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Out with the old, in with the new -- but will we ditch the market headache?

Fed cattle market update

Out with the old, in the with new: anyone involved in the cattle business likely celebrated New Year’s Eve with a little more anticipation and fervor than normal. The business is glad to see 2015 come to an end, with hopes that 2016 will bring, at the very least, a little more stability and predictability. 

To that end, 2015’s theme was volatility. And unfortunately, the swings from week to week were rarely favorable. The fed market started the year at $165-166 and managed to reach $167-1688 in early April. But from there, it was all downhill – grinding lower until the fed market bottomed at $118 in late September. Bottom line: in the span of just six months, fed trade retreated $50 per cwt – the equivalent of $650-700 per head (Figure 1). 

weekly fed steer price

During the past several months, though, the hardest thing to deal with has been the sharp moves – mostly down but some up, too. Accordingly, the year’s close at the CME was an appropriate sign-off with a definitive weather rally along with some short-covering. December live cattle went off the board at $135.80 – adding nearly $19 per cwt from the $117 low established just two weeks prior. Meanwhile, cash trade ended the year at $134. Interestingly enough, that was just about even with trade from two years ago.

In talking with producers in recent months, the question that often arises goes something like, “What happened in 2015 that’s made it so different from 2014?” There’s not an easy answer to that question. Nevertheless, 2015 is marked in the books and some review from a broad perspective is important to understand how it all unfolded. 

There were several indicators along the way.  That’s especially true looking back over the last twelve months. This column noted last January that:

The potential for substantial, and unexpected, moves requires constant vigilance and persistent monitoring.  And the “all-alert” is probably most prudent just when everything seems predictable or orderly. That reality is best witnessed by market action in the cattle markets during the past month [December, 2014]. 

Recall that November fed trade finished the month at $171 per cwt, established several new record highs during the month and managed to average nearly $170 per cwt. But just as quickly, the market’s sustained run of better prices came to end as December opened for business. Over the span of just three weeks, the market retreated nearly $13 to settle back at $158 just prior to Christmas. 

So, the market was sending some signals that all was not well. That was especially true looking at the action around the deferred contracts as 2014 closed for business. Here’s more commentary from a year ago:

Equally important, the deferred live cattle futures also gave up ground. The February and April contracts have both gone from trading $169-170 at the end of November to trading $159-160 during the Christmas holiday week. The slide possesses some especially important implications. Primarily, cattle feeders that haven’t hedged fall run purchases, on hopes of a spring rally, now have a deeper hole to dig out of. 

Finally, and most importantly, there was the building wall of cattle and concerns about uncurrentness. That was this column’s perspective in January, ’15:

[The hole that cattle feeders must dig out of] is compounded by the fact that cattle weights are running well ahead of last year plus the 120+ day feedyard inventory is sizeable. USDA’s December Cattle on Feed report placed the number at 3.302 million head - the second-largest level in the series history behind 2012…feedyards currently possess good leverage as packers chase cattle, the front-end supply will need to be monitored carefully going into 2015.

And that’s really where the wheels began to fall of the wagon. It was uncurrentness that fueled volatility and took the market to lows unforeseen by even the most astute of analysts. 

It’s been a long time since the feeding sector has had to grapple with a big front-end of cattle. And once cattle feeders get behind in marketings, and closeouts become perpetual losers, negative momentum begins to build and feeds itself in a downward spiral. It’s a buzz saw that chews up everything in its way. That’s precisely where we found ourselves in the throes of 2015.

All clear? Not yet

While the market seems to have settled down during the past month, the “all-clear” hasn’t been sounded. First, the front-end remains sizeable. December’s Cattle on Feed report pegged the inventory of 120 day-plus cattle at 3.610 million head; while down from the previous month, it’s the largest December mark in the series history (Figure 2) – and continuation of a similar trend in late 2014 leading into 2015. 

