It can be truly challenging starting any business, but one business that you can start with little challenges and a wide market coverage is a cow and calf operation business. Cow–calf operations are common all across beef-producing countries, and the goal of such business is to produce young beef cattle, which are usually sold.
If you are considering starting a cow and calf operation, the good news is that you can’t get it wrong because beef is consumed by almost everybody and all over the globe. It is important to state that starting a cow and calf operation comes with its own fair share of challenges, but that does not rule out the fact that it is indeed a profitable business venture.
An aspiring entrepreneur can either choose to start the business on a small scale or on a large scale depending on their financial status. So, if you have decided to start your own cow and calf operation, then you should ensure that you carry out thorough feasibility studies, market survey, and secure the needed public health and hygiene certificates and permits.
Business plan is yet another very important business document that you should not take for granted when launching your business. Below is a sample cow and calf operation business plan template that can help you to write your own with little or no difficulty.
RELATED Pig Farming Business Plan [Sample Template]A cow and calf operation is a method of raising beef cattle in which a permanent herd of cows is kept by a farmer or rancher to produce calves for later sale. Cow and calf operations are one of the key aspects of the beef industry in the united states.
In the British Isles, a cow and calf operation may be known as a single-suckler herd. The goal is to produce young beef cattle, which are usually sold. A rancher who works within such a model is often called a “cow and calf operator” in the United States.
Cow and calf operations are divided into two types. First are those that produce feeder cattle to be raised by other agricultural enterprises, such as feedlots. These sell their calves after they have been weaned and are under a year in age. The second are those that raise the calves for 1–2 years before selling them directly to a slaughter house.
Cow and calf operation business is a subset of the beef cattle farming industry and businesses in this industry includes farms and ranches that raise cattle (including cattle for dairy herd replacements) or feeding cattle to fatten and prepare them for consumption. The industry also includes cattle feedlot operations, which produce high-quality beef.
There is no single cow and calf operations company that has dominate market share in the industry hence smaller cow and calf operations can successfully make profits.
Statistics has it that in the United States of America alone, there are about 746,333 registered and licensed beef cattle farming businesses responsible for employing about 794,221 people and the industry rakes in a whopping sum of $69 billion annually.
The industry is projected to enjoy -4.9 percent annual growth between 2014 and 2019. It is important to state that beef cattle farming in the US industry has no companies with major market shares. A 1997 census found that this sector of the U.S. beef market produced over $40.5 billion.
As of 2007 there were more than 765,000 cow–calf operators in the country, mostly concentrated in the Western and Southeastern U.S. states.
A recent report published by IBISWorld shows that over the five years to 2019, revenue for the Beef Cattle Production industry is expected to decline at an annualized rate of 4.9 percent to a total of $69.2 billion, largely due to declining red meat prices. During the period, fluctuating feed prices have caused extreme volatility in the price of red meat.
Prices have declined overall at an annualized rate of 6.2 percent, dragging on industry revenue. A collapse in red meat prices in 2015 and 2016 greatly diminished returns per head, resulting in lower profitability despite a concurrently falling price of animal feed.
The price of red meat is anticipated to rise 1.3 percent in 2019 alone, resulting in an expected 1.7 percent increase in industry revenue in 2019.
One thing is certain about cow and calf operation businesses, if you are able to conduct your market research and feasibility studies, you are not going to struggle to sell your products because loads of people out there eat beef, drink milk and there are industries that make use of byproducts from cattle in manufacturing their products.
There are few barriers to entry into the beef cattle production industry. Usually, all inputs are readily available. In the nearest future, players in this industry may face the highest costs associated with accessing technology, especially in relation to genetic modification engineering in livestock breeding.
So also, intellectual property rights protecting new inventions and technology may mean that new entrepreneurs coming into the industry will need to pay license fees, and this of course will cause increase an in the startup fee of cow and calf operations.
George Newton® Cow and Calf Operations, LLC is a licensed cow and calf operation that will be based in the outskirt of Dallas, Texas – United States. We have done our detailed market research and feasibility studies and we were able to secure twenty acres of land to build our cattle ranch and start our business.
Our cow and calf operation is a going to be standard one hence will be involved in commercial breeding of cows, oxen, bulls, bullocks, steers, heifers and calf et al. We will also be involved in boarding services, breeding services, dairy support services, livestock health services, farrier services, and shearing services as well.
In the nearest future, hopefully within the first five years of officially running George Newton® Cow and Calf Operations, we will start our beef jerking and milk processing plant and also start exporting our products to other parts of the world.
