Making Long Term Decisions with Today's Profits

As anyone in the ranching business knows, cattle prices have never been higher. What are you doing with your record profits? Colorado State University Ag Professor of Commodity Markets and Price Analysis Dr. Stephen Koontz says to be looking for long-term ways of using your profits — rather than perhaps a new pickup.
Koontz: “The main advice for cattle producers I think is not worry about the tax side. Do some talking to your accountant about setting up something that looks like a 401K. You take your taxable income and you pull a piece out to reduce your taxable income. Tax defer that into some sort of an investment that is NOT more cows, more land, more equipment.”
Consider thinking long-term about your ranch’s next generation. Koontz continues
Koontz: “Also since you have money to spend, really take a look at all those kids that might want to come home. Figure out which one you can start gifting the place to. Loan them some money on favorable terms where they will pay you back but they don’t have to buy the place from you.”
As with any price cycle, he cautions the record high prices will not last forever. With all the protein sector experiencing strong prices and lower feed costs, increased production will drag beef prices down in the future.
Koontz: “Times, for beef producers in particular, times right are as good as they are going to get. I can see them getting better, but not as likely as things softening.”