Second, that’s confounded by placement patterns. The heaviest weight category of placements (800-plus pounds) is the only delineation in which arrivals are running ahead of last year’s pace (up 470,000 head through November).

feedyard inventory

Cattle are staying out of the feedyard until they have to move; placements of cattle weighing 799 pounds or less are down over 1.5 million head through November. But that pattern sets the sector up for heavy cattle to continue being delivered through spring. The pipeline remains stacked for big weights and little wiggle room when it comes to marketings – heavy in, heavy out (Figure 3).  

feedyard placements

Third, there’s the ongoing backdrop of big meat supplies heading into 2016. That’s been an enduring theme during the past several months. USDA’s cold storage report indicates November beef inventories at 510.5 million pounds – 27%, or nearly 110 million pounds larger versus November 2014. Moreover, that mark is the second largest in series history, trailing only March 2013 by only 751,000 pounds (Figure 4). The meat side needs to keep product moving to ensure that pipeline doesn’t get clogged up ad prevent exacerbating the ability to market cattle out of the feedyard. 

cold storage

Where all does all that leave us for 2016? That’s the most difficult question to answer. Let’s hope we’ve weathered the worst of the storm. But suffice it to say, gains likely won’t come easily – and sure not like they did in 2014. There’ll be a several key factors that need to be monitored carefully heading into 2016 – including fundamentals discussed above coupled with FOMC monetary policy and strength of the world’s economy during the coming year.  

As such, lots of unknowns remain heading into 2016, thus volatility will likely remain with us for the foreseeable future. That’s what made 2015 so challenging; extreme volatility makes decision-making difficult to manage. It introduces not only the concern about protecting against down-side risk, but there’s also the worry about missing upside potential. As noted many times in 2015, “Trying to outguess or outsmart this market is nearly impossible to do and the consequences can be devastating. Given the continued pattern within the market, sharp moves are the primary challenge to be managed – both up and down.” 

Given that reality, there’s no precise, one-solution-fits-all scenario to fall back on when markets begin to swing hard and fast like they’ve done during the past several months. However, there are key some principles that can be followed to better prevent getting caught flat-footed. 

Although 2015 may feel like it should be a year to forget, there are important lessons to be gained. Markets can be merciless; as such, producers should be, now more than ever, investing time and effort to monitor markets carefully and objectively to ensure successful decision making. 

cattle prices

Nevil Speer is based in Bowling Green, Ky., and serves as vice president of U.S. operations for AgriClear, Inc. – a wholly-owned subsidiary of TMX Group Limited.  The views and opinions of the author expressed herein do not necessarily state or reflect those of the TMX Group Limited and Natural Gas Exchange Inc.

 

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Producer purchasing priorities

Producer purchasing priorities

The Center for Food and Agricultural Business at Purdue University conducts a nationwide survey of large commercial producers (LCP) every five years. The survey’s intent is to better understand the decision-making process among larger ag producers – especially as it pertains to purchasing inputs and services. 

The most recent survey was conducted in 2013 and targeted seven key commodities: corn and soybeans; wheat, barley and other small grains; cotton; fruit, nuts and vegetables; dairy; hogs; and cattle. Overall survey results are based on 1,679 respondents – including 186 cattle operations. 

One of the key aspects of survey results includes differentiation of buying preferences among producers. Three key attributes were evaluated within the survey results: price, performance and dealer-retailer relationship. Producers were asked to rank the importance of the three attributes, creating a total of six possible combinations.  

commercial producer priorities

Livestock producers ranked the importance of the attributes for animal health and feed products, respectively. The results are outlined in this week’s illustration. The overwhelming majority of producers ranked performance first. Meanwhile, the price – performance - relationship prioritization order accounted for nearly one-fourth of respondents. 

It’s also interesting to note that 68% of performance – price – relationship buyers for animal health products had the same preferences in their feed purchases. In other words, large commercial producers tend to be generally consistent about their priorities across their respective input needs. And the priority is this: they want the stuff to work.

Nevil Speer is based in Bowling Green, Ky., and serves as vice president of U.S. operations for AgriClear, Inc. – a wholly-owned subsidiary of TMX Group Limited.  The views and opinions of the author expressed herein do not necessarily state or reflect those of the TMX Group Limited and Natural Gas Exchange Inc.

