The phone rings from a possible buyer. This is a frequent question that is asked once or twice a week, “What is the market for Texas Longhorns?”
You can’t blame a person for asking the question, however, what do they expect the answer to be?
Reply #1. Yes all your neighbors want to buy lots of Texas Longhorns. They are just waiting on you to raise them. They will pay dearly for your cattle. You will get rich quick—do it.
Reply #2. No one knows if you have cattle for sale. You will have to create an awareness of availability and make some marketing efforts to attract prospective clients to get good prices.
Make this mental picture in your mind: If you were starting a tire business and everyone in town wanted to buy more tires than any store was providing--that someone had promoted the use of tires, but there were no tire stores? To have a ready-made business like that would be a dream, but there will most likely be a tire store in place before you get the idea. Yet, that is the hope of some cattle buyers to slip into a market already promoted and easy to succeed with little or no effort required---it won’t happen! Not with tires or registered cattle.
To start a tire store it will involve a profitable product and service: how fast can you replace a set of tires? Can you provide a better tire at a lower price? The Texas Longhorn business, as a business, is just like any other business. Each person has to create a market for as many cattle as they raise---surprise? This involves normal marketing or finding a niche market that is new and can be developed.
This is an issue that has faced every entry-level business person. The good news is--it is solvable. Here are some good, bad, cheap, and, or, simple types of business development for the Texas Longhorn producer.
- Always look at cost of advertising on the basis of dollars per person reached. For instance, a $200 ad in a school annual when only 100 year books are printed is a cost of $2 per person who glances at the ad.
- Internet/facebook may have millions of people who are prospects but thousands of people are using it at very low costs. It is cheap, yet be aware of the stampede, and getting trampled. Unless the insertion is eye- catching you may have a free ad that is lost in the dust.
The largest profits in the cattle business are made by (1) raising and marketing top-end registered cattle and (2) selling retail beef. Producers who don’t target these two jewels will have a problem making good profits.
Serious cattle people should sell some retail beef. Otherwise, they miss the most profitable part of the easiest money for lower value genetics.
Marketing lower-value cattle is a bigger consideration than most realize when entering the business. All producers have to dispose of cull specimens—but to make good profits, they need a clear business plan. Why? Because bottom-enders cost as much to raise as the high-dollar types, but they bring a lower return on time and feed.
In today’s economy, ranchers who raise generic cattle should avoid local liquidation auctions. Income from those sales will rarely be enough to buy property and also pay the bills. An old-timer once said that a rancher can pay the mortgage or give yourself a salary. You can’t do both. In fact, according to the USDA, over 1,000 ranchers go broke every month, and have been for dozens of years. The main causes are taxes and government regulations. Nevertheless, the future for Texas Longhorns is bright. DCC has found Texas Longhorn cattle to be the most profitable of any breed. Selling cull cattle is especially sweet, because we diversify our products and market many spin-offs.
