Tag Archives: future

Ranching in the Future

Here’s an excellent article explaining the impossibility of entry level ranchers and farmers.  Unless land and agriculture prices come to a reckoning, land will be owned by the wealthy and worked by those with a passion for land management.  We are headed that way culturally rapidly given the advanced age of current land owners.  With few heirs waiting to farm or ranch, the land will sell to the highest bidder far above its production value.

Shalom!

tauna

Ranching in the Future – What Should Young Ranchers Expect?

By   /  January 7, 2019  /  4 Comments

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I recently received a note from a young friend (let’s call her Peggy Sue) who desperately wants to be a rancher. Since her childhood she has dreamed of working with animals. She has learned about marketing and economics. She’s studied hard and become a competent grazier. She’s done some hard work. But she’s getting a little impatient.

“So, I’ve been looking at real estate ads all over the country, studying up on productivity of land in different places, trying to look up how many acres per cow it takes and how much each acre costs, and I just can’t figure this thing out. How are people doing it? I mean, how are people able to buy a ranch and pay for it by raising cattle?”

My immediate answer was not what she had been hoping for:

“I don’t know of anyone in America who is buying a ranch and paying for it by running cattle. This doesn’t mean you can never be a rancher—you can be. But going forward, you will only be successful as a rancher if you accept the realities of the current world. You must be able to adopt a definition of ranch and rancher that fits in the economic universe in which you currently live. And guess what? This is true for every other new rancher, too.”

Sorry, Peggy Sue.

Past, Present and Future Ranching Models

Both my wife’s and my own family trees are well stocked with hopeful people who put together ranching operations 100 or more years ago. First was homesteading, and later on there was picking up the pieces from other folks whose homesteads had failed. There was hard work and sacrifice. Fundamentally, the ranches of 100 years ago were founded on using land to grow grass and cattle. Land values were tied intimately to productive value of the land and the then-current values of the cattle market. And so, our ancestors built successful ranches.

Those days are over. The conditions under which our ancestors operated no longer exist.

Today, properties do not become available through homesteading or abandonment, and in general, ranch land prices have very little relationship to productive value. Other influences such as hunting and fishing, scenic view, and privacy are the determining factors in land price. The model described above: working hard to build functional ranches by acquiring and paying for land with cattle, is apparently not possible in today’s world.

In our own little valley, even though there is virtually no influence by hunting or fishing values or high mountain views, the value of land has now risen to the point where pastureland prices are clearly irrational. Turns out, there are plenty of people with plenty of money who just want to live in the country, and they will pay whatever it takes. In the 1980s, I told Ranching for Profit guru Stan Parsons that my chief concern with becoming a rancher was that land in my area was selling for $5,000 per cow unit. Currently, that value is more like $20,000. At $20,000, the land overhead PITI (Principle, Interest, Taxes, Insurance) is something like $2,000 per cow per year.

It should be mathematically obvious that the current land value situation absolutely precludes the possibility of becoming a rancher, if you think ranching has to look like it did 100 years ago.

So, is it possible for my young friend to become a rancher? Absolutely. But that will require her to accept a different definition of what ranching looks like and of what being a rancher means.

Going Forward: Ranchers of the Future

A principle of motion discovered by Sir Isaac Newton over 300 years ago applies directly here, I think:

I believe the trends that we have witnessed in ranching over the past 100 years or so will likely continue. These trends will determine what ranching will look like going forward, and the possibilities for present and future ranchers.

Here are some current trends to consider:

Land Prices

I believe the price of land will continue to escalate and will have less and less relationship to productive value. This means new ranchers will need to seek models that do not include “buying a ranch and paying for it with cattle.”

Other Input Costs

The cost of oil, iron, processed feed, and other inputs will continue to advance relative to the value of traditional ranch products. Future ranchers need to design models that place less emphasis on these things.

Technology

Our industry has become highly dependent upon technology. Whether this is a good thing or not is hard for me to tease out. That said, ranches of the future will surely include more technology. Ranchers of the future should build business models that take advantage of new technologies. This is certainly critical for businesses that involve direct marketing.

