What is in this article?:
- On Megehee farm: Attention to detail pays in producing quality cows
- 'Bigger is not always better'
- Prairie soils 'really grow grass'
- Input costs outpacing beef prices
“The cattle business isn’t one that young people can readily get into, because it doesn’t provide cash flow unless you’ve got land and equipment," says Jacob "Jake" Megehee, Macon, Miss., producer. "But once you get everything paid for, cows will cash flow, and if you’re careful you can have a pretty good income.”
“COWS JUST LOVE IT — it’s like ice cream to them,” says Jake Megehee of the dried distillers grains that he uses as a feed supplement for his cow herd.
Input costs outpacing beef prices
Beef prices are very good now, he says, “And that’s good — but our costs have shot up too. Ammonium nitrate, for example, is now over $525 per ton. There has always been a rough rule of thumb in this business: How many 500 lb. feeder calves does it take to buy a pickup truck? And that number has kept going steadily upward. The price we’re getting for our cows hasn’t kept up with the price of our inputs.”
However, Megehee says, increasing land values help offset some of the inflation in other prices.
“Many farmers charge a 3 percent to 4 percent opportunity cost for land. But land value usually increases that much or more — which is good, considering you’d be hard pressed these days to get 1 percent on a bank CD.
“That’s one reason land prices are going up and people are investing in farmland. Even this black prairie land is bringing $3,500 to $4,000 an acre — if you can find any for sale.”
Megehee is vice president of Mississippi Cattlemen’s Association and he and Martha travel to meetings all over the state, as well as to national meetings and events.
He’s also on the Mississippi 4-H Foundation board. “It’s a joy to see so many smart, talented young people doing agriculture projects and thinking about careers in agriculture,” he says.
“The cattle business isn’t one that young people can readily get into, because it doesn’t provide cash flow unless you’ve got land and equipment. For most people in the cattle business, that’s their second job — we’re mostly a bunch of old folks. But once you get everything paid for, cows will cash flow, and if you’re careful you can have a pretty good income.”
He cautions, though, “Cows are like row crops — you’d better have a marketing plan before you put the first cow in the pasture.”
Cows are “ like a savings account on hoof,” Megehee says. “If you need new tires for the pickup, or a new fridge for the house, you can take one or two cows to the sale barn and walk away with cash. And you can run cows on land not suited to row crops.
"But, you’ve really got to love cattle to stick it out in this business, because invariably they seem to get through fences when you’re on your way to Sunday School or to an important meeting. Martha has received calls from the Sheriff’s Department late at night when I was away, telling her that black cows were on the highway near our farm.”
Megehee also serves on the Beef Board, which handles the $1 checkoff fee that’s paid every time a cow changes hands.
“It brings in about $800,000 a year,” he says.“About half of that stays in the state of Mississippi to promote beef.”
He has led a crusade for a statewide additional $1 checkoff to promote the beef industry, which must be approved by the legislature before the state’s 17,000 beef producers can vote on the measure. He hopes to continue an education program “to get producers proactive on beef issues instead of continuing in a reactive mode.
“This money could be used for research, education, youth programs, and any other imaginative means to promote our beef industry,” Megehee says. “The money would be removed from the proceeds at the sale site and could be refunded to the seller by written request to the Beef Board. The additional $1 would be completely voluntary for each producer.
“It’s something that’s very much needed, because research has shown that each $1 invested returns $5.55 to the beef producer.”