A recent article entitled, “Young beef producers might learn from grain farmers’ pain,” written by Mike Wilson and featured on Beef Producer, listed five pitfalls that put young producers at risk.
These five characteristics from David Kohl, Virginia Tech economist, can create trouble for producers in a price downturn:
1. Some are heavily leveraged.
2. Some have low working capital.
3. They may have a home-run attitude as far as aggressive cash rents and marketing – always shooting for the top.
4. They have high family living costs, which may include a high-maintenance spouse.
5. In some cases, they have lenders who are not tuned in to help turn that ship around as grain prices slip to unprofitable levels in 2015.
Of these five, high family living costs struck me the most. As producers, we can do everything right — from developing and adjusting a budget for the operation, to narrowing down input costs, to improving management practices to be more profitable in our business. However, if we live beyond our means, no amount of budgeting, good management, and record-high cattle prices can compensate….READ MOREBack to News
Wyoming Outfitter #263