Cobbley Land and Livestock Business Plan
I. Industry Overview
A cow and calf operation is a method of raising beef cattle in which a permanent herd of cows is kept by a farmer or rancher to produce calves for later sale. Cow and calf operations are one of the key aspects of the beef industry in the united states.
Cow and calf operations are divided into two types. First are those that produce feeder cattle to be raised by other agricultural enterprises, such as feedlots. These sell their calves after they have been weaned and are under a year in age. The second are those that raise the calves for 1–2 years before selling them directly to a slaughterhouse.
Cow and calf operation businesses are a subset of the beef cattle farming industry and businesses in this industry include farms and ranches that raise cattle or feeding cattle to fatten and prepare them for consumption. The industry also includes cattle feedlot operations, which produce high-quality beef.
There is no single cow and calf operation company that has dominate market share in the industry hence smaller cow and calf operations can successfully make profits. Statistics show that in the United States alone, there are about 746,333 registered and licensed beef cattle farming businesses responsible for employing about 794,221 people and the industry rakes in a whopping sum of $69 billion annually. A 1997 census found that this sector of the U.S. beef market produced over $40.5 billion. 2022 estimates the beef market at over 65.9 billion. The industry is projected to enjoy 4.9 percent annual growth between 2019 and 2024.
One thing is certain about cow and calf operation businesses, there is a steady demand for beef. Not only are there billions of people eating beef, many industries make use of byproducts from cattle in manufacturing their products.
II Executive Summary
Cobbley Land and Livestock, LLC will be located outside Colorado Springs Colorado. After detailed market research and feasibility studies we now plan to secure 7,779 acres of an existing ranch to build our cattle operation. A conservative estimate shows production can be increased on the existing land by 40% by employing best market practices. Profitability margins will also increase. While increasing both production and profitability, modern practices will also improve and protect the land.
The goal for our cow and calf operation is to set the standard. We will be involved in commercial breeding of cows, steers, and heifers with 400 acres for feed production. We will also introduce solar farming, dedicating 300 acres to the production of solar power through partnership with a nearby energy company.
Our five-year plan includes implementing a Farm-to-Freezer operation which would involve exporting product both nationally and internationally.
Cobbley Land and Livestock, LLC is well positioned to become one of the leading cows and calf operation in Colorado. We have put process and strategies in place that will help us employ best practices as required by the regulating bodies in the United States of America.
We have chosen to be involved in the cow and calf operation business because we want to leverage on the vast opportunities available in the cattle farming industry, to contribute our quota in growing the U.S. economy, to produce food, supply needed raw materials for industry, to export agriculture produce from the United States to other countries, make a profit, and above all participate in a process that helps feed the world while preserving a way of life.
Cobbley Land and Livestock, LLC is a private cow and calf operation owned by Aaron Cobbley.
III. Products and Services
Cobbley Land and Livestock, LLC is a cow and calf operation that is committed to producing cow and calf for both the United States’ market and the global market. We are in this business to make profits and will ensure that all processes are within the framework of laws and regulations governing the industry in the state of Colorado and in the United States.
These are the areas of concentration for the proposed cow and calf operation. As needs arise, more related services may be added to the following;
· Breeding and raising cattle
· Sale of cattle (cows, steers, and heifers)
· Sale of processed meat (beef)
· Boarding services
· Breeding services
· Livestock farming related consultancy and advisory services
IV. Mission and Vision Statement
Our Vision is to become one of the leading cow and calf operations in Colorado and recognized and trusted throughout the United States of America.
Our mission is to maximize profits while enhancing the ranch and its resources while serving the community and standing as an ensign to all.
V. Job Roles and Responsibilities
Our Business Structure
Cobbley Land and Livestock is a single owner limited liability company. In the beginning stages, a single operator will handle all aspects of the ranch. With expansion, additional help may be hired to supply labor and expertise. Most needed specialty services will be contracted with local suppliers (i.e., veterinary services).
Owner:
Responsible for providing direction for the business:
· Create, communicate, and implement the organization’s vision, mission, and overall direction – i.e. lead the development and implementation of the overall organization’s strategy.
· Evaluate the success of the organization
· Plan, manage and coordinate all farm activities across the various sections on behalf of the organization
· Do ongoing risk assessment
· Oversee accounting, costing and sale of farm produce after harvest
· Ensure that farm goals are achieved, the most efficient resources (manpower, equipment, tools and feeds et al) are utilized and different interests involved are satisfied.
