Slope Farms Our farm Our work with other farmers Experience with leasing land Models for seasonal grazing
Slope Farms LLC what we do Grass fed beef producer: 200 head cattle Branding, aggregation, quality control, marketing to wholesale customers Serving 21 grass fed producers Slope Farm to School: antibiotic free dairy beef to K-12 NY State public schools
Slope Farms production 200 head cattle Home farm: 90 acres pasture 90 head Lease pasture: 80 acres 70 head Work with contract grazer---40 head Brood cows: 30 Purchase grass fed feeders: 50/year One employee approximately half time Contract for hay making and trucking of live animals and meat
Branding, aggregation, quality control, marketing NY grass fed beef industry avoids many problems of feedlots---but What to do about aggregation and quality control? Marketing grass fed beef from small to moderate size farms to wholesale customers Buyers: butcher shops, restaurants, retail stores purchasing whole and half steers
Slope Farms services to grass fed producers Predictable purchases, strong pricing about 50% above commodity, needed for profitable business safely plan future production and herd expansion of their value added product. To lower risk, forward contracting at predictable price commitments to purchase cattle that will be ready for market 6 months to two years in the future. Technical support for herd selection, grazing, and winter feeding. For established producers, in partnership with impact investors, offer long-term leases on nearby grazing land with fencing infrastructure.
Slope Farms' leased pasture land 80 acres leased poor quality pasture initially Stocked with 60 head. 35 brood cows and bulls 25 calves new to 6 months. $15 / acre for 10 year lease
Lease price, fence, and pasture quality fenced by us---cost approx $200/acre 10 year lease- fence cost $20/acre/year Total cost: lease + fence = $35/acre I d gladly pay $50+/acre for fenced land with better grass Could give me 1.5 to 2 x stocking density as on home farm.
Lease Lease market prices not transparent. Ideal land has fence and water---but rare If you put fence (invest $) in someone else s land, you need long term lease Well worth paying higher lease for fence Exit clause for owner with prorated payback fence cost. 1 year- 90% 5 years 50% 9 years 10%
Cost/head/day for lease Land access can be the major expense for stocker model Examples If $50/acre/season 180 day season One stocker/acre (600 lb/acre) $0.28/head per day for land = $50/head/season Two stocker/acre $0.14/head per day for land = $25/head/season
Seasonal Cattle Grazing Models Two Simplest models Temporary ownership cattle Buy spring graze May 15 to Nov 15 sell @ higher weight Contract grazing someone else's cattle Does not involve ownership
Stocker Overhead Costs Land---lease or own; from $0 to $75/acre How much does it cost per year to own land Fence, water, equipment; from $0 to $30/acre
Stocker Overhead Costs Labor--- yes, your labor Or hired labor 0.5 to 2 hours per day $20/hour x 180 days = $3600/season
Stocker Overhead Costs Insurance---about $500-1000 Liability---if leased land will lessor require it? Cattle loss---if borrowed funds, lender required? Trucking to and from market, about $10/head each way Tractor trailer about $5/loaded mile Minerals about $5/head/season Vet cost---zero to $5/head
Contract grazing: Someone else's cattle Compared to ownership of cattle: Lower cash needs Lower risk Lower revenue Revenue based on per head/per day basis---i ve seen from $0.60 to $1.50/head/day or weight gain NOT based on price of cattle Lowers risk for grazer Requires access to land and fencing Reputation and trust of cattle owners Market demand for contract grazing
Contract grazing Currently a buyers market i.e. more grazers than people with cattle People with years of proven experience are in demand There will be greater future demand for skilled contract grazers. My personal experience working with contract grazers has been mixed.
Contract grazing enterprise rough sketch 100 cattle, avg 600 lbs Need 100 acres if one animal/acre Graze 180 days $1/day/head=$100/day revenue Revenue: 100 head $18,000 season; $180/acre Subtract expenses: land $50/acre; labor $20/day; insurance; mineral $10,000 for season Net profit to grazer $8000 (plus $3600 labor)
Temporary ownership cattle Buy spring graze sell in fall at higher weight Profit based on Expenses Rate of gain Days grazed and cattle price at 2 points---purchase and sale Requires Access to land and infrastructure Access to capital for 6 month ownership Access to healthy good cattle Access to strong pricing at point of sale
Seasonal ownership Greater reward possible with higher risk. Revenue depends on Average daily gain Price of light cattle at purchase date, and heavier cattle at sale date BREAKEVEN POINT--- How much lower can price can be at sale without losing $ Given purchase $, expense, and rate of gain.
