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Show cattle on hand that must be fed or sold. Purchased feed is expensive, and livestock ' sale prices are far below those of 1972 and 1973. 1. If you have sufficient, relatively cheap "home grown" feed, consider feed- Most machines are basically consumptive or users of money, so don't commit yourself to additional investments invest-ments In machines if at all possible. 6. Income tax management: manage-ment: Probably never before has this become so important. import-ant. We manage taxes for one purpose only, to reduce taxable tax-able income. Chances are many beef producers will be showing a loss this year. On this assumption, a special "Let's Look Ahead" will follow on how to handle ranch operating losses. Cattlemen Now Paying Piper, Tightening Belts lng your own cattle over the winter. Many feed-stuffs have a relatively low value in the market since they must be used at or near the site of production. 2. Background or overwinter over-winter calves only if cost of gain can be maintained at about 30 cents a pound or less. This means that considerable con-siderable "salvage" feed must be available. Commercial Commer-cial feeders will only pay between be-tween 25 and 3.0 cents to come out of 45 cent beef. 3. Do not slack off on management man-agement Intensity. Now is not the time to neglect pregnancy testing, herd health, nutrition nutri-tion and other proven management man-agement practices that pay off. Practice the "stitch In ... time saves nine" concept to reduce costs. 4. Protect your credit carefully. a. Review your credit position with your lender before be-fore a problem becomes critical. Lenders In Utah have said they will work with their borrowers regarding repayment problems on current cur-rent debt loads, but expect the borrowers to take the Initiative. Also, new loans will be carefully evaluated and management skill will be crucial to selling the lenders successfully. Even though money Is "tight", there appears ap-pears to be enough for agriculture's agri-culture's needs. b. Evaluate your expected expect-ed cash flow through 1976. Repayment commitments made on the basis of expected expect-ed high prices may need to be revised. This is called liquidity, the level of which determines whether the payment pay-ment are made or not. c. If you have big cow-calf cow-calf investments and cannot withstand a loss, Investigate the possibility of some help through emergency or drought loans via Farmers Home Administration. It Is possible to have both at the same time. 5. Use your operating capital cap-ital (and short term debt) only for income producing purposes, such as fertilizer.; There always comes a time when the "fiddler" must be paid if we are going to "dance to his tune." The cattle feeders are well Into their paying period, and the cow-calf producers are now feeling the effects of the ; "fiddlers" price for "dancing." "danc-ing." Until 1972 we had experienced ex-perienced a period of rela-; rela-; tlve stability for over two decades. Then a series of ' events occurred whose ec-' ec-' onomic effects are rumbling throughout the economy affecting af-fecting every business, family, fam-ily, and individual. We are now in an unprecedented inflationaryrecession in-flationaryrecession (or a recessionary Inflation) period, per-iod, whatever that means. The 70, 80, and 90 cent' prices received by cow-calf producers in 1972 and 1973 allowed some "belt loosening," loosen-ing," but now some painful "cinching up" is called for. The steady build-up of beef cattle numbers, plus the im -pact of other economic situations situ-ations could not maintain those high prices for very long. Supply was outstripping demand, and feed costs were getting too high. Once again we have to eat our way out. How to pay the bills and makr a living while this adjustment works itself out Is a tough management problem. In addition, cow-calf cow-calf producers have the added ad-ded worry of high Inflation rates. The best guesses on this problem is that inflation cannot be reduced to even eight percent per year until the end of 1975. Given present pres-ent prices for beef and feed, plus the outlook for the next two years, what are the strategies available? The following cow-calf producer's recommendations recommenda-tions are closely tied to the availability and cost of feed. For the cow-calf producer, none of the alternatives are very attractive. He has live |
