A Few Thoughts by John Nalivka: The regulator burden is adding costs at a rapid fire pace
Assessing your costs to produce beef on your operation is important to your success. Most ranchers know and understand the costs that are directly related to your business, i.e. fuel, feed, and labor. However, regulations that affect agriculture and your cattle operation are increasingly creating additional costs. Many if not most of these rules and regulations concern the environment and are administered by the Environmental Protection Agency and include Air Quality, Water Quality, and energy – the Clean Power Plan. Others concern labor law, worker safety, food safety, and the list goes on and on.
These new rules affect all of agriculture and they are affecting your ranching operation. Some costs of production tend to stand out and you may focus on those. Fuel is one that is often on the front burner and understandably so. I often hear the comment, “you can’t make money with the price of diesel where it’s at today.” That comment isn’t too surprising considering how often a rancher is standing by a diesel or gas tank filling either a pickup or a piece of equipment. There are several direct costs that may be right on the front burner with the price of fuel. If you were buying hay in 2012 and 2013, those prices also stuck in your mind with regard to your bottom line.
As crude oil and feed prices fell over the past 18 months, costs of cow-calf production also declined. However, both the direct and indirect costs associated with increased regulations have increased. Many ranchers have already felt these increased costs. Managing the costs associated with regulations has become increasingly frustrating. So, while costs of compliance or regulatory takings mount, the ability to manage the associated costs becomes more difficult. Unfortunately, the regulatory bureaucracy seems to get only more onerous.
The mind-boggling number of laws and regulations stacked on the already burdensome regulatory environment will become overwhelming. It’s is important to know your costs of raising cattle and producing beef as you plan and manage your operation. It is just as important to understand the cost impact of this growing regulatory burden.
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