Tools for Stocker analysis Livestock & Forage Production, Finance & Economics Models for analysis of operation http://www.montana.edu/softwaredownloads/ livestockdownloads.html
Expected average daily gain 2.00 (lbs/head) INPUT DATA (1 throught 22): 1.) Purchase price of stocker cattle ($/cwt): $140.00 2.) Average purchase weight per head (lbs): 600.00 3.) Number of head you intend to pasture: 100 4.) Monthly pasture charge/head ($): $50/acre 6 months 1 head/acre 8.33 5.) Number of days on pasture: 180 6.) Expected average daily gain (lbs/head): 2.00 7.) Interest rate on borrowed money (%): 6.00 (or opportunity cost of own money) 8.) Tax on livestock ($/head): 9.) Veterinary and medical expenses ($/head): 2.00 10.) Cost of salt and mineral supplements ($/head): 5.00 11.) Transportation costs to pasture ($/head): 10.00 12.) Transportation costs to market ($/head): 10.00 13.) Fencing repair costs for enterprise ($): 0.00 14.) Total fuel costs for enterprise ($): 200.00 (excluding cattle transportation)
16.) Expected death loss (%): 1.00 17.) Expected shrink at time of purchase (%): 0.00 18.) Expected shrink at time of sale (%): 3.00 19.) Sale commission and yardage ($/head): 12.00 20.) Miscellaneous costs ($/head): 0.50 21.) Cash cost of YOUR labor for enterprise ($): 3600 22.) Expected selling price ($/cwt): 130.00
RESULTS Computed sale weight (including shrink): 931.20 Interest charge or opportunity cost per head: $26.62 Total cost of gain/head (excl. purchase cost): $169.70 Total Cost/Head (Including Purchase Cost): $1,009.70 Total cost per head per day of pasturing: $0.94 Cost per pound of gain (including interest): $0.51 Breakeven selling price at given purchase price: $108.43 Breakeven purchase price at given selling price: $173.48 Net return per head: $200.86 Total net return: plus $3600 labor $20,085.94
Expected average daily gain 1.20 (lbs/head) INPUT DATA (1 throught 22): 1.) Purchase price of stocker cattle ($/cwt): $140.00 2.) Average purchase weight per head (lbs): 600.00 3.) Number of head you intend to pasture: 100 4.) Monthly pasture charge/head ($): 8.33 5.) Number of days on pasture: 180 6.) Expected average daily gain (lbs/head): 1.20 7.) Interest rate on borrowed money (%): 6.00 (or opportunity cost of own money) 8.) Tax on livestock ($/head): 3.50 9.) Veterinary and medical expenses ($/head): 2.00 10.) Cost of salt and mineral supplements ($/head): 5.00 11.) Transportation costs to pasture ($/head): 10.00 12.) Transportation costs to market ($/head): 10.00 13.) Fencing repair costs for enterprise ($): 0.00 14.) Total fuel costs for enterprise ($): 200.00 (excluding cattle transportation)
RESULTS Computed sale weight (including shrink): 791.52 Interest charge or opportunity cost per head: $26.62 Total cost of gain/head (excl. purchase cost): $167.88 Total Cost/Head (Including Purchase Cost): $1,007.88 Total cost per head per day of pasturing: $0.93 Cost per pound of gain (including interest): $0.88 Breakeven selling price at given purchase price: $127.34 Breakeven purchase price at given selling price: $143.52 Net return per head: $21.09 Total net return: plus $3600 labor $2,109.12
Barriers Land---lease or own Infrastructure---fence and water, lease or build Cattle handling equipment loading, weighing, treatment Capital---for the above and for cattle Cattle --- numbers, quality Market---access to best price to buy and sell
Barriers Knowledge Peers Mentors
Pasture Bank Initiative of CADE Delaware County Economic Development Delaware County Cornell Coop Extension Stocker initiative Town of Meredith