The grass-fed beef enterprise at Parker Creek Ranch is the heart of our ranch business. Our family has been raising cattle on this land since 1846. While the production systems have changed over time, we are proud to continue this family tradition. It has been a challenge to say the very least. We dove back into grass-fed beef almost 4 years ago, after a long hiatus due to dry weather patterns. Prior to that we were exclusively a cow/calf operation.

To give you a brief overview of our grass-fed beef enterprise, these are the marketing points that we utilize. Our beef is 100% grass-fed and finished. We utilize a unique genetic cross that gives our cattle the ability to thrive on our dry, drought prone rangelands. Our cattle never receive antibiotics, growth hormones, or grain. We don’t use broad spectrum herbicides on our pastures. We rotate them frequently through an intensive rotational system to ensure fresh grazing, pasture and soil health, and environmental stewardship. Our animal welfare goes beyond the pasture by utilizing sound stockmanship principles when handling our cattle from the catch pens to the processor. Our calves finish at 24 to 30 months old ensuring you a nutrient dense, marbled, quality product that is packed with flavor. Our beef is dry aged for 14 days. The cattle are processed exclusively at Dean & Peeler Meatworks a state-of-the-art, federally inspected, custom meat processing plant in Poth, TX.

In 2019 we processed 66 animal units. Our average carcass yield was 520 lbs at about 24 months old. If we let them go to 30 months the carcass yield is closer to 600 lbs. This is grazing our cattle on native and improved rangelands. We do not currently utilize irrigated pastures. Our South Texas rangelands consist of mixed brush and grasses. Our ranching operation is as frugal as they come. We operate on a really low input model that focuses on grazing management. It’s basically a lot of low-cost, permanent electric fences in conjunction with temporary electric fencing and a cost-effective, portable watering system. We don’t fertilize or attempt to control weeds.

A few points to consider in 2019 is that our feed bill was astronomically higher than it would be on a normal rainfall year. We had to purchase several hundred round bales to hold our cattle through the driest months. We have been experiencing a relatively severe drought for over 12 months now and it took it’s toll on our feed bill. This past year was well below our normal rainfall of 22 inches or so. We planted quite a few acres in cool season pasture crops that did not yield due to lack of rainfall. In addition to the grass-fed beef enterprise we also have a cow/calf enterprise. The grass-fed stockers and finsihers primarily utilized the 834 acres of land that we lease. All of the costs below are attributed directly to that enterprise and the land that they utilized.

Grass-fed Beef Enterprise Analysis for 2019

Expenses

• Seedstock $32400

• Feed $7491

• Supplements (Mineral/Salt) $1680

• Processing $31659

• Lease $6822

• Equipment & Supplies $442

• Veterinary $0

• Fencing Repairs $810

• Seed (Winter Pasture Crops) $3396

• Contract Labor $525

• Memberships $456

• Management Software $500

Income

• $157,963

Gross Profit

• $79339

• 50.2% gross margin

• or $95.13/acre

• $1202.10 per animal unit

Don’t let this get you all excited. This is only achieved by direct-marketing our product. Meaning we store, market and distribute the product. I’m talking about every pound of beef, bones and offal directly marketed and delivered to the end consumer. Those costs are not accounted for within the enterprise. The marketing and delivery side of the business is a whole beast unto itself. These numbers also don’t include labor (salaries) and other business overheads, which we will cover in one of the upcoming “the real numbers” blogs. You will soon find out in the next blog that this is where financially things get a bit complicated. It’s all about scale folks, and do you have access to the capital to achieve scale. Overheads can “eat” ranching operations alive, especially farms or ranches that direct market their products.

I also wanted to briefly talk about the Top Priority Investments associated with this enterprise. This includes new construction or equipment purchased that is directly tied to the enterprise. Remember this is ten years down the road from starting our business. The investments were significantly more in our startup years. What are top priority investments? Holistic Management International define a top priority investment expenses “are those investments that would resolve major human resource or production issues, and/or increase your income over and above what you are currently earning (by addressing the weak link in an enterprise). These investments may not address these issues in one year, so you need to consider the return on investment time frame as you prioritize these expenses. These are new expenditures—investments to build or improve your business as it currently exists and create more wealth.” For example, one of our investments was rebuilding a portion of the cattle pens. Our catch pen was in bad shape. The wire was falling down constantly and cattle were jumping over when pressured, which is often the case when working in tight quarters. For a relatively small investment, we rebuilt the primary catch pen. It won’t have to be done again for at least 50 years. Here is an example of some of our Top Priority Investments for 2019:

• Electric Cross-Fence $1277

• Water Line Expansion $632

• Bale Unroller $1026

• Perimeter Fence Rebuild $672

• Cattle Pens Rebuild $1455

• Larger Livestock Trailer (Used) $4500

Grass-fed beef has certainly been the financial backbone of our ranch business for several years now, but it doesn’t come without it’s challenges. I would say the number one hurdle or challenge that one might face is drought. Drought can absolutely cripple a grass-fed beef operation. As I have said before, Texas is the land of drought and floods. Be financially prepared and have the resources to “weather” the drought. If you have access to an appropriate amount of land (can be self-sustaining during good times and bad) then grass-fed beef might be a great enterprise to add to your farm or ranch business.

Questions or comments please feel free to post them below or e-mail me directly: mail@parkercreekranch.com