Ranch Institute for Ranch Management and Texas A&M Extension Beef Cattle Short Course.
And, if you read this and have any tips you could share with US, we would love to hear from you. Maybe you have some tips on reducing your expenses or input costs. We are always open to learning and would love to hear your suggestions.
Also, don’t forget our Brahman Academy course, where we talk about things like this in more detail. You can subscribe for $149 on at www.brahmanacademy.com.