From Corn to Cattle: Farmers Pivot to Create Profit

Some row-crop growers are converting acres, banking on long-term opportunities with beef. Others are staying the course with crops but embracing ways to add some dollars to their bottom line in the short-term.

The Hadrick Family raises a glass for a heartfelt toast, giving thanks for their cattle and the grasslands that sustain them.

With commodity prices under pressure and input costs on the rise, many row-crop farmers are evaluating their options and looking for new revenue opportunities in the process.

For Troy and Stacy Hadrick, that required making a bold shift in their farming operation about four years ago. They started converting much of their South Dakota cropland to pasture and expanding their cowherd.

It’s a path no one would describe as easy. But as Troy puts it, “You’re going to do something hard if you’re in agriculture, so choose your hard.”

The Hadricks, based near Faulkton, South Dakota, say moving away from commodity corn, soybeans and wheat to a more direct, value-added beef production model is giving them more control over their product and their bottom line.

“We want to take ourselves out of the ebbs and flows of the commodity market, and we believe our beef business is viable long-term,” says Troy.

The Hadricks’ business includes selling beef direct to nine restaurants, a caterer, grocery store and even to a gas station that sells high-end meat. Learn more at hadrickranch.com/

Farmers Put Marginal Crop Ground Into Grass
As the Hadricks tried to decide whether to focus more on their beef business, and less on commodity grains, two things encouraged them to move forward with cattle: the marketplace and some of their land that’s prone to erosion.

“We started thinking about what could we do on some of this crop ground to be better stewards of that land – to think about it in a different purpose,” Troy recalls.

When the Hadricks learned about a Ducks Unlimited (DU) program that fit with their goals, they signed on to convert an additional 250 acres of cropland to pasture to feed cattle. “They help cover the cost of that land while it’s sitting idle for a couple years, allowing the grass to establish,” Troy notes.

Bruce Toay, manager of DU conservation programs in South Dakota, says the organization is working with 58 farmers across the state as part of its Working Grasslands Partnership.

DU provides annual payments to farmers for the first three years of their participation in the program, based on local CRP rates. After establishment, cooperators are able to utilize the forage by haying or grazing for the remainder of the 10-year commitment.

Payment rates reflect the land quality: in southeast South Dakota, where soils are more productive, rates can be $200 or more per acre. In the northwest part of the state, rates are usually $20 to $30 per acre.

“We can help install pipelines and tanks, and sometimes drill wells—whatever it takes to ensure a reliable water source,” Toay adds. “You can’t have a good grazing plan without water.”

Currently, South Dakota farmers have enrolled 12,000 acres with DU, which aims to expand the program to 25,000 acres. The program goes through 2029.

“We’re really pushing to find more interested cooperators and get more acres back into grass,” says Toay.

Beyond DU, other organizations investing in habitat restoration in regions of the U.S. include Pheasants Forever and Quail Forever.

More Short-Term Opportunities Wanted
While the Hadricks are finding success in a long-term strategy of moving to beef production, most U.S. farmers are exploring short-term revenue streams rather than a permanent exit from row crops.

Jay Parsons, an agricultural economist at the University of Nebraska–Lincoln, says that for most farmers, converting cropland to permanent pasture rarely pencils out—unless the goal is to leave row-crop farming altogether and sell off equipment. “Otherwise, it makes a lot more sense to go with annual forages, because it’s easier to switch back to crops when markets change,” he notes.

In some scenarios, farmers rent their ground in the fall for cattle to come in and graze cornstalks, adds Mary Drewnoski, UNL professor and beef systems Extension specialist. Another common practice is to charge beef producers a fee to graze cattle on cover crops. “That’s probably the simplest thing for a farmer to do – have somebody else come in with cattle and graze the fields,” she says. “Basically, you give them access and get a paycheck.”

Grazing rates can vary significantly. Drewnoski says going rate in the eastern part of Nebraska is $10 to $15 an acre. In the western part of the state, farmers can charge in the neighborhood of $30 an acre.

“It’s a matter of supply and demand, and there’s more demand there,” Drewnoski explains.

She believes row-crop growers based in any area that also supports cattle production can likely find ways to add revenue from grazing cattle, either their own animals or through leasing ground to local beef producers.

The one thing she says is of utmost importance to do in the process is to develop a clear, written lease agreement spelling out the details that can keep everyone on the same page and relationships intact.

Key terms to define in a lease agreement include the rental rate, payment schedule, specific stocking rate, along with a clear outline of responsibilities for fencing, water, and general pasture maintenance. The agreement should also cover conditions for renewal or termination and any provisions for insurance.

When executed well, Drewnoski says partnerships between row-crop growers and livestock producers can be mutually rewarding. “There can be real beauty in this if you’re a crop farmer and you find the right cattleman to partner with,” she says. “It can open up doors for you both to benefit.”

EDITOR’S TAKE:

Some of you might recognize the Hadrick name. Troy and Stacy have been part of The Certified Ag Group family almost from the beginning. Troy has been an integral part of our team and is still active with our efforts. As the article points out, he and Stacy have also made some key strategic decisions regarding their ranch that have served them well. Critically analyzing their operation and focusing on direct-to-consumer sales has been a very significant move. However, Troy would be the first to tell you that it has involved a lot of hard work and long hours.

Be on the lookout for farmers and ranchers like Troy and Stacy Hadrick. They are smart, strategic thinkers and not afraid to take risks if they think the payoff is there. So how do you identify such customers – the first thing is to train yourself or your staff to ask potential customers, “are you a farmer or rancher”? If affirmative, let the conversation flow from there and be sure to mention the terrific tools provided by being a CAD member. Can’t remember them all – no problem. Simply go to the APP store and download the CAD app. That way it will be at your fingertips when you need it.