I decided to add this page to the website because many producers or people who want to become producers ask me how to start with Wagyu. I like talking about the Wagyu breed with other people, but it gets old after a while, so I thought I’d try to write down some of my ideas and beliefs in a place that would be easy to find.
As with everything on the Internet, you should take all this information with a grain of salt. It’s based on my thoughts and experiences, which are obviously biased and might be out of date or not relevant to you where you live.
Ill be working on this section for awhile, so if it looks incomplete, that is the reason!
If I do this part right, you can read it all the way through or go through a list of questions I usually ask people who want to become producers. The first one being â¦.
Wagyu beef has become synonymous with luxury and indulgence in the culinary world. With its beautiful marbling, tender texture, and rich flavor, it’s no wonder why Wagyu commands astronomical prices both in restaurants and grocery stores.
As demand for this premium beef continues to grow globally, more producers are exploring Wagyu cattle ranching as a potentially lucrative business venture But one big question looms – is raising Wagyu beef actually profitable?
To determine if Wagyu cattle ranching can be a rewarding investment, we need to break down the costs, effort, and profit potential involved.
Understanding The Wagyu Breed
Wagyu cattle originate from Japan and are renowned for their unique genetic profile. Their genes promote exceptionally high marbling and fat content, resulting in the signature melt-in-your-mouth texture that Wagyu is so prized for
There are four major strains of Wagyu – Japanese Black, Japanese Brown, Japanese Polled, and Japanese Shorthorn But the Japanese Black, known as Kobe beef in the Hyogo prefecture, is the most coveted worldwide for its rich marbling
Top Wagyu bloodlines can cost $20,000-30,000 per animal, up to 10 times more than American Angus cattle. So quality genetics are a significant investment.
Startup Costs Are Steep
For newcomers looking to dive into Wagyu production, the initial startup costs present a high barrier to entry.
Land, housing facilities, breeding stock, livestock management tools, and processing infrastructure require major capital. For a small ranch with 50 cattle, startup costs often exceed $500,000. Larger operations easily demand investments in the millions.
And that’s not even counting ongoing expenses like animal feed, veterinary care, and labor.
However, for ranchers already set up for cattle production, transitioning part of their herd to Wagyu may have lower startup costs.
Feed And Care Must Be Specialized
Wagyu cattle require specialized care and diet to promote healthy marbling. Low-stress environments, temperature regulation, and reduced space per animal are essential for optimizing marbling.
Feed must include high-quality forage and a calorically dense grain finish. Typical feed costs range from $5-10 per cow daily. While pricier than conventional cattle feed, it drives rapid weight gain and fat development in the Wagyu.
Meticulous animal husbandry and preventative healthcare minimize losses to disease and injury, protecting the hefty investment in each animal.
The Long Journey To Market-Ready Beef
Patience is critical in the Wagyu cattle business. These animals take longer to reach slaughter weights compared to conventional breeds.
On average, Wagyu steers take 28-32 months to reach 1,200-1,400 pounds. Heifers may take 30-36 months. By comparison, Angus cattle finish in 18-24 months.
The extended feeding time and specialized care mean ranchers must wait years for a return on their initial Wagyu investments. But once established, the consistent production cycle and calf crops deliver ongoing revenue.
Demand And Prices Keep Climbing
The global appetite for richly marbled Wagyu beef continues to grow, especially among affluent consumers. This fuels rising demand and premium prices.
In the US, premium Wagyu cuts like ribeye and striploin can fetch over $100 per pound at retail. Even lower grades sell for $20-30 per pound.
Exports to Asia and the Middle East regularly break price records at auction. And fine dining restaurants feature Wagyu on menus as the ultimate indulgence.
As more consumers get a taste for Wagyu’s quality, the market outlook remains positive. This makes Wagyu an attractive long-term investment for producers riding the wave of demand.
Large Operations Reap Economies Of Scale
For large operations with hundreds or thousands of head, economies of scale make Wagyu production more profitable.
Buying feed and breeding stock in bulk lowers costs. Large processing facilities and relationships with premium buyers allow maximizing margins. And diversified income from calves, grass-fed animals, and dairy helps manage revenue fluctuations.
