PR - EVALUATING THE FEASIBILITY OF BEGINNING A COW/CALF OPERATION

Abstract:

An aging farm population, increasing demand for beef and lessening drought conditions suggest opportunities for new beef producers. However, high cow prices and land values may create barriers to entry. This paper evaluates leasing and purchasing options for both land and cows. Investment and operating cost assumptions are explained along with loan alternatives for beginning operators. Whole farm financial statements are generated and resulting net cash flow, line of credit and total debt levels are projected for five years. Leasing cows and land is found to be a viable means of entry. Only with outside income can cows be purchased; significant levels of outside income are needed to purchase land.

Keywords: cow/calf, beginning, rancher, feasibility, cash flow.