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Factor in depreciation costs in business plans

With years of all-time high cattle prices in the recent past, it is logical to assume high profitability in the cow-calf sector, says Patrick Gunn, Iowa State University (ISU) Extension cow-calf specialist and Denise Schwab, ISU Extension beef program specialist.

But remember, profit per cow is "return per cow over cash costs.”

Because many operations have reinvested in infrastructure and herd expansion in the past couple of years, fixed costs and in particular depreciation should not be overlooked. These costs include depreciation on machinery, equipment, housing and fences for the cattle operation, as well as interest, insurance and depreciation on the cattle themselves.

ISU Ag Decision Maker estimates that total fixed costs in 2014 were likely upwards of $180 per cow. Standardized Performance Analysis (SPA) in Iowa suggests depreciation alone was upwards of $65 per cow.

To read more about calculating depreciation costs, click here.

 

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Culver’s continues to endorse ag, support FFA

Culver’s continues to endorse ag, support FFA

Driving to the Minnesota State Fair each summer, it’s hard to miss the bright blue barn standing in a field next to the interstate just south of the Twin Cities emblazoned with the Culver’s logo and the message, “Thank You Farmers!”

Opposite of restaurants like Chipotle, which bash conventional agriculture and modern-day beef production, this burger chain has a long-standing history of support for America’s farmers and ranchers.

Since 2013, Culver's has endorsed agriculture through its “Thank You Farmers” initiative, which has raised more than $1 million to support FFA and students in agriculture.

Photo Credit: Flickr user Arnold Gatilao www.flickr.com/photos/arndog

In 2015 alone, $360,000 was raised for local FFA chapters, the National FFA Foundation and other agricultural organizations across the country. The money was raised through donation canisters, percentage of sales donations, sponsorships, and a “Scoops of Thanks” day, where $1 scoops of custard were sold Aug. 8, 2015.

In a press release, David Stidham, Culver’s vice president of marketing, says, “We are excited to see the enthusiasm with which guests have welcomed Thank You Farmers. We’re deeply grounded in the farms that produce the dairy and grow the food that has made Culver's what it is today.”

"Culver's and FFA provide a great partnership that supports agriculture education in our local communities," added Todd Greenwood, director of corporate giving at the National FFA Foundation. "We appreciate that Culver's recognizes the hard work and dedication of farm families. Programs like ‘Thank you Farmers’ are helping to build awareness of the critical role agriculture plays. We are very thankful for Culver's support.”

I’m so appreciative of businesses like Culver’s that know and understand the role farmers and ranchers play in producing food for their customers. Without America’s beef and dairy producers, a butter burger and custard at Culver’s wouldn’t be possible! Let’s show our support with our dollars. When you go out to eat, choose places like Culver’s that support what we do.

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Penton Agriculture.

 

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2015 year-end cattle industry analysis

2015 year-end cattle industry analysis

Regardless of how you market your beef calf crop, at year’s end it is always useful to document the economic performance of your beef cow herd as if you sold your calves at weaning. This year-end analysis becomes the profit benchmark for evaluating postweaning marketing alternatives.

So, whether you sell at weaning or not, you need to price your calves at weaning time. That price becomes the entry price into your postweaning enterprise. Successful postwean enterprises need to be evaluated by the added profit generated after weaning. I do not find added profit after weaning to always be used in profitability discussions.

To determine whether or not a postweaning enterprise is a viable option, this process should begin as you near weaning with an economic projection of the profit potential of alternative marketing programs for your calves; these alternative marketing programs have to be evaluated on the added profit potential beyond selling at weaning, however. Without a weaning profit base, you cannot fully evaluate your postweaning marketing alternatives.

So how did 2015 treat us? Let’s look at the profit benchmark generated for my eastern Wyoming-western Nebraska study herd. This is a static 250 beef cow herd — it is neither growing nor shrinking in beef cow numbers — as the manager tries to maintain 250 cows year in and year out.

