Investors interested in western cattle ranches for sale first need to understand the dynamics of the cattle market today. Prices for steers and heifers are at record highs right now. While that’s great news for investors considering turnkey purchases, including livestock, looking to the future is important.
If the prices make a steer and heifer sale a no-brainer, consider what your herd might look like next year, or the year after. When considering western cattle ranches for sale, immediate cash flow is important. But so is cash flow in the years to come.
Record prices make western cattle ranches more valuable
According to industry analyst Abbi Prins from CoBank, an agribusiness financial services company, the temptation to sell steers and heifers while prices are at their peak can be very tempting. But, she said, it may take years to rebuild a marketable cattle herd. In other words, the high prices for cattle cut both ways.
Presently, the U.S. cattle market is in its fifth straight year of cattle herd reduction. Today, there are 28.2 million head of cattle in the country. That’s the lowest cattle inventory in the United States since 1961.
Herd reduction is being blamed on everything from drought and high feed prices to the COVID-19 pandemic. Regardless, the lower inventory of cattle on ranches across the West, and across the country, is driving steer and heifer prices higher.
Finding the right western cattle ranch for sale
For investors, it’s easy to look at the ongoing price conundrum with a critical eye. But the best solution for taking advantage of high prices is to find western cattle ranches for sale that provide all the factors that make raising cattle successful.
For instance, large acreage properties with good on-property grazing can significantly cut into the price of cattle feed. Ranchers with good water resources can often grow enough hay to support their own herd, and have excess feed on hand to sell to others. Or, with proper storage, a good hay crop one year can supplement feed for the herd if a lean year comes next.
And, ranches that offer excess land that can be leased by others for grazing have a distinct advantage when such ranches hit the market. Additionally, public lands grazing leases that accompany a ranch title dramatically increase the value of western cattle ranches for sale.
There are some excellent cow-calf operations on the market today. But finding western cattle ranches for sale will require some effort. The idea is to find properties that have excellent livestock infrastructure (intact fences, segregated pastures, feed storage building, etc.), access to ample water and, of course, access to feed.
Running a successful cow-calf operation when prices are high requires discipline. Investing in a cow-calf operation requires discipline and the help of the right broker. Finding someone who knows what it takes to be successful running cattle under any market situation is absolutely vital.
Know what you’re looking for in cattle ranch for sale
If a cattle operation is to be a ranch’s main source of revenue, investors need to check a few boxes. And they should check those boxes before they make an offer on one of several western cattle properties for sale.
High prices may not last forever. But, in the short term, high prices for beef cattle might impact the marketable prices of western cattle ranches properties for sale. Turnkey properties that come with an intact herd and large swaths of grazing lands (leased or otherwise) are likely going to cost more. Investors can trim that expense by selling steers and heifers at all-time high prices. But what does that mean for next year? Or the year after?
So, the property matters. Good and plentiful grazing habitat, the ability to grow feed, access to public lands leases for additional grazing, intact fences and infrastructure … they all matter, now and years from now.
Final word
High cattle prices are great for a cattle ranch’s value, but investors need to view purchases with a critical eye. On one hand, selling heifers and steers without having to endure the expenses that come with raising them is a nice in-the-moment benefit. But, with prices so high, what does that mean for your depleted herd next year, or the year after?
With help from the right broker, investors looking for western cattle ranches for sale can find ranches on the market that work under these conditions. In other words, use an experienced professional who can find cattle ranches that can sustain herds while also taking advantage of high beef prices.
It’s a tricky tight-rope walk. When you’re looking for western cattle properties for sale, your success in finding the right ranch will rest with the broker you hire to help you in your search.