This is why aside from the fact that we’ve secured the required land for our business, we have also hired some key employees who are currently undergoing training so as to fit into the ideal picture of the 21 st century cow and calf operation workforce that we want to build.
We are in the cow and calf operation business because we want to leverage on the vast opportunities available in the cattle farming industry, to contribute our quota in growing the U.S. economy, in national food (meat) production, raw materials production for industries, to export agriculture produce from the United States to other countries and above all, to make profit.
George Newton® Cow and Calf Operations, LLC is well positioned to become one of the leading cow and calf operation in the United States of America, which is why we have been able to source for the best hands to run the business. We have put process and strategies in place that will help us employ best practices as required by the regulating bodies in the United States of America.
George Newton® Cow and Calf Operations, LLC is a private registered cow and calf operation that is owned by George Newton and his immediate family members. The company will be fully financed by the owner at least for a period of time.
Before starting George Newton® Cow and Calf Operations, George Newton has worked with some of the leading livestock farms in the United States of America. He has worked in the industry for over 20 years before resigning to start his own cow and calf operation.
George Newton® Cow and Calf Operations, LLC is a licensed cow and calf operation that is committed to producing cow and calf for both the United States’ market and the global market. We are in this business to make profits and we will ensure that we do all that is permitted by the law in south africa to achieve our business aim and objectives.
These are the areas we will concentrate on in our cow and calf operation. If need arises, we will add more related services to our list;
Our Business Structure
George Newton® Cow and Calf Operations intends starting small in Dallas – Texas, but hopes to grow big in order to compete favorably with leading businesses in the industry in the United States. We are aware of the importance of building a solid business structure that can support the kind of world class business we want to own.
This is why we are committed to only hire the best hands in and around Dallas. We will ensure that we hire people that are qualified, hardworking, dedicated, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders.
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the management of the farm. In view of the above, we have decided to hire qualified hands to occupy the following positions;
Chief Operating Officer:
General Farm Manager
Administrator/Accountant
Cow and Calf Operations Manager/Supervisor
Sales and Marketing Officer
Field Workers/Contract Staff
Client Service Executive/Front Desk Officer
George Newton® Cow and Calf Operations, LLC does not intend to launch out with trial and error hence the need to conduct a proper SWOT analysis. We know that if we get it right from the onset, we would have succeeded in creating the foundation that will help us build a standard cow and calf operation that will favorably compete with leading operations in the United States of America.
Here is a summary from the result of the SWOT analysis that was conducted on behalf of George Newton® Cow and Calf Operations, LLC;
Our strength as a cow and calf operation is the fact that we have healthy relationships with both cattle suppliers and buyers within and outside of the United States. We have some of the latest cattle rearing machines, tools and equipment that will help us breed our cattle in commercial quantities with less stress.
Aside from our relationship (network) and equipment, we can confidently boast that we have some the most experienced hands in the industry in our payroll.
Our weakness could be that we are a new cow and calf operation in the United States and we may not have the required cash to pump into the publicity of our business. We are aware of this and from our projection will overcome this weakness with time and turn it to a major advantage for the business.
Red meat prices dictate returns for American cattle ranches and feedlots. Increased prices generate an increase in returns per head for farmers. Consequently, higher returns generally encourage farmers to devote more resources to cattle production. The price of red meat is expected to rise in 2019, presenting the industry with a potential opportunity.
Per capita beef consumption represents the total carcass weight of beef available for consumption per person in the United States. Industry sales are bolstered when more customers consume more beef. Per capita beef consumption is expected to fall in 2019, posing a potential threat to the industry.
Despite the fact that commercial cattle rearing has been in existence since time immemorial, that does not in any way make the industry to be over saturated; commercial cattle farmers/cow and calf operations are exploring new technology to continue to improve the cattle rearing process. The fact that there is always a ready market for cattle makes the business ever green.
One of the new trends in the industry is that with the recent advancement in technology, livestock farmers can now improve the various breeds of the animals they are breeding. As a matter of fact, it is now easier for cow and calf operations to comfortably import the kind of cattle breeds they want, and also advancement in technology has made it easier to cross-breed different cows.
Those who are the end consumer of cow and calf operations, and those who benefit from the business value chain of the beef cattle farming industry is all encompassing; it is far – reaching. Almost every household consumes produce from livestock farms.