Figure 1 presents the 2015 basic production parameters for this study herd. In 2015, the 294 females exposed (250 cows and 44 replacement heifers) in the previous breeding season weaned 256 live calves, generating an 87% calf crop. The herd weaned 495 pounds of calf per the 294 females exposed.

2015 production parameters

During 2015, the herd manager culled 14% of the cow herd and experienced a 1% cow death loss. He needed 35 preg-check replacement females to enter back into the herd in fall 2015. With an 80% heifer conception rate, he had to develop 44 replacement heifers to preg-check in fall 2015 to get the needed 35 preg-checked replacements. No extra replacement heifers were developed to expand the herd.

Let’s go right to the calculated bottom line and look at the 2015 profit generated per cow. The calculated gross income for the 2015 year came to $1,234 per cow. Cost per cow came to $1,019, or $1.79 for each pound of calf weaned. (The cost per pound of calf gained gets difficult to calculate, due to the fact that not every cow produces a calf.) Profit per cow totaled $216 (Figure 2).

profit summary for beef cowherd

Profit here is defined as the “earned return to unpaid operator and family labor, operating capital and management.” This is the third-highest in the last 24 years. In order to simplify the comparison with postweaning marketing alternatives, this profit per cow is divided by the percent calf crop to get the profit per calf weaned, which is $248 per calf weaned ($216/0.87 = $248).

Wait a minute! Last month I reported calf prices were the second-highest on record, and now I am saying that beef cow profits in 2015 are the third-highest in the last 20 years? Why is this? The answer is that the cost of developing a preg-checked replacement heifer in 2015 was record-high. The economic cost of developing 44 preg-check heifers in 2015 came to $97,510, or $2,216 per preg-checked heifer.

These 44 heifer calves held over to be developed in 2015 could have been sold for $70,934 at weaning time in 2014. Add in the $26,576 required to develop these 44 heifer candidates through preg-check in 2015, and the total economic cost of these 44 replacement heifers comes to $97,510. Year 2015 may well go down as the year of the “highest-cost replacements.”

Add in the $13,500 purchase of three replacement bulls at $4,500 per head, and the gross replacement cost per cow comes to $444 per head. This is almost 44% of the total cost of running this beef cow herd in 2015.

This 2015 cost of replacement heifers is the highest replacement cost on record. Replacement costs are projected to drop substantially in 2016. Yes, there were nine open replacement heifers that were sold and their market value is included in the $1,234 gross income per cow (Figure 3).

gross income of cowherd

In order to round out the beef cow enterprise summary, I have included a cost of production summary for the 2015 study beef cow herd in Figure 4. The hundredweights of steer equivalents are calculated by dividing the gross income per cow ($1,234) by the price received for steer calves (5.56 = $1,234/$222). These are rounded numbers, as the computer calculated 5.55. The breakeven steer calf price needed to cover all production costs is $184 per cwt. This number is designed to take into account the non-calf income of the beef cow herd and assumes non-calf income stays constant.

cost of producing cowherd

To evaluate postweaning marketing alternatives, we have to come up with a set of planning prices. My suggested planning prices are presented in Figure 5. For example, 2015 weaned steer calves priced at $222 per cwt in October 2015 could be backgrounded to 800 pounds and marketed in January 2016 with a planning price of $163. By pricing these feeder calves into the lot at the weaned selling price of $222, I am able to calculate the projected added profit over selling at weaning.

planning price projections for cowherd

Three traditional marketing alternatives were projected as of mid-November 2015. After 2014, I have now increased the marketing weights of the postweaning enterprises evaluated. I am not at all sure that I should have done this; but the three marketing alternatives evaluated are:

• backgrounding calves at a fairly high rate of gain, to be sold at 875 pounds in February 2016

• finishing the backgrounded calves in a custom feedlot, to be marketed at 1,375 pounds in July 2016

• custom retained ownership until slaughter in a custom feedlot, marketing at 1,328 pounds in May 2016. The key here is hitting the more favorable May market.

