North America wide the commercial ranches are getting bigger, so there are fewer ranches but the individual units are bigger, leaving the cattle numbers about the same as they have been recently.
The cost of production is much higher which means that to cover the cost of overhead an operator has to have more cattle than before.
Recent high prices may be just an anomaly until the U.S. herd is rebuilt after years of drought and low prices.
Recent examples here in the Cariboo are the expansion of the Blue Goose Cattle Company, now several local ranches in addition to their original 70 Mile/Clinton holdings.
Market opportunities for organic, grassfed and “natural” beef have driven this as well as the long-term security of investors by buying land.
One author, Alan Nation, who has written Knowledge Rich Ranching, says that the return investment on ranches over many decades in the U.S. has been five per cent.
Of course much of the return is only realized when places sell!
Just recently it has become known that Riske Creek Ranches has sold to Douglas Lake Cattle Company, which also has expanded by acquiring ranches at Dog Creek and Alkali Lake.
Now one large American Corporation owns a large area of some of the best natural grassland in B.C.
They must see the value in farmland ownership and must be committed to stewarding the grasslands dwell because that is the key to successful, sustainable ranching enterprises.
Nowadays many foreign entities, governments and corporations, are buying farmland the world over because they can produce food cheaper potentially in other countries.
I think they are buying the water that they don’t have.
It takes something like six tons of water to grow one ton of grain.
You might call it speculation driven by higher food prices and demand from a burgeoning world population.
There is a smaller version of consolidation where a family ranch business buys land when cattle prices are good.
This is happening as well, making the ranches more viable because there are more units of production over which to spread the overhead costs.
There are other ways to be profitable, but that is for a later column.
David Zirnhelt is a member of the Cariboo Cattlemen’s Association and chair of the advisory committee for the Applied Sustainable Ranching program which is starting at Thompson Rivers University in Williams Lake this January.