Small ranches under 50 head face challenges scaling up. But partnering with cooperatives or processors helps pool resources and reach high-value markets.
Premium Beef Demands Premium Prices
A key factor determining profitability is the target market. Selling to commodity beef buyers yields disappointment.
But accessing consumers and chefs seeking the finest marbled beef allows producers to realize Wagyu’s full profit potential.
Top-shelf restaurants, luxury hotels, high-end butchers and grocers, and direct-to-consumer sales offer the best margins. Exports to Asia and the Middle East are especially lucrative.
Niche markets like steak flights, meat subscriptions, and special events let producers capture premium value for their premium Wagyu.
The Verdict: Potential For Healthy Profits
While costly to establish and time-intensive to produce, Wagyu beef offers the prospect of very attractive profits in the right circumstances.
For producers able to leverage high-quality genetics, efficient operations, consistent production, and premium markets, Wagyu cattle ranching can produce substantial returns over time.
But smaller operators face limitations scaling up and accessing top-dollar buyers. And fluctuations in feed costs and cattle prices add financial risks to navigate.
Ultimately, raising Wagyu is a long game requiring vision, commitment, and patience. Done well, those who invest today in the “Waygu of Beef” stand to reap tomorrow’s rewards.
How would you describe your cattle herd today? And what do you expect to gain by introducing Wagyu?
Some typical answers:
- Theoretical. That is, I don’t own any cows. But if I do get one, it should be the best!
- I have a registered herd of SuchAnSuch breeds and want to add to (or replace) them.
- There is a commercial herd that I want to improve or replace.
Evaluating your existing program and settling on goals leads to a discussion on getting started. Keeping your business model in mind, you have to consider:
What kind of Wagyu calves do you want to produce?
Just one word here before we look at some choices. Don’t try to pass off what you make as something else; be proud of what you make. If you are raising F1s, don’t hide the fact that they are F1s by calling them “Wagyu” as if they were Fullblood. Have faith in the quality of your product and be clear about what it is.
You will need to think about how to sire your calves no matter what kind you want to make. Head here for some Sire Thoughts.
I know this business model best because it’s what got me interested in Wagyu in the first place. It is called “Custom Beef” if you are going to raise a Wagyu calf from birth until it is killed and then give or sell the beef to someone else.
Since you are not selling the finished product (i. e. steaks, hamburger, roasts) directly, this is a pretty straightforward business model to transact. They agree on a price, and then you take the live animal to the butcher shop they want. You get paid when the customer picks up the beef, and they work directly with the butcher shop to decide how it should be processed, packaged, and made ready for pick up. If the customer buys the whole animal, both sides, this is very easy. It’s also pretty easy if two different people each take one side, since butcher shops cut them in half to hang and age them anyway. With two people involved, you just need them to agree on the butcher shop. It gets harder if you sell quarters and a lot harder if you sell eights because you have to get everyone to agree on all the little decisions that need to be made during processing (like how thick the steaks should be, what cuts to use, etc.). ) AND how to work together to split it up at delivery.
Custom Beef (at least in Alabama) can be processed at any butcher shop. It doesnt need a USDA or State inspection stamped label on each cut of beef produced. This is because the butcher shop is “custom processing” the beef for the person who will be eating it, not for you, and especially not to sell again. (In Alabama, all steaks, burgers, and other foods will have the words “Not For Resale” written on the packages.) ).
When you decide that someone other than the final customer (you or a distributor) will pick up the beef and sell it later, like at a farmers market, to a grocery store, or to a restaurant, you are now in the realm of
The USDA and State Ag people I’ve talked to about this use the phrase “entering into commerce,” so I’ll use that too.
A State Inspection Stamp (as long as it doesn’t cross a state line) or a USDA Inspection Stamp must be on any beef product that is sold in stores or at a farmers market. That only means the animal has to be killed and processed at a place that can put the stamp on the label. From the point of view of the beef producer, this doesn’t add any extra work, and as long as the processor is close by, it usually doesn’t cost more to process. In Alabama, the hard part is finding one because most shops don’t bother because they can stay as busy as they want without having to deal with daily inspections.
