By Dr. Andrew Griffith
Is this the right time to get in the cattle business or grow the cattle business considerably? This seems as if it is just the opposite question as what was discussed in last week’s column, but this question was asked twice in the past week.
The first thought is that buying into a business that is at the top or near the top is not typically the best decision. However, that is not always the sole determining factor as other opportunities may present themselves due to that simple decisions.
For instance, there may be neighbors looking to sell their herds and want someone to rent their ground. Sometimes a person has to take advantage of the longer-term opportunity of renting the neighbors ground and that may mean purchasing some cows at the top of the market. There are other similar instances, but a person still needs to put pencil to paper. In these special circumstances, it often takes long-term planning and budgeting to determine if this is a good decision. Thus, buying in when the market is high could still be a favorable decision for some market participants.
Source : osu.edu