A great article from Walt Davis – Written in 1999.
There have been how-to books on lots of different subjects lately and I thought that it might be nice to help those people who get up every morning and wonder “what can I do today to lose money in the ranching business?” There is bound to be a huge demand for this kind of information since regardless of weather or markets, losing money is the main topic of conversation in every coffee shop in the country. The following is a collection of thoughts that should be of use in preventing any accidental out break of profitability.
Set your breeding season so that calves, lambs, kids, etc. are born well before the onset of new growth. This ensures that the young animals will be big enough to utilize the forage when it arrives and thus will wean off heavy. You will hear some nay-sayers blather about; the expense of maintaining lactating females without green forage, trouble getting females re-bred, disease and death loss in the young and even predictions that losses to predators will be worse since there are no young rats or rabbits around at this time of year. Some of this may be so but “we have got to have heavy weaning weights, right?”
Always stock your country with just a few more head than you think you can handle. If you get lucky and have a good year, you will have more to sell and you can’t carry that grass over to next year, can you? Besides the Fat Cow Feed Company has a new feed guaranteed to make stock do good on broom weeds and tree bark. No need to worry about how much grass you have, just book your feed early and read the trade magazines so you can keep up with the latest feed supplements and mineral programs. You may hear tales about people claiming to winter with no supplemental feed but you know darn well it can’t be done “here”. When you feed hay or other supplements, be sure to always feed in the same place so that you don’t stomp out all your pasture. By feeding in the same place, you can get rid of the wasted hay and built up manure in the spring by setting it on fire. You won’t have to worry about the fire getting away, there will not be any thing growing anywhere close to the feed ground. Just up hill from your stock pond is a good place for the feed ground so that the bare ground will cause more of the rain to run off and keep the pond full. Sure a little manure, urine and dirt gets in the water but the stock will still drink it.
Make all of your breeding decisions based upon “what the trade demands” rather on silly criteria such as the type cattle that performs well under your conditions or animals with traits that allow you to reduce inputs. After all who knows more about what is good for the industry, you or ConAgri? Along the same line, be sure to buy great-big, good old’ bulls that throw really heavy weaning calves. You may have to pull some calves and maybe even lose some cows and after a few years your cows may get pretty big and expensive to winter but even if they made four times as much money do you really want to have to tell people that your calves only weaned at 450 pounds?
Don’t get talked into this management intensive grazing stuff. Some people claim to be able to run more stock with better performance at less cost while improving their country but you don’t have time to do all that and besides “it won’t work here”. Stay away from these schools and seminars that claim to be able to teach you how to reduce your costs, increase production and improve both your country and your quality of life. Even if what they teach works, you have to spend so much time thinking that you won’t have time to rope more that twice a week.
Don’t get caught up in low stress livestock handling like Bud Williams teaches. So what if it will reduce sickness and death loss, improve animal performance, cut labor costs and lower your vet bills, you have to maintain an image don’t you? Do you really want your neighbors to see you walking behind a bunch of cattle? How are you going to have good horses and good dogs if they don’t get lots of work? How can you teach a young horse cow sense with a bunch of cattle that never break a walk and all stay together? Just why are you in the cattle business anyway?
Be sure and have the latest and best in hay equipment so that you can get your hay put up in a hurry. What is a few extra thousand dollars a year in interest compared to the satisfaction you get from all that shiny new iron? Plow up those old native hay meadows and plant one of the new “improved” varieties of annual hay plants. Sure this means that you will have to till and fertilize and plant every year so that costs go up and your country will erode some but you will get bigger yields. Above all don’t let one of these nuts talk you into making hay out of surplus pasture or even into getting out of the hay business by rationing out standing hay with sub divisions or even worse, temporary electric fence. This would mean that you would have to be thinking and planning all during the growing season about what forage you can expect and what your forage demand will be all during the year. If ranchers didn’t make hay all summer and feed it all winter where would they get their caps?
For sure don’t listen to listen to the “low cost production advocates”. So what if the price of beef and other commodities does tend to settle at the break-even price of the average producer so that only the low-cost producer can be profitable every year. What’s the point in being a rancher if you can’t drive a new four wheel drive, four door, dually pickup, ride really high powered horses and be known for having the most expensive and fattest purebred cattle in the county? Get to know all of the fertilizer, feed, vet supply, equipment and supplement salesmen so you can keep up with the latest technology. Steer clear of taking advice from the old timers in the business. Just because somebody has made a living ranching for forty years doesn’t mean they know the business. Most of those people don’t even use embryo transfers or GPS precision fertilizer systems.
Get those calves to market before they get too big. A 300-pound calf will bring a lot more per pound then a 500 pounder. If you want to be able to brag about “topping the market”, you better ship them early. There is a lot of talk now days about retained ownership instead of just shipping calves at weaning. Some people claim to dry winter their calf crop with just enough supplement to keep them healthy and growing normally and then make big and cheap gains on the spring flush. Even if they make three times as much net profit per calf, it is a lot of trouble to wean those calves and worry with them all winter. Don’t believe the stories about people weaning calves in the pasture with no stress, weight loss or sickness. You know darn well that won’t work. Have a real market plan. Bankers don’t like to loan money to buy when the market is down so pay attention to the market and be ready to buy when they get high. Bankers will always loan more money when the market is high, after all they are the financial experts.
Most important, know why you are in the business and what you want to accomplish. There are some soft headed nuts out there talking about how ranchers are not in the livestock business but in the business of harvesting free solar energy by converting it first to biological energy (green plants) and then into wealth in the form of meat, milk, wool, wildlife or what ever. You know what is really important and there will never be a (pick one- Angus, white face, goat, sheep, other) on this place while you are running things. Your grand daddy was a ______ breeder, your daddy was a ______ breeder and you are a ______ breeder or at least you were until the bank sold you out.
Walt Davis 1999