Beef Buzz News
Lance Zimmerman with Cattlefax Offers Cow Calf Producers Strategies for Success
Fri, 20 May 2022 08:44:08 CDT
Ron Hays, Senior Farm and Ranch Broadcaster features comments from Lance Zimmerman, Director of Research and Protein Marketing Analysis for the CattleFax organization, talking about a cow-calf strategy for success.
Zimmerman was part of the podcast Cattle Chat recently talking about cow-calf operators and the need to balance your time between production and marketing decisions. In other words, being successful with production details will help you be successful overall, but Zimmerman says you can't neglect things that are going on outside of your control beyond the farm gate.
"Time and time again, your most profitable operators, whether it is a cow-calf producer, whether it is a wheat producer, whether it is a row crow farmer in Iowa, you are always better off, financially, in those benchmark databases if you are a producer that focuses most of your time and attention internally on what you can control," Zimmerman said.
While Zimmerman said cow-calf operators primarily need to be taking care of things they can control by watching those things at the farm gate and inside the ranch operation, at the same time, he said for those that are successful at navigating these marketing risks, those things outside of the farm gate have a chance to enhance their bottom line.
"Producers that have an ability to react and change their marketing, and change their management based on this big kind of macro-level industry discussions do a great job of maintaining operational flexibility," Zimmerman said. "They do a great job of being situationally aware of what the market is around them.
Zimmerman said this gives producers the opportunity to be able to react no matter what is thrown at them.
"I cringed every time I picked up a popular press magazine article and it talked about how you just need to retain ownership," Zimmerman said. "That is not a risk management strategy, in fact, it is quite the opposite. Any time you own an asset, and you invest more money in that, and you tie up more dollars and time in it, you are inherently adding risk."
While the risk of retaining ownership might be worthwhile, Zimmerman said it is something you have to assess as you look at that particular situation. He calls it an opportunity risk.
"At certain points in a cycle, long-run production expansion, contraction cycles that we go through in the ten-year cattle cycle in the industry, there are probably long-run periods and there are probably even short-run periods where you may be willing to take on more production risk by retaining ownership because the return to enhancing your marketing flexibility is greater than the risk you inherit," Zimmerman said. "I think we are in one of those times now."
We are still contracting as a beef cow industry, Zimmerman said, but he thinks the producers that are already thinking ahead, even in the middle of a historically strong drought since 2012, are already thinking about how their cowherd and pastures are looking to make expansion decisions based on the cow market.
Click the LISTEN BAR below to hear more from Lance Zimmerman on a cow-calf strategy for success.
Click here to jump to the K-State Beef Cattle Institute Cattle Chat podcast to hear the full conversation that included Lance Zimmerman.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
Ron Hays Beef Buzzes with Lance Zimmerman of Cattlefax
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