Once your beef has the right stamps; you must then worry about transport. It is your job to make sure you follow any rules set by the USDA or your state’s health department and can prove that the product has been kept at the right temperature all the time. You are responsible for it from the moment you pick it up until you sell it to someone else. How you document your procedures, what is even required in your area, etc. – this is something you need to check into and get comfortable with before you go this route.
In our operation, we have done the research on what we need to do to make this work. I can tell you that it is a lot more complicated than Custom Beef, but is manageable.
If you don’t want to, can’t, or have the time to care for a calf from birth until it is killed, you need to choose a way out while the calf is still alive and can be moved.
You should sell your calves to a company that specializes in finishing Wagyu beef and knows what they’re getting. Is that possible? The American Wagyu Association keeps a list of such companies. I have never gone this route, but have heard from people that have that you can expect a decent premium over the current price being paid for #1 grade calves at your local auction. This path is good because you get paid when the calves leave your farm, and afterwards, someone else takes care of them. The hard part about this plan is finding enough calves that are alike to make it worth the trouble of shipping them.
Another route that might be worth considering is Retained Ownership. In this arrangement, you keep ownership of the animal until it is slaughtered. You basically put an agreement in place with a feedyard that does the work of feeding and finishing until they are ready for slaughter. (Many feedlots out there cater to this scheme which can be applied to any breed of cattle.) At slaughter, you are paid based on the grade and weight of the carcass. With Wagyu, you expect that the carcass will bring top dollar, but then again, if you dont like the price they come up with, its kind of hard to argue at that point. In this scheme, you also keep a portion of the risk (via ownership) for a longer period and cash flow can be an issue since you pay feed and yardage costs from the time your cattle arrive until they are processed. Gathering up enough calves to make shipping worthwhile could also be an issue. We sent our first load of Wagyu influence calves to A to Z Feeders in Atlantic, Iowa in 2019 and can report that this has been a viable business model that we plan to continue to use heavily. It helps to have a high quailty operation and trusted partner such as A to Z to work with.
Since there are so many people interested in Wagyu cattle, someone should be willing to give new farmers seedstock. This includes taking care of herd bulls and heifers for breeding, gathering and selling sperm for artificial insemination, and making embryos to transfer. While we don’t really know much about this business, we do sometimes sell cattle that meet these requirements. Ive also sold embryos, and we are now offering semen on our top-quality herd bull. As someone who has bought from seedstock providers, I can tell you that if you want to be successful, you need to keep good records and have a lot of data to help your genetics stand out. It might be hard to break into this market because it takes time to become well-known and earn a good reputation.
Seedstock is often sold through auction (watch the American Wagyu Association web site and e-mails for notice) or through private treaty. There is also a Wagyu Exchange website that sees a lot of activity.
Japanese Wagyu Beef Raised by Ranger Cattle
FAQ
Can you make money raising Wagyu cattle?
Can you raise Wagyu cattle in the US?
How much does it cost to raise Wagyu beef?
Is Wagyu profitable?
How is Wagyu beef raised?
It all comes down to how it is raised. Raising cattle to produce wagyu beef is the most meticulous form. Japanese farmers honed their techniques to ensure cows develop evenly marbled fat deposits to ensure they don’t build tense, tough meat. For the cattle, this means a lot of pampering that could be a dream come true.
How much do Wagyu cattle cost?
Purebred, pedigreed Wagyu breeding stock typically costs around three thousand dollars a head. Registered Angus cattle typically cost around two thousand dollars a head. If you are currently raising Angus cattle or any other type of cattle, or you are thinking of taking up cattle raising, you may wish to consider raising Wagyu cattle.
Why is Wagyu beef so good?
Breeding and genetics play a significant role in the quality and flavor of wagyu beef. Breeding programs are designed to produce cattle with high marbling, resulting in richer and more flavorful meat. Additionally, careful selection and breeding can result in other desirable traits, such as tenderness, color, and texture.
Why do Wagyu cattle eat more protein?
Younger cattle may require more protein and energy to support growth and development, while older cattle may benefit from a diet that is higher in fiber. Forage plays a vital role in Wagyu cattle’s diet, and it directly impacts the quality of the beef they produce.