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217: Before You Add Another Side Hustle to Your Ranch, Listen to This · CattleUSA Daily

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  Welcome to the Cattle USA Daily podcast, your go to source for
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  the latest livestock markets, industry insights and the
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  updates shaping agriculture today.
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  I'm your host Lauren Moylan, a passionate advocate for
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  agriculture, here to keep you informed and connected.
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  Now let's dive into today's episode.
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  Ranch income feels a lot like rainfall sometimes.
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  When you get it, it's great, but you can't count on it showing up
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  exactly when you need it. So a lot of producers are
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  looking for ways to diversify, bring in extra money, stabilize
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  the business, and maybe even create a revenue stream that
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  keeps the ranch afloat in tough years.
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  But here's the problem. Most diversification actually
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  ends up being a distraction. And distraction costs more than
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  it makes 10 times over. So today we are not talking
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  about add more things. We are talking about how to add
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  income without blowing up your time, your labor, or the core of
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  your operation. You know how ranchers are.
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  Someone hears that their neighbor down the road made some
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  money doing a pumpkin patch or selling freezer beef or leasing
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  land out for weddings, and suddenly that sounds like a
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  perfect next move for your operation.
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  Except you're still trying to run cows.
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  You are still a ranch and you are already working 60 to 70
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  hours a week. This is where most
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  diversification goes wrong. You didn't add income, you added
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  pure chaos to your life and everyone around you.
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  If a new venture steals focus from the cow herd, it is not
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  diversification, it is a liability.
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  Here's the simple rule. If a new income stream doesn't
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  strengthen your core cattle business, or at least stay
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  completely out of its way, it is not the right move.
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  Good diversification should fit your land, fit your labor, fit
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  your skills, fit your calendar, and actually yield profit
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  without eating up mental bandwidth.
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  If it drains your time, pulls you off cattle, or forces you to
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  hire more labor, it might not pencil out.
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  So let's talk about the diversification strategies that
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  tend to work because they actually integrate naturally
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  with the cattle operation that you're actually running, Taking
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  into consideration that every single operation is different
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  and something that works for a rancher here in Kansas might not
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  work for a rancher in Florida. So take that into consideration
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  when we are talking about all of these that they are not going to
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  work for every single operation. Number one, you've got hunting
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  leases and recreational access. The pros here, it's passive,
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  very low labor, and extremely seasonal cons.
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  You got a lot of liability, gait management, and a lot of
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  expectations to set. And then you've also got to take
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  into consideration, are they going to be hunting on pastures
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  that you have cattle on? If so, probably not going to
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  work for you in your operation. Now, this is really ideal if
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  your ranch has wildlife cover or terrain that hunters value.
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  Option 2, you've got custom grazing.
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  The pros of this uses grass that you already have and there's low
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  overhead. The cons Cash flow depends on
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  grass management and water availability for that year.
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  It fits ranches with strong forage and good fixing.
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  And producers who are good with logistics but have a year of
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  drought might not be the best thing for you this year.
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  Option #3 And this is a hot one right now, direct to consumer
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  beef. The pros, you've got really high
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  margin potential and you've got brand building cons you have to
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  market. You've got storage, food safety
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  time, and I could keep on going. This works best if you're
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  already active online or near a population center.
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  It is not a savior for everyone, but an extremely powerful tool
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  for the right personality option #4 you've got backgrounding or
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  retained ownership. Pros of this got increased value
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  of calves and it spreads overhead over time.
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  The cons nutrition and risk management required.
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  This one works well for ranchers who already have feed pens or
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  strong stockmanship ability to keep these cattle for longer.
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  And finally #5 you've got pasture leasing, grazing
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  agreements, or hay leases. The pros of this low labor and
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  stable income cons. You are completely dependent on
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  rainfall for that year. If cows aren't the best use of
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  your acres in a given year, leasing ground can actually
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  increase net income. Now this is probably not
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  something you are going to be doing year over year unless your
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  operation can handle it, but definitely a great option for
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  people that can. Now let's talk about the big
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  energy sinks. Number one, this is probably a
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  hot take, but tourism and events is awesome in theory, very
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  expensive in practice. You are suddenly overnight
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  agreeing to be in the hospitality business and
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  frankly, that's not ranching and not what most of us are used to.
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  Most ranchers underestimate the time, marketing and the
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  liability involved #2 you've got over expanding into farming.
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  Unless you already have equipment and expertise, farming
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  to add income usually becomes a money pit #3 you've got any
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  venture that requires heavy labor when cattle needs you the
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  most. This is kind of my umbrella one.
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  If your side revenue peaks during calving, shipping,
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  branding, hanging, it is going to cause tension or failure.
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  Timing matters way more than profit potential.
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  At the end of the day, we are ranchers and you can't diversify
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  if you don't know where your time is going.
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  Most ranchers are time poor and don't realize it.
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  I encourage everyone to take one week and write down every single
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  thing that you are doing at every single point in the day.
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  Your eyes will get opened up. I've done this in my personal
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  business multiple times to see where my day is actually spent
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  because I plan out my days. I've got my meetings, I've got
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  my time blocks, but then at the end of the day, I sit down and I
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  reflect of, OK, what did I actually do from 10:00 to 11:11
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  to noon, noon to 11 to 1:30. What were all of those hours
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  spent doing? How many hours did you spend
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  feeding, checking waters, moving cattle, fixing fence, hauling
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  hay, running errands, doing paperwork?
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  If you barely have room for a full night's sleep, and yes I'm
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  talking 8 hours, you do not have room for a new business that
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  requires daily attention. Diversification only works when
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  it fits into your leftover time, not your prime time.
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  And this is a diversification discussion for a single rancher.
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  Maybe you and your spouse have an operation and this is
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  something you're adding to your plate, not a diversification
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  discussion of hey, my son is coming home from college and
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  they want to start this side venture.
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  Like that is a completely different discussion because
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  that is someone else's time that is going to be focused on this.
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  So take that into consideration as well.
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  Before you add anything, you need to be running the math.
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  What is the upfront cost? What's the annual cost?
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  How many hours per week am I going to spend on this?
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  What is the realistic revenue? Is this revenue seasonal or
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  stable? And what does this venture take
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  away from the cattle operation? If the numbers don't work on
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  paper, they definitely won't work in real life.
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  The best diversification is honestly almost boring.
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  It's when you take something you already do naturally and you
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  monetize the next layer of it. If you're already telling your
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  ranch story online, maybe selling beef direct is your next
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  move. If you already harvest hay
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  efficiently and have some leftover, maybe hay sales is
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  your next thing. Lean in to the strengths you
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  already have established, not trends.
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  And that might be a little boring sometimes.
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  So here's the truth about diversification.
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  It is not about adding more things.
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  It is about adding the right things, the ones that fit your
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  land, your labor, your calendar, and your strengths without
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  pulling you away from your core business.
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  If a venture adds income without adding an insane amount of
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  chaos, that's true diversification and sustainable
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  diversification. If it adds that insane amount of
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  chaos without adding any profit, that's a distraction.
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  No the difference. And build your ranch around the
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  opportunities that fit your reality, not someone else's
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  highlight reel. This is the cattle USA daily
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  podcast. I'm your host Lauren Moylan.
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  Thanks for listening to another episode.
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  I appreciate you all being here and we will see you next time.
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  Have a good one y'all.