Farming is hard work and requires extensive planning. Individuals establishing a new cattle enterprise must focus on creating effective business strategies and gaining financial expertise. Thriving in the cattle industry takes some doing. However, the cattle business can be extremely profit-yielding if farmers know how to build a strong network. Here are the top 5 mistakes new cattle farmers should avoid. We have also compiled a list of a few tips to help you make your business more profitable.
1. Not Doing Solid Market Research
Once you have researched the scope of work in your area, it’s time to make a proper business plan that includes the business’s marketing and operational costs, risk management tools and financial aspects. You should know your USPs and what makes you stand out from your competitors. Our advice is to do a SWOT analysis to identify your strengths, weaknesses, opportunities and threats.
2. Poor Financial Planning
You need to learn to prioritize things and ensure a balance between what you need right away and what can be purchased later. Initially, spending cash on the wrong things can surge the business’s running costs and lower the profit margins. Be careful when buying depreciable items, especially equipment. Before making a purchase, ask yourself several questions. For example-
- Do I need to buy this?
- Will this yield a good return?
- Is there a less expensive but equally effective option available?
Your new cattle business may suffer if you fail to recognize your purchases’ potential economic impact.
3. Prioritizing Output Over Profit
Average daily growth rate (ADG) is commonly used by farmers as a parameter to measure success. However, the whole idea of ADG is flawed. The cattle’s output should not be a parameter to gauge success. Instead, it should be calculated in terms of the money you make. Ensure that your financial actions are sustainable in the long run. Making profits allows you to increase your working capital and liquidity gradually.
4. Not Understanding The Demand Of The Market
It is important to understand market needs and raise cattle that are in demand. For example, you might be breeding cows with excellent growth and production characteristics, but they may not be as highly desirable as other breeds in the current market. Avoid dealing with what you want. Instead, focus on what the buyers want. Additionally, it is important to be adaptable and not stick to one type of cattle. It is best if you can talk to other producers about the problems they face and their solutions.
5. Poor Record Keeping
Failing to record and organize will always cause problems in the long wrong and will impact your overall production. Keeping structured records for your cattle will help you stay organized and help you to better understand your operation’s profits and losses.
Digital technology has revolutionized record-keeping. Programs such as CattleMax software help keep your ranch organized, ensure smooth operation and help you make informed decisions. Making your overall herd management more streamlined and creating a far more productive workspace.
Tips To Make Your New Cattle Business More Profitable
1. Planning Controlled Breeding is crucial
We suggest that breeders plan a regulated mating season of 90 days. This is a sure way to ensure that the calves produced are of the same age, resulting in less fluctuation in weight. If mating is not managed, the age and weight of calves may vary significantly, and their management can be challenging. Managing time and responsibilities efficiently helps boost profits
2. Organize Data
How can you manage any operation efficiently if you don’t know how to measure it? It’s essential to keep records and assess them regularly to design better breeding plans. Additionally, your management decisions will be more solid if you have more data on farm records. It will further ensure that you can monitor activities and make sound financial planning decisions.
3. Keep Food Costs In Check
It’s essential to keep regular track of the nutritional condition of cattle. One excellent method is manual scoring using visual indicators as parameters. This 5-point scale scoring method allows ranchers to identify nutritional deficiencies in cows before they result in a lower body condition score.
4. Find A Reliable Banker
Farmers sometimes find themselves unable to repay their loans on time and may need a reliable banker to help them urgently arrange funds. Find a trusted banker who is knowledgeable about agriculture and can adapt to your particular situation.
5. Say No To Luxuries
As a new cattle business farmer, you must stop spending on unnecessary luxuries. Give up luxuries like expensive hobbies, new cars and trucks, and costly equipment. Remember, you might have an eye on a new truck, but it’s best not to invest in it. This will help you to not overburden yourself under debt and liabilities.
6. Maintain Friendly Relationships
- Start cultivating supportive relationships with people in the field, including your neighbours, co-workers, and superiors.
- Work on multiple farms to gain experience in learning different methodologies.
- You can also collaborate with local ranchers and experienced people who may sell you feed or exchange your labour for livestock.
7. Strategic Marketing
Any business developed with the right strategic marketing strategies has the potential to get successful. Consider making changes to your current marketing strategy or designing one from scratch, expanding your network, and coming up with new approaches to create a positive brand image and convey your brand’s message.
Apart from these mistakes, it is also essential to communicate the idea of your brand to the audience. When you offer your products to consumers, they want to know more about you. They are interested in your background, the reasons and methods you use to raise or produce your animals, and your values. Create an appealing brand story. Happy Farming!