The economic projections for these heavier postweaning marketing alternatives are presented in Figure 6. The only marketing alternative that has any appeal now is the retained ownership targeting the May 2016 market. A projected additional $42 profit per calf over and above that earned at weaning is inviting.

traditional postweaning marketing

This study herd has 212 calves to market. At $42 per head, that’s another potential $8,904 profit. My study herd manager now has to decide if it is worth the price risk to go for the added $8,900. What would you do? A $3 swing in selling prices would wipe out this projected profit. Stay tuned.

Harlan Hughes is a North Dakota State University professor emeritus. He lives in Kuna, Idaho. Reach him at 701-238-9607 or [email protected]

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Seedstock business is thriving

Seedstock business is thriving

BEEF magazine is proud to bring you the second annual BEEF Seedstock 100 listing, which notes the nation’s top seedstock producers based on the number of bulls sold. When we unveiled this list in January 2015, we knew we had developed a unique and useful resource for the beef business, one that was widely used as a yearlong reference.

Our second edition of the BEEF Seedstock 100 list continues the momentum of our inaugural effort. We trust you’ll find it equally helpful as you map out your genetics and breeding programs for the year. You'll now find an expanded resource on our website at beefmagazine.com, with additional articles, more data and an ever-growing list of seedstock producers ready to help you with your genetics needs.

In spite of the market gyrations we’ve endured this fall and winter, 2015 will still be a good year, at least for seedstock suppliers and cow-calf producers. According to the American Angus Association, the average price for registered Angus bulls five years ago was $3,776. That jumped to $4,997 last year, and hit an astounding $6,742 in 2015. Prices for registered females averaged $2,867 in 2011 and soared to $5,382 this year. All the while, the number of sales remained stable: 646 sales in 2011 and 653 in 2015.

Indeed, one of the big stories for 2015 is the increasing equity position of the seedstock sector, which has more than doubled its revenues in five years.

Unfortunately for cattle feeders, while they enjoyed perhaps their best year ever in 2014, it was followed by a disastrous year in 2015, one which may go down as the worst year ever for cattle-feeding profitability.

We’ll see the pain that cattle feeders have suffered this year eventually work its way into the calf and feeder cattle market, and that will eventually work its way into the bull market. But with the genetic tools now available to segregate and target your investment in bull power, and by far the best genetics on average that commercial producers have ever had to choose from, your genetics and breeding program is not a place to scrimp on dollars as you adjust to lower market prices in the next few years.

Indeed, 2015 will be remembered as a year of wildly volatile markets. It’s likely that the volatility we saw in 2015 won’t go away, but it’s also likely that the market volatility of the past few months will subside a little, making the 2016 planning process a little easier.

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4 lessons from non-ag businesses about employee engagement

employee management

Only 30% of the U.S. workforce is engaged in their work, meaning nearly 70% are not reaching their full potential due to varying levels of disengagement, according to a Gallup survey from 2010 to 2012 on employee engagement. How many dollars is this lack of engagement costing the business these individuals work for? On your farm or ranch, how much could disengaged employees cost your operation, or what impact could their disengagement have on other employees?

Employee engagement is a new buzzword in human resource management. Gallup, a national market research firm, has conducted three decades of research focusing on the American workplace. What has surfaced is the importance of employee engagement, which Gallup defines as employees who are involved in, enthusiastic about and committed to their work and workplace.

Unfortunately, the agricultural industry does not have specific numbers about employee engagement. However, we can glean take-home messages from non-agricultural business entities about employee engagement on our farms or ranches. Here are some critical points:

Select the right employee.

When an employer finds an employee who is the right fit, it’s a win-win situation. Employees are more likely to be engaged in work they are confident they fit. Creating job descriptions is a streamlined way for employers to articulate what is expected of employees.

Job descriptions should consist of: personality, experience, and education needed; regular functions (e.g., work with equipment, process cattle, ride horseback, etc.); physical, technical and intellectual skills needed (e.g., how much lifting the person will do); and specific skills or licenses required. Often in agriculture, we don’t think we need job descriptions, especially for family members. Yet, employees who understand the expectations of their role are more engaged, and realize their managers have created a job description to offer guidance and a measurement tool that can be used during employee evaluations. In case any legal situations arise, job descriptions become a valuable reference.