· Oversee the smooth running of cow and calf operations across the various farming sections.
· Prepare financial reports, budgets, and financial statements for the organization
· Create financial forecasts and risk analysis.
· Develop and manage financial systems and policies
· Ensure compliance with taxation and governing entity legislation
VI. SWOT Analysis
A good SWOT analysis can greatly reduce and even eliminate most of the trial and error that plague any business venture. Cobbley Land and Livestock, LLC would like to get it right from the onset. This will go a long way to create a foundation that will build a cow and calf operation that will favorably compete with leading operations in the United States of America.
The following is a summary from the result of the SWOT analysis that was conducted on behalf of Cobbley Land and Livestock, LLC by Three Cows Marketing out of North Carolina;
Strength:
Our strength as a cow and calf operation is the fact that we have healthy relationships with both cattle suppliers and buyers within the United States. We will purchase latest cattle rearing machines, tools and equipment that will help us breed our cattle in commercial quantities with less stress.
Weakness:
Our weakness is being a new cow and calf operation and that there may not be the required cash to pump into the publicity of our business. We are aware of this and from our projection will overcome this weakness with time and turn it to a major advantage for the business.
Opportunities:
Red meat prices dictate returns for American cattle ranches and feedlots. Increased prices generate an increase in returns per head for farmers. Consequently, higher returns generally encourage farmers to devote more resources to cattle production. The price of red meat is expected to rise in 2023, presenting the industry with a potential opportunity.
Threat:
Per capita beef consumption represents the total carcass weight of beef available for consumption per person in the United States. Industry sales are bolstered when more customers consume more beef. Per capita beef consumption is expected to fall in 2022, posing a potential threat to the industry.
VII. MARKET ANALYSIS
Market Trends
Even though commercial cattle rearing has been in existence since time immemorial, that does not in any way make the industry to be over saturated; commercial cattle farmers/cow and calf operations are exploring new technology to continue to improve the cattle rearing process. The fact that there is always a ready market for cattle makes the business ever green.
One of the new trends in the industry is that with the recent advancement in technology, livestock farmers can now improve the various breeds of the animals they are breeding. As a matter of fact, it is now easier for cow and calf operations to comfortably import the kind of cattle breeds they want, and advancement in technology has made it easier to crossbreed different cows.
VIII. Target Market
Those who are the end consumer of cow and calf operations, and those who benefit from the business value chain of the beef cattle farming industry is all encompassing; it is far–reaching. Almost every household consumes produce from livestock farms.
So also, a large chunk of manufacturing companies depends on cow and calf operations for some of their raw materials. A cow and calf operation owner should be able to sell his or her farm produce to as many people as possible.
We will ensure that we position our business to attract consumers of beef not just in the United States of America alone but also other parts of the world which is why we will be exporting some of our cow and calf to other countries of the world.
Our Competitive Advantage
It is easier to find entrepreneurs flocking towards an industry that is known to generate consistent income which is why there are more cattle ranches in the United States of America and of course in most parts of the world.
For example, a 1997 census found that this sector of the U.S. beef market produced over $40.5 billion. As of 2007 there were more than 765,000 cow–calf operators in the country, mostly concentrated in the Western and Southeastern U.S. states. These goes to show that there are appreciable numbers of cow and calf operators in the United States of America but that does not mean that there is stiffer competition in the industry.
As a matter of fact, entrepreneurs are encouraged by the government to embrace commercial farming/livestock farming because part of the success of any nation is her ability to cultivate her own food and export foods to other nations of the world.
Cobbley Land and Livestock, LLC is fully aware that there is competition when it comes to selling livestock all over the globe, which is why we decided to carry out thorough research so as to know how to take advantage of the available market in the United States.
We have done our homework and have been able to highlight some factors that will give us competitive advantage in the marketplace; some of the factors are effective and reliable cow and calf operation processes that can help us sell our produce at competitive prices, good network and excellent relationship management.
IX. SALES AND MARKETING STRATEGY
We are quite aware that the reason why some cow and calf operations hardly make good profits is their inability to sell off their cow and calf to a larger market. In view of that, we decided to partner with some of the leading abattoirs operators to help us maximize profits.
