While more traditional avenues remain for those wanting to get into the livestock business, the COVID-19 pandemic may be opening up different opportunities.
Richard Ritter, senior vice-president of ag lending at Flanagan State Bank in Flanagan, Illinois, says contract hog finishing is still a viable option. Starting a small cattle herd remains a great option for those with available pasture space.
And Ritter says when the pandemic began in March, some consumers found it difficult to purchase meat as plant shutdowns slowed the processing chain. Many, he says, started looking for meat closer to home.
This opened up opportunities for livestock producers to sell directly off the farm if they could find locker space. Ritter says he believes many of these consumers have altered their buying habits and will look for more locally processed food like beef and pork.
“With COVID, I think more of them are going to want to buy locally, and if that’s something you can do, that’s a niche you can get into fairly inexpensively,” he says. “There will be markets for natural meat products, hormone-free, non-GMO. Look into doing things differently than everyone else.”
Ritter says in much of the Midwest, livestock facilities are available to rent. He says a new hog building is going to likely require a down payment, as well as a manure easement.
“The livestock industry is very important to the grain industry, and there will be farmers wanting to use the manure from those operations if the producer cannot,” he says.
Custom feeding cattle is also a good option for those looking to get started raising livestock, Ritter says. He also suggests finding a mentor to help new producers get off on the right foot.
“We see a lot of opportunities in the livestock industry, but you have to do your homework and make sure it’s the right thing for you,” Ritter says.
Financial options will determine the right path for new producers, says Kelvin Leibold, Extension farm management specialist with Iowa State University.
For example, he says as the cost of finishing barns continues to rise, cash flow in the early years of the contract will not be as good as it may have been 10 to 15 years ago.
“It’s a very expensive way to get started,” Leibold says.
He also says those who can sell hogs or cattle directly to consumers do have an opportunity to make some money.
“The lockers are very popular, and we will see that continue with the pandemic,” Leibold says.
He says those wishing to get started raising livestock could also partner with an established farmer, which will help reduce start-up costs in addition to providing a mentor.