Invest in your employee. 

Showing you care for your employees can be demonstrated in many ways, and one is by providing them with the “tools” they need to succeed in their role. A Gallup study of 10 million people found employees’ who knew their employer “cared about them and their success” were significantly more likely to stay, be substantially more productive and produce more profitability for the organization.

An example in a ranch setting is offering training and orientation. Taking time to invest in new employees truly shows you care. Employees who feel more enthusiastic about their future are 69% more likely to be engaged in their job.

Often, however, agricultural people are humble and not always willing to admit that training and orientation time would be helpful. It’s important for employees to put humility aside and recognize that if employers are willing to invest in you, they want you to be successful. Training offers extra time to communicate with your managers or employers, where they can view your strengths firsthand. Gallup’s studies have proven that building employees’ strengths is a far more effective approach than trying to improve and focus on weaknesses. Employees who use their strengths in their jobs are six times more likely to be engaged.

Build a company culture.

A culture which focuses on employee well-being and security is a company where employees want to work. Employees who feel a level of comfort and have opportunities for growth, such as additional education and cross-training, as well as time for family and health and wellness, for example, have hope that their job is more than just a paycheck. The result — they are more engaged.

Happy employees are also more healthy employees. Recognition is another way to create a positive culture. But recognition should not be a drive-by thank-you, or a quick tap on the back saying “You did a good job,” as this type of recognition often comes off as insensitive. Recognition should be individualized, be conducted at an appropriate time and focus on what the employee did that made a difference.

Gallup says what I would speculate most employees would say if asked what they dream of in the workplace — “a great boss who cares about their development, and a company [e.g., farm or ranch] that focuses on and develops their strengths.”

Hearing from employers

Dick Helms, Arapahoe, Neb., has had employees assisting with his seedstock and farming operation for 30 years. Even though a son and a nephew, along with their wives, have returned to the farm, additional employees are essential because of the continued growth and overall size of the operation.

Helms has learned over the years that mediocre employees cost you more than good ones. “It’s amazing what a difference finding the right fit of an employee can do to your operation — they do the little things just that much better, and it really does help the ranch’s bottom line.” Helms explains that quality employees take the initiative to be careful around equipment, thus usually meaning fewer breakdowns and repairs — and when it’s the right fit you know, because they get along with the team and enjoy their job.

“There are young people wanting to work on ranches today, and some don’t have a ranch to go back to; those are the people you want to find and hire,” says Helms. He wants his employees to make employment at Flying H Genetics a career. As a result, he has continued to add incentives such as a new employee stock option program. “The employees really become part of the team this way, and they know their daily productivity enhances the productivity of the business overall, and will reflect in the value they receive back when they retire.”

With family members returning to the ranch and several outside employees all working at either his south-central Nebraska ranch or Missouri site, Helms says, “Everyone brings something to the table, a skill that is needed, so we are all a team — whether you are a family member or an employee, you are here because your skill is needed.”

Scott Schiff oversees 30 employees at Schiff Nebraska, a large commercial cow-calf operation in Minatare. Employee management is key to the success of Schiff’s business. “The most important role for me as an employer is to make sure my employees have the tools to execute and succeed in the jobs I am asking them to do,” says Schiff. “If I don’t provide them with the supplies, equipment, inputs, etc., I am stifling their ability to use their readily available talents,” he says.

When selecting employees, character is the No. 1 trait Schiff looks for. “I am seeking someone with the willingness and ability to work as part of a team.” With the size of the operation, employees may move from one ranch site to another regularly to help out another crew. Therefore, it is important the employee has the ability to be a team player, Schiff explains.

“My goal has been, and will continue to be, moving forward to build more stability in my team. I want them to have confidence in me and our company as an employer — because my goal is to build a culture where the company grows, and it unifies everyone involved.”

B. Lynn Gordon, Ph.D., is an assistant professor and Extension agricultural leadership specialist at South Dakota State University.

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Agriculture has to be one of the most unpredictable occupations in the country. Things happen. Markets fluctuate; diseases strike crops and livestock; drought destroys production; hail wipes out a year’s work in a matter of minutes. Accidents cause serious injury to farmers and ranchers.

