Is it all really worth it? This is a question that my wife, Mandy, and I ponder quite frequently. Referring to the tremendous, unsustainable amount of work that goes into our business, Parker Creek Ranch. The debt load, the drought, the endless social media marketing campaigning, the low profit margins and so on. As I sit here in the new year wrapping up December and overall 2019 financials this questions keeps re-emerging. The real issue is that I don’t have a good answer.

We are looking at a 2% profit after it’s all said and done for 2019. Countless hours of hard work building the infrastructure and marketing our products. Endless phone calls, emails and text messages from happy and unhappy customers. Paying myself a meager salary of $24,000 a year for a business that sometimes requires 60 hour work weeks. Note, that it also pays for our families health insurance that costs an absurd $18,000 per year. Realistically that puts my salary plus benefits somewhere around $42,000 a year. Thankfully, we live frugally by choice and I suppose we ultimately have to. $42k for a family of four doesn’t cut it these days. To most farmer’s my salary might sound great, but folks we have been at this business for ten years. Mandy and I have grown a successful consulting business on the side that has helped alleviate what the farm simply doesn’t provide financially. Thankfully our small farm business is doing better than most and perhaps I shouldn’t complain. I often joke that America’s young farmers are the new “starving artists.” In reality it’s the truth.

Direct marketing undeniably yields a higher gross margin, but I’m not sure if the net/profit margin is more than simply hauling animals to the auction barn or selling them on the “hoof.” I can say for certain that it’s a hell of a lot more work and capital inputs. Farmer’s markets are the most unreliable source of sales for our farm. We spend countless hours preparing and attending a farmer’s market, not to mention giving up our Saturdays for the past ten years. Losing the weekends is really hard, especially since our kids are now school age and that precious time just flies by. I can’t even begin to count the number of family and friend events I have missed on the weekends because of farmer’s markets. All it takes is the wrong weather or a conflicting event in the city and we lose money by simply attending. The hidden costs of attending farmer’s markets are real and anyone selling at a market needs to be accounting for them. When Parker Creek Ranch sets up a booth we need a minimum of $2000 to even make it worth our time. The only way we justify it at this point is using the farmer’s market as a marketing avenue for our other services.

We have fortunately seen some success in the past year with our home delivery service. Our home delivery service is conveniently during the normal work week, the timing and costs are controlled and calculated. Additionally, I know exactly what my sales are for the day when that delivery truck leaves the ranch. Greenwashing from big ag and many other issues are negatively effecting our direct-marketing sales as well, but I’m not going to worry about what I can’t control.

Another major factor that has been very difficult to manage around is the weather. When direct marketing livestock, processed and cut to the consumer there is a lot of time and money invested into those animals. A lot of capital being invested to make the delivery and distribution system function as it should. When drought strikes, it’s not as simple as destocking and selling the animals. Chickens, cattle, sheep and so on should be destocked. Honestly at the point of severe drought all of these species can damage the land. A set of calves that is ready to go to the processor within the next few months has significantly more money bundled up in them than I would ever receive at the auction barn. I believe the best thing a rancher can do when drought strikes is sell the livestock and take a vacation. You simply can’t feed cattle through a bad drought without major financial implications. South Texas is the land of drought and floods. Inevitably we will experience severe droughts. I’m talking 120 days without a drop of rain, 100 degree highs for 90 days in a row. There aren’t many other places in the United States that experience those kind of weather extremes. All of that being said, the grass-fed business is really hard to be in when it doesn’t rain. One might argue that we should irrigate, but as a local rancher has told me more than once “irrigation doesn’t replace rainfall and if you think it does then you are on the way to going broke.” Folks, you simply can’t irrigate your way out of a drought either.

All of that being said, am I going to just send my livestock to the auction barn? Not necessarily. I think there is a better way to market high quality livestock. We don’t follow the status quo here at Parker Creek Ranch. I really believe in the qualities of our Longhorn/Devon cross cattle. We have decades of evidence to show that they produce premium quality beef for the grass-fed marketplace, thus why wouldn’t they finish with excellent qualities in a feedlot as well? We have been selecting for genetic phenotypes that are polled, red cattle among many other more important qualities. Honestly they look just like a Red Angus, but smaller framed and a bit thriftier. I think these cattle are the answer to my problem. They give me the ability to market my cattle and their offspring to any marketplace, including the auction barn.

What’s in store for the future of Parker Creek Ranch? A good friend of ours, Annemarie Sullivan, who owns Sullifarm in East Texas wrote about a small town grocer she visited on her Facebook page. “What if we could take what is popular, the neighborhood grocery store, and just reinvent it?  I visited a place who has done just that, in Ann Arbor Michigan.  Everything in the store is locally produced, with pictures, information, and farm names with every item in the store.  The store let’s each farmer drop off their goods, price them, and then the farmers take home 75% of sales price.  It’s simple, and it’s effective.  In the first four years of operation, the two neighborhood Argus farm stops paid out over 5 million to local food producers.  Just two little stores!  Imagine if we had something like this in every city?  Imagine how many more farmers would fill the gap, if it were just a little easier to make a living at it?” I can only imagine such a place, but I am not sure the economics are in their favor. The regulatory system is set up to make small business fail, especially so in the grocery business. Sounds dreamy and amazing though doesn’t it? Maybe there will be a revival of such places in the near future.

 Perhaps we will direct-market a certain portion of our beef and the remainder will be sold as weaned calves or yearlings to other grass-fed producers. Our marketing avenues may change over the coming year. If a worse case scenario drought takes its toll I will send them to the auction barn and they should bring top dollar. We will continue to produce eggs because they are a good cash flow and profit maker for our farm. Perhaps we will expand into sheep and goats in the coming year to have a greater diversity of enterprises that can be marketed in a variety of ways. Our home delivery business will keep pushing forward until we can develop a cooperative model with other farmers. We have already laid the foundation for a local marketing and distribution co-op or similar business. I truly believe it’s the future and important for our food security. The reality is that there just isn’t an easy answer to all of this. Farming is hard. It’s hard to make a decent living, it’s hard work and it will test your mental fortitude. It takes grit and determination to succeed. Each person’s success is defined by oneself. Change is inevitable, so we just keep getting after it!