Cattle ranching has roots in New Mexico dating back to the 1500s when the Spanish explorers began settling in the region. They found cattle ranching to be a good fit for the mild climate and wide open stretches of pastureland. By the 1850s ranching played a central role in the Western region’s economy. Although slowed by the Civil War, the industry gained traction through the increased use of the railroads delivering cattle to distant markets.
With more and more innovations following, cattle ranching took hold and the market remains enormous to date. According to figures from the US Department of Agriculture, cattle sales represented about 17% of the $391 billion in total cash receipts for agricultural commodities in 2021.
“Cattle production is the most important agricultural industry in the United States, consistently accounting for the largest share of total cash receipts for agricultural commodities.” USDA
In addition to having the world's largest cattle industry, the United States is also the world's largest consumer of beef—primarily high-value, grain-fed beef. The U.S. beef cattle industry is often divided into two production sectors: cow-calf producers and cattle feeding.
The rewards are far-reaching
Those who ranch the lands are a vital part of keeping the time-honored Western tradition alive – which also supports an impressive amount of “direct and indirect” jobs, and the labor income that goes with it. It’s also worth noting that the widespread grazing practice throughout the NM industry can have a positive impact on the land and the wildlife on it.
Considerations in the current industry
While the figures suggest that a cattle ranch investment presents an opportunity to play a part in a pillar of the western economy and bring in good revenue at the same time, there are some shifts in the industry that can cut into the bottom line.
Beef continues to fetch record prices, yet consolidation in the meatpacking industry and increased costs to raise cattle are considerations for the small rancher. Some states and ranchers are finding their own avenues, such as creating their own packing houses or selling through local/regional avenues, which can fetch top dollar. Demand is continuing to increase for local foods, which can also help keep transportation costs down.
5 (More) Reasons to own a cattle ranch in New Mexico
1/ The top reason is… Having a passion for it.
Even if you’re doing it part time or overseeing operations remotely, a large part of the rewards are simply about living the ranch dream and enjoying the various aspects of the work.
The different roles the modern day rancher assumes include, being your own boss and an entrepreneur, acting as a steward of the land and a caretaker for the animals and wildlife on it. It also helps to love putting on your cowboy hat and getting your hands dirty in the day-to-day operations.
2/ There’s an ever-increasing demand for locally-raised agricultural commodities.
Along with the increasing demand for locally raised products, global awareness is encouraging everyone to reduce carbon emissions, buy local, and ship local. This is affecting the cattle market as well.
3/ The region’s dry, mild environment is ideal for raising cattle.
The pastureland grasses have a long growing and grazing season and tend to be nutrient dense, so it makes sense to use local resources. The long grazing season also helps keep operating costs down while producing quality cattle.
4/ There is a declining ratio of farmers to food consumers, which means there is a need for more farmers, and/or for increased production.
It’s estimated that 1/3 of US farmers and ranchers are close to retirement age and there is a need for farmers from a younger generation.
5/ For the far-reaching investment minded landowner, this is still a sound place to park your money.
Productive agricultural land provides steady appreciation paired with low volatility, making it a solid investment in an inflationary environment.
Plus, the financial security that comes with land investing also brings with it a sense of familial and lifestyle security. Having something rock solid in uncertain times, and for the unforeseeable years to come is becoming one of the key reasons ranch real estate has had banner sales years recently.
There’s no denying that investing in a cattle operation requires considerable research, but at the same time, it presents a wide-open opportunity for entrepreneurism.
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