Land Ownership Not Always The Best Strategy
Tim Hammerich
News Reporter
Production agriculture is an asset-heavy and low-margin business. While most farmers and ranchers strive to buy as much land as they can, it might sometimes make more business sense to rent. For Dr. Kee Jim, he built his cattle feeding business through focusing on investing in cattle instead of property, and the strategy paid off.
Jim… “So my model was distinctly different than many of my customers and other people, because they wanted to own the feedlot, own the farmland. And I'm thinking, man, what's wrong with owning the cattle? Like there's massive returns into that and the returns into the farming and the actual feedlot thing wasn't nearly as good. And in fact, the farming was horrible for many years. So I avoided some of the things that, you know, as producers, right, we typically like to own our facilities and own our land. And I was glad everyone else had that thinking because it allowed me on the custom side, just to go full bore as the industry matured over time, then you don't have those massive returns. And so you had to get involved in cattle ownership to make the whole thing work properly, right? And I still maintain you don't need to own the farmland. You know, others would disagree on that and say over a long period of time, it's okay. And that is true, right? Over a very long period of time, like a lifetime.”
Jim has since invested in some feedlots over the years as market conditions and economics allow.
