When a rancher buys grassland, he’ll buy some cows to eat that grass.
Most likely he’ll go to the bank to take out a loan to buy those cows.
When he gets his loan, the rancher drives to the sale barn to purchase the cattle, or maybe he buys premium, high-quality cattle from an established rancher.
Next, he’ll need to haul the cattle home to his ranch, so he’ll buy a truck and stock trailer with borrowed money.
Before he hauls the cattle home, the fence must be built and/or repaired around the pasture to keep the cows in. So, he’ll need fencing supplies.
Then he wonders where the cows will get water to drink. The rancher hires a well drilling company to dig a well, so the cows will have fresh water.
Once the cows are home and they begin to the eat lush, green grass in the field, the rancher decides he needs a good strong bull or two to go with the cows so there will be calves to sell.
So, he drives one hundred miles to another ranch to buy two of this rancher’s bulls. The rancher chose these bulls because he saw a picture of the bulls and thought they would be perfect to go with his cows.
Then the rancher thinks about how he’s going to feed his cattle during the winter when the grass is not growing.
So, he’ll go to the bank to borrow money to buy a tractor, a bale spike, a hay mower, and a hay baler.
With the tractor and hay mower, the rancher will cut the hay and let it dry in the warm sunshine.
Then he’ll bale the hay into big round bales with the tractor and hay baler.
To haul the hay, he’ll buy a flat-bed trailer to be used with his truck.
Then the rancher thinks about where to put the hay. So, he’ll build a barn, which takes another loan, to store the hay and protect it from the rain, snow, and wind.
In the winter, he’ll feed the hay to the cattle using the bale spike attached to his big red tractor.
Then the rancher thinks about how he’s going treat any sick cattle and separate the calves from the rest of the herd to take to the market to sell.
So, he’ll build a working pen and loading chute, again another loan.
After selling his calves at the sale barn, the rancher thinks about his loan.
So, he goes back to the bank to make his farm loan payments.
If he has any money left, he just may buy more cows.
Remember to thank farmers and ranchers. They work hard and risk a great deal to send food from the farm to your table.
For our ranching peers, what do you do to cut cost? Do you farm without the bank?
One route we chose was to decide to purchase our hay instead of investing in the equipment and time it takes to bale hay. We also stockpile grass by rotating cattle among pastures to stretch grass for as long as we can—reducing the amount of hay needed. Another route we chose was to invest in smaller grass-based South Poll cattle genetics. This cuts the need to supplement our cattle with grain—thereby solely depending on forages and minerals to feed cattle. Another area to consider is to contract out other equipment needs and services. Then as you grow your business, capital improvements can be purchased over time without going into deep debt from the beginning.