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Beef As A Byproduct Of Ranching

I love cows. I love the challenge of making genetic improvement and efficiently feeding our consumers.

I love cows. I love the challenge of making genetic improvement and efficiently feeding our consumers.

I understand the point others are making when they say they are grass farmers rather than beef producers, but it’s always offended me a bit because my focus will always be on the cow and on the consumer’s eating satisfaction.

With wholesale beef prices currently above $170/cwt., there’s certainly nothing wrong with the state of the beef business; still, there are some trends that indicate beef production is becoming a secondary consideration for a lot of producers. Let’s look at a couple of them.

For one, we may become energy producers. The offshore rig catastrophe in the Gulf of Mexico is sure to make it even harder to capture domestically this country’s energy requirements. We’ve already willingly removed areas like Alaska’s Arctic Wildlife Refuge and good portions of the American West from development. If we stop expansion of offshore drilling, we’ll grow reliant that much more quickly on renewable energy.

It’s unfortunate that from an economic-performance standpoint and quality-of-life viewpoint that renewable energy is less efficient and more expensive than fossil fuels. Nevertheless, the incentive to capture energy from biomass is growing, whether it’s ethanol, wind or a host of other options.

When it comes to formulation of today’s public policy, it no longer matters what makes the most economic or scientific sense, or what fares best in an objective risk analysis. Increasingly, it’s more a case of emotion and the perception of what is morally correct.

Thus, renewable energy is here to stay and will continue to grow in significance. Thus, as cattle producers, we’ll find ourselves increasingly feeding energy byproducts and producing energy as a major part of our business strategies. Outfits like Cattle-Fax soon may be looking at energy prices almost as closely as beef prices to help them determine trends in prices, expansion or liquidation.

In addition to energy production, our business is also moving heavier into the recreation/entertainment/open space and lifestyle arena. The price differential between land values and what ag can generate is increasing; as a result, capturing those values is becoming very important, perhaps primary.

Whether it’s hunting, fishing, open space, bird watching, lifestyle attributes or conservation, those activities are becoming major income sources. Then there is the potential of carbon sequestration and some of the other drivers we’ve seen other countries adopt.

Cattle ownership has always been a byproduct of land ownership, but its economic significance relative to that land value is being downgraded. That’s not to say that beef production isn’t a real and significant industry with real profit opportunities, but it does mean that it’s a business increasingly pursued because of passion rather than necessity.