And much of the uncertainty that’s endemic to agriculture is beyond human control.

No one expected, for instance, that a late December blizzard would dump nearly a foot of snow on the Texas High Plains and scatter cattle across the region. Some estimates put wandering cattle numbers in the thousands of head. Many perished in the harsh winter weather.

But not nearly as many died as would have had it not been for one thing that is as predictable among farm and ranch families as the certainty of tomorrow’s sunrise.

To read more and view the gallery, click here.

 

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Demand for ag grads on the rise & what that means for ranching families

Demand for ag grads on the rise & what that means for ranching families

The graduating class of 2015 is breaking new records, although probably not in the way the college students had hoped. According to an analysis of government data by Mark Kantrowitz, publisher at Edvisors (websites about planning and paying for college), the average student loan debt load for a 2015 college graduate is a whopping $35,000.

What’s worse, an increasing number of students are taking out loans to finance secondary education, with nearly 71% of bachelor’s degree recipients leaving with a student loan, compared to less than half 20 years ago and 64% a decade ago, according to this data published by the Wall Street Journal.

There have been many articles recently urging students to consider attending technical schools instead of colleges to receive practical education in jobs that need skilled labor. This is a great point, as the nation will always need builders, welders, electricians and other jobs that require a boots-on-the-ground mentality. For example, a certified welder can earn $75,000 per year.

Photo Credit: AgCareers.com www.agcareers.com/employer-guide-articles.cfm?id=90


Additionally, careers in the food and fiber industry could be thrown into the mix, and while technical schools can prepare students for a wide variety of jobs in agriculture, new information  shows that bachelor’s degrees in agriculture studies are in high demand.

“People will always eat, so jobs in producing, processing, transporting and selling food will never go away,” writes Jeffrey Dorfman for AgFax.com. “For good-paying, rewarding and secure employment, college students would be well-served to find a major in food and agriculture.”

Help wanted: 8 reasons to explore careers in agriculture

According to the USDA, the five-year forecast for college graduates in agriculture and food industries shows there will be will be 57,900 jobs available per year. However, the nation’s agricultural colleges will only graduate approximately 35,400 students annually.

These jobs are being filled by graduates who majored in fields outside of agriculture; however, Dorfman says employers much prefer graduates with more background in the field.

Production agriculture jobs only account for 15% of the available positions. Half of the jobs are found in ag business and management; 12% are in agricultural education, communication or government agencies; and 27% of these jobs are in the STEM fields (Science, Technology, Engineering and Math).

Students with agricultural backgrounds understand the industry, know the jargon and appreciate the business — all traits employers desire. Plus, the jobs pay well. On average annually, an agricultural operations manager will earn $60,600; agronomists, $45,500; IT managers in food and agricultural businesses, $78,500; and the average starting salary of agricultural jobs starts at $47,300 per year with a $5,000 bonus.

Dorfman adds, “As an added incentive, agriculture colleges are located in state land-grant universities. That means much lower tuition than at private colleges, particularly if you attend one of the state colleges in your own state and pay in-state tuition. Thus, students can earn their degree in an agricultural field and graduate with little to no student loan debt (certainly less than if they attend a private college which typically cost $20,000 to $40,000).”

My husband and I are both products of agricultural degrees from our state’s land grant university, and although production agriculture is our true passion, we are grateful for our agricultural careers that help cash flow our cattle operation and support our growing family. My youngest sister Kaley is currently a junior at my alma mater, South Dakota State University, where she is studying agricultural business, and she said the opportunities for internships and jobs in the field are abundant right now.

Perhaps you’re hoping one day your kids will come back to the family farm. As you pencil things out, you may find the operation comes up short to support another generation on the ranch. Consider encouraging your kids to explore careers in the food and fiber industry, which often offer positions that allow people to work remotely, and this could open new doors for your kids and grandkids to stay involved in production agriculture but also put some extra money in the bank for the lean times that often come with raising crops and cattle.

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Penton Agriculture.

 

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