In summary, Cobbley Land and Livestock, LLC will adopt the following strategies in marketing our cow and calf;
Introduce our business by sending introductory letters alongside our brochure to abattoir operators and key stake holders in the agriculture industry in and around Colorado.
Advertise our business in Argo – allied and food related magazines and websites
Attend related agriculture and food expos, seminars, and business fairs et al
Leverage on the internet to promote our business
Engage in direct marketing
Encourage the use of Word of mouth marketing (referrals)
Sources of Income
Cobbley Land and Livestock, LLC is in the beef cattle farming industry for the purpose of maximizing profits hence we have decided to explore all the available opportunities within the industry to achieve our corporate goals and objectives. Below are the sources we intend exploring to generate income for Cobbley Land and Livestock, LLC;
Sale of Cattle (cows, bulls, steers and heifers)
Sale of processed meat (beef)
Boarding services
Livestock farming related consultancy and advisory services
300-acre solar farm
X. Sales Forecast
From the survey conducted, we know that the sales generated by a commercial livestock farm depend on the size of the ranch and the network of the business. We have been able to examine the beef cattle farming industry; we have analyzed our chances in the industry, and we have been able to come up with the following sales forecast.
Below are the projections that we were able to come up with for the first three years of running Cobbley Land and Livestock, LLC;
First Fiscal Year (FY1): $140,776.00
Second Fiscal Year (FY2): $160,390.00
Third Fiscal Year (FY3): $198,000.00
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown that can impact negatively on household spending, bad weather, and unfavorable government policies.
XI. Publicity and Advertising Strategy
Any business that wants to grow beyond the corner of the street or the city they are operating from must be ready utilize every available means to advertise their business. We intend growing our business which is why we have perfected plans to build our brand via every available means. Below are the platforms we want to leverage on to boost our cow and calf operation;
Place advertisements on both print (newspapers and magazines) and electronic media platforms
Sponsor relevant community-based events/programs
Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our business
Distribute fliers and handbills in target areas
List our farm in local directories/yellow pages
Advertise our commercial cattle ranch in our official website and employ strategies that will help us pull traffic to the site.
Ensure that all our staff members wear our branded shirts and all our vehicles and trucks are well branded with our company logo et al.
XII. Our Pricing Strategy
Sale prices of calves are subject to fluctuation as part of the cattle financial market. The relatively long period it takes a cow–calf operator to build up a beef herd and raise new calves to the desired weigh tends to extend the length of such a cycle.
A cow will cost between $2,000 and $5,000 a cow. The actual cost depends on the weight of the cow, the gender, and the breed. Yearlings usually sell for between $800 and $1,500. Cows will also differ in price based on whether they are dairy cows or beef cows.
We are quite aware that one of the easiest means of penetrating the market and acquiring loads of customers for all our cow and calf is to sell them at competitive prices.
One thing is certain, the cow and calf operation business makes it possible for farmers to place prices for their livestock based on their discretion without following the benchmark in the industry. The truth is that it is one of the means of avoiding running into loss. The easier you sell off your calf when they are mature the better for your business.
Payment Options
The payment policy adopted by Cobbley Land and Livestock, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Cobbley Land and Livestock, LLC will make available to her clients;
· Payment via bank transfer
· Payment via online bank transfer
· Payment via check
· Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our customers make payment for calf purchase without any stress on their part.
XIII. Startup Expenditure (Budget)
Below are some of the basic areas we will spend our startup capital in setting up our cow and calf operation;
$1,300 Insurance policies, permits and business license
$8,000,000 Amount needed to acquire / lease a farmland
$100,000 Construction costs for additional outbuildings, corrals, fences, pens, etc.
$150,000 Machinery/equipment cost
$150,000 Purchase of the first set of cattle (cows, bulls, steers, heifers)
$2,000 Media and branding
XIV. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all these factors are missing from a company, then it won’t be too long before the business closes shop.
One of our major goals of starting Cobbley Land and Livestock, LLC is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to sell our calf a little bit cheaper than what is obtainable in the market and we are prepared to survive on a lower profit margin for a while.
Cobbley Land and Livestock, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our organization’s corporate culture is designed to drive our business to greater heights and training and re–training of our workforce is at the top burner of our business strategy.
We know that if that is put in place, we will successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.