By CELESTE BAUMGARTNER
Ohio Correspondent

TRENTON, Ohio — Steve Beiser has 1,000 head of cattle in inventory all the time. It’s not news to him that times have been tough.

“Twenty years ago when the economy was bad, farming would prosper, but now the rules are just too close,” said Beiser, who farms with his son, Stevie. “The economy right now is faltering and it is to the point of not making money.”

Beiser said that ethanol is part of the problem. “Ethanol has made a mess of the livestock industry,” he said.

But there are other factors.

“My seed, my fertilizer, my chemicals, my land rents, if I purchase land, everything has gone up,” Beiser said. “I don’t know exact percentages, but I’m guessing anywhere from 10 to 50 percent.
“A year ago in November I paid $450 a ton for potash. Today it’s probably $800 or $900 a ton. A year ago we paid $315 a ton for 28 percent nitrogen. Today we’re looking at, and I’m guessing a little bit, somewhere between $800 and $850 a ton.

“Rents have gone up on land anywhere from $10 to $50 dollars an acre,” he added.

Feeder cattle weighing 700-710 pounds are costing $1.03-$1.05 a pound, Beiser said. Fat cattle today weighing 1,150-1,200 pounds are bringing from 94-96 cents a pound.

“These numbers I can deal with,” Beiser said. “The big kicker is the cost of production that is so unstable. I sold two semi loads of cattle about 30 days ago; that was 90 head and they averaged 1,205 pounds. Those cattle netted me $10 apiece, or $900.”
Before ethanol, Beiser was spending between $1-$1.25 a day on feed. When corn went to $7, the cost for fattening cattle for one day jumped to $2.50.

“Every animal that I buy from 600 to 700 pounds roughly takes 200 days to get finished,” he said. “Simple math tells you $2 per day per animal times 200 equals $400 to feed that animal, out on top of what you paid to buy the animal.”

Other producers may say they make more of a profit than that, but Beiser said it is all in how one figures the costs.

“You have to figure your cost as it goes,” he said. “When you have to justify cost to yourself, to your business and to your bank, you have to put all the costs against that animal. A lot of people will not put equipment, buildings, maintenance costs and labor.”

As far as cost cutting goes, Beiser said one can cut pennies, but not dollars. “You can’t cut costs and do it right,” he said.

It’s the need for ready cash keeps him in the livestock business.
“With livestock, hogs and cattle, we get paid every month, so we get at least 12 paychecks a year,” he said. “They don’t all make money, but at least you have cash flow.

“What we found in the last three to five years, if you borrow any money, do any banking, debt is not as big an issue as cash flow. You’ve got to have cash flow.”

The Beisers have 4,000 acres in crops and, day-to-day, that is a bigger financial risk than livestock, he said.

“When the grain bins are empty, it’s over,” Beiser said. “If you’re smart enough to sell all your grain ahead at a profit, if you’re smart enough to divvy it out in a 12-month period – I need to talk to you.
“It’s too hard to predict everything and that’s what it amounts to: prediction and luck.

“Grain farming is easier than livestock – people will disagree,” he said. “When you have to get up 365 days a year and feed cattle it is a bigger challenge, but that’s what I’m here for. When you take the livestock away, your risk triples.”

Yet, the Beisers are still making money. “We have to work longer and more, and we work on a slimmer margin,” he said. “Instead of raising 500 head of cattle to make cash flow, now we’re up to 1,000, and that could be as much as 1,500.

“Instead of making a good living on 1,000, 1,200 acres, now we’re on 4,000 acres, and that’s not necessarily right – but I don’t know what else to do.”