14 Nebraska Cattleman November 2023 What Will You Do With Profits? By Aaron Berger, Beef Systems Extension Educator, University of Nebraska-Lincoln Cow-calf producers are looking at the potential for significant profits in 2023 due to higher cattle prices. Across the board, calf, yearling and weigh-up cow prices are higher than we’ve seen since 2014 and 2015. These prices may provide profits for cow-calf producers and the rare opportunity to reinvest capital back into the ranch. Consider these options when thinking about where to invest in the ranch or cow-calf enterprise. • Visit with your banker and tax accountant about your current financial position and how to manage income and investments to address tax liability for 2023 and anticipated profits in 2024 and 2025. • Think carefully before buying new equipment to reduce the tax implications of your income. Long-term profitability for the cow herd means minimizing overhead costs associated with depreciation, interest, repairs, taxes and insurance that come with owning equipment. Instead, consider investments that will help to reduce overhead expenses. If it isn’t a good business investment, it isn’t a good tax management strategy either. • Celebrate and reward the people who have invested and sacrificed to make your business successful! Show some appreciation for the blood, sweat, tears and stress that family and employees have given. • Invest in others and yourself. Is there a class, educational experience or tools that would help people be more knowledgeable and effective? Take a trip to see other operators who are doing something you are considering or would like to learn more about. Great leaders and managers are lifelong learners. The greatest educational gains are usually at the edge of your comfort zone. • Look at your management information system. Does your current recordkeeping and accounting system provide what you need to make effective decisions? If it doesn’t, investing in tools, training or hiring help could be beneficial. • Hire an attorney to review and evaluate your current estate plan. If you have been putting off developing an estate plan, this may be the time to complete one. An investment here can have financial and relational benefits for generations to come. • Consider ways to improve livestock water and monitoring systems. Water is frequently the first limiting factor for grazing management systems. A dependable water supply is critical for good grazing management. Technology has made remote water-monitoring systems effective and affordable, potentially saving time and labor. • Evaluate emergency power sources for wells and homes on the ranch. Incorporating a backup generator into the electrical grid for the ranch could be valuable for maintaining ranch operations and delivering water to livestock when the power is out for an extended period. • Contemplate how additional permanent and temporary electric fence CONTINUED ON PAGE 16
RkJQdWJsaXNoZXIy NTMxNTA5