So also, a large chunk of manufacturing companies depend on cow and calf operations for some of their raw materials. In essence a cow and calf operation owner should be able to sell his or her farm produce to as many people as possible.
We will ensure that we position our business to attract consumers of beef not just in the United States of America alone but also other parts of the world which is why we will be exporting some of our cow and calf to other countries of the world.
It is easier to find entrepreneur flocking towards an industry that is known to generate consistent income which is why there are more cattle ranches in the United States of America and of course in most parts of the world.
For example, a 1997 census found that this sector of the U.S. beef market produced over $40.5 billion. As of 2007 there were more than 765,000 cow–calf operators in the country, mostly concentrated in the Western and Southeastern U.S. states. These goes to show that there are appreciable numbers of cow and calf operators in the United States of America but that does not mean that there is stiffer competition in the industry.
As a matter of fact, entrepreneurs are encouraged by the government to embrace commercial farming/livestock farming because part of the success of any nation is her ability to cultivate her own food and also export foods to other nations of the world.
George Newton® Cow and Calf Operations, LLC is fully aware that there are competitions when it comes to selling livestock all over the globe, which is why we decided to carry out thorough research so as to know how to take advantage of the available market in the United States.
We have done our homework and we have been able to highlight some factors that will give us competitive advantage in the marketplace; some of the factors are effective and reliable cow and calf operation processes that can help us sell our produce at competitive prices, good network and excellent relationship management.
Lastly, our employees will be well taken care of, and their welfare package will be amongst the best in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and objectives.
We are quite aware that the reason why some cow and calf operations hardly make good profits is their inability to sell off their cow and calf to a larger market. In view of that, we decided to partner with some of the leading abattoirs operators to help us maximize profits.
In summary, George Newton® Cow and Calf Operations, LLC will adopt the following strategies in marketing our cow and calf;
Sources of Income
George Newton® Cow and Calf Operations, LLC is in the beef cattle farming industry for the purpose of maximizing profits hence we have decided to explore all the available opportunities within the industry to achieve our corporate goals and objectives. Below are the sources we intend exploring to generate income for George Newton® Cow and Calf Operations, LLC;
From the survey conducted, we were are able to discover that the sales generated by a commercial livestock farm depends on the size of the ranch and the network of the business. We have been able to examine the beef cattle farming industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast.
Below are the projections that we were able to come up with for the first three years of running George Newton® Cow and Calf Operations, LLC;
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown that can impact negatively on household spending, bad weather, and unfavorable government policies.
Any business that wants to grow beyond the corner of the street or the city they are operating from must be ready utilize every available means to advertise their business. We intend growing our business which is why we have perfected plans to build our brand via every available means. Below are the platforms we want to leverage on to boost our cow and calf operation;
Sale prices of calves are subject to fluctuation as part of the cattle financial market. The relatively long period it takes a cow–calf operator to build up a beef herd and raise new calves to the desired weigh tends to extend the length of such a cycle.
Generally speaking, a cow will cost between $2,000 and $5,000 a cow. The actual cost depends on the weight of the cow, the gender, and the breed. Yearlings usually sell for between $800 and $1,500. Cows will also differ in price based on whether or not they are dairy cows or beef cows.
We are quite aware that one of the easiest means of penetrating the market and acquiring loads of customers for all our cow and calf is to sell them at competitive prices.
One thing is certain, the cow and calf operation business makes it possible for farmers to place prices for their livestock based on their discretion without following the benchmark in the industry. The truth is that it is one of the means of avoiding running into loss. The easier you sell off your calf when they are mature the better for your business.
The payment policy adopted by George Newton® Cow and Calf Operations, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that George Newton® Cow and Calf Operations, LLC will make available to her clients;
In view of the above, we have chosen banking platforms that will enable our customers make payment for calf purchase without any stress on their part.
Below are some of the basic areas we will spend our startup capital in setting up our cow and calf operation;
Going by the report from detailed research and feasibility studies conducted, we will need an average of $650,000 to start a standard cow and calf operations business in the United States of America.
No matter how fantastic your business idea might be, if you don’t have the required money to finance the business, it might not become a reality. Finance is a very important factor when it comes to starting a business. These are the areas where we intend sourcing for fund for our business;
N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $450,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all of these factors are missing from a company, then it won’t be too long before the business closes shop.
One of our major goals of starting George Newton® Cow and Calf Operations, LLC is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to sell our calf a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
George Newton® Cow and Calf Operations, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our organization’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner of our business strategy.
We know that if that is put in place, we will successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List/Milestone