Societal/Political Change

There has been sweeping change in the relationship between urban and rural populations. Our urban neighbors are ever more interested in ecological issues, animal welfare, food safety, transportation, and on and on. Going forward, this trend will result in a higher degree of regulation of ranching activities on all fronts. Young ranchers should plan accordingly.

Diversity of Products and Services

Increasingly, ranches have become more and more involved in producing things beyond just meat on the hoof. Young ranchers of the future should consider business models that include providing even more diverse products and services. Growing hamburger is a low margin enterprise. Providing sites for weddings, hunting, vacations, etc. can be very high-margin enterprises. Like it or not, this may be what opportunity looks like in the future.

The Decline of the Rugged Individual

It seems to me that image of the rancher as a rugged, independent operator has always been a bit overblown. My great grandparents (and every generation since) were highly dependent on cooperation for survival. Going forward, I believe ranching will look more and more like other industries, with intensely complicated, inter-dependent systems of producers, suppliers, marketers and customers. Ranches will offer a wider and wider range of services, and they will serve a wider range of customers. No ranch will be an island unto itself.

(The exception to this will be the ranches that are owned outright by folks who have un-limited assets, and so, can do anything they want. These may be ranches, but I question whether they are Ranch Businesses.)

The Big Question: To Own, or Not to Own

Oregon author William Kittredge wrote a fine biography called “Owning it All”, a story about growing up in the big ranch country of the American West. I think young ranchers should consider exactly the opposite course: Owning almost nothing. And here’s some of what that might look like:

Owning portable fencing, corrals, and water equipment. Renting or leasing grass that land owners don’t want or don’t know how to manage. Same goes for livestock. Selling your expertise and skills as a grass and property manager. Becoming expert in managing the accessory enterprises that ranches will contain in the future: tourism, education, entertainment, recreation, sport, etc. Note: be sure to make enough profit to fund your own retirement, as you will not be accumulating any real estate.

Decisions, Decisions.

I could be wrong about all of the predictions above. Maybe land costs will magically revert to align with productive value. Maybe young ranchers will be able to enter the industry, buy some land and livestock and make out just fine. Maybe. But I doubt it. I think young ranchers would be well advised to conjure up a business plan that includes the parameters and limitations we now operate under, and think carefully about what the future might look like.

Best wishes to Peggy Sue in the coming year. Oh, and to the ranchers of the next 100 years, too!

Happy Grazing, Happy New Year, and a Happy Future

John Marble

Stay tuned for future articles with examples of how young farmers and ranchers are building their businesses.

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  • Published: 2 weeks ago on January 7, 2019
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  • Last Modified: January 7, 2019 @ 8:40 am
  • Filed Under: Money Matters

ABOUT THE AUTHOR

John Marble grew up on a terribly conventional ranch with a large family where each kid had their own tractor. Surviving that, he now owns a small grazing and marketing operation that focuses on producing value through managed grazing. He oversees a diverse ranching operation, renting and owning cattle and grasslands while managing timber, wildlife habitat and human relationships. His multi-species approach includes meat goats, pointing dogs and barn cats. He has a life-long interest in ecology, trying to understand how plants, animals, soils and humans fit together. John spends his late-night hours working on fiction, writing about worlds much less strange than this one.

Consider the Future by Kit Pharo

This goes for any business, but is specifically written by a rancher to ranchers/farmers.  It is sad how few ranching businesses stay as such from one generation to the next.  Kit explains again one reason for this.

 

PCC Update

November 7, 2018

Cowboy Logic: “The future ain’t what it used to be.”

Consider the Future –

By Kit Pharo

Have you noticed that the most successful and happy people throughout history have been those who made decisions that were based on the future?   It’s true!   Successful people know that nothing stays the same.   The present is different from the past – and the future will be different from the present.   Those who make decisions that are based on the future will always have a HUGE competitive advantage over those who continue to make decisions based on the past and/or the present.

Unfortunately, nearly all people from all walks of life are afraid to make decisions that are based on anything but the past or the present.   It has always been this way, and it will probably always be this way.   Even though they can see things transforming before their very eyes, they are reluctant to make any changes in what they are doing.   It