Entrepreneurship is hard. It comes with an abundance of failures and mistakes, but learning from those mistakes is what makes a good entrepreneur. This is a story of how my siblings and I started our own feeder cattle business, and how we developed our program as we gained more experience. As this story progresses, I will point out key things that I believe makes for a good entrepreneur.
Growing up, I always called myself a hobby farmer. My family owned a five acre spread that was filled with horses that we raised and rode. In my sophomore year of high school, my family exited the horse business, leaving an empty lot at home. My two siblings and I decided to venture into the cattle business.
We started off with beef bottle calves. We would have four to five bottle calves at one time. Every morning, one of us would go outside and bottle feed them. We would grow the calves to about five hundred pounds and resell them. While it was cheap to get into bottle babies at the time, there was more work and expenses to raise bottle babies. Milk replacer for one is not cheap, and bottle babies can get sick much easier than a standard feeder calves that stay on their mother’s milk. Bottle baby prices for beef calves skyrocketed from 350 to 600 dollars at my local sale barn. There was no way to make any money at those prices. This leads to key number 1: Always know your breakeven point. You have to be smart with your money and where you spend it. My siblings and I did not borrow any money to start our business. We started our business with the money we saved up. With prices of bottle babies being high, we had to think of a new way to make money.
Key number 2: Be observant. My sister noticed that 300-pound calves were bringing about the same price as bottle calves. Buying a 300 to 350-pound calf meant that no bottle feeding was required and generally their immune system is better. We started buying 300-pound angus cross male cattle. We would pick up a couple at one sale, then a couple more at another until we had a group of about 20 calves.
At the beginning of buying these calves, we bought feed from our local farm store. Feed is the costliest part of a feeder cattle business, meaning that gaining an edge in that expense category can make a huge difference. One day, we bought hay from our neighbor, who has his own shorthorn cow calf operation. He noticed that we were raising cattle instead of horses. As our conversation progressed, we talked about feed. He asked me where I get my feed from, and I told him that I get it at the farm store. He then went on to say that he mixes his own feed to feed out his cattle, and offered to sell us feed that he grinds. Key number 3: Reach out to experienced people in the industry that you are in. From that point on, I would go to my neighbor with empty mineral tubs in the back of my truck and get feed for our cattle. The feed was a balanced ration for backgrounding cattle, and it was cheaper than going to the farm store.
Key number 4: Keep growing. “If you do what you have always done, then you will get what you always got.” That was a saying my ag teacher in high school had posted in the front of the classroom. I think it is important to be looking for ways to grow your business. After my siblings and I sold a couple of groups of calves, we decided to invest in a head chute. We always did our vet work at the sale barns. Each sale barn had a different vet that would charge a different fee to cut, vaccinate, and deworm a calf. After we bought the head chute, we did our own vet work. We even tagged our cattle. This allowed us to keep records on individual calves. We could tell if a calf was constantly getting sick, rather than my sister shouting: “Which one did you say was sick?”
Me: “The black one!”
Sister: “That narrows it down to about 20 of them.”
As more groups of calves were sold from the Merritt Feeder Cattle Business, people began to recognize what my siblings and I produced. Key number 5: Have a good product. When you bring good cattle to the sale barns, buyers notice. When the auctioneer makes the statement of saying “These guys always bring a good group to sell,” you get a sense of pride. My siblings and I always tried to buy good quality cattle to grow and resell.
Only one thing remains the same in the cattle market, and that is that everything changes. The cattle market went through a huge upswing, then it suddenly came back down. The margins in buying and reselling cattle got pretty slim. Once again, our feeder cattle business had to make a change. Back to the second key of being observant, we realized that growing feeding cattle to 700 pounds could be more profitable. While there was higher risk of having more money tied up in feed, we also knew that doing what we had always done would not be profitable. One day at the sale barn, we had one of the highest selling calves in our weight group. Having well sought after cattle helped bring more money into our business.
I am proud to say that my siblings and I grew our business from 5 bottle babies to about 50 feeder cattle at one time. We invested in new sheds, feed bunks, and fencing to improve our business. While we are not a large scale cattle producer, we can still raise as good of feeder cattle as any. Starting your own business, especially in agriculture, is challenging. If it was easy, everyone would do it. You might fail, but learning from your mistakes will lead to success. If you are determined, you can make it. Take my key points for what they are worth. I wish anyone starting their own business the best of luck.
My name is Luke Merritt, and I am a senior at Western Illinois University. My major is agriculture business with a minor in agronomy. I currently work at the University’s Research Farm as a Data Collection Specialist. I hope to have a career as a loan officer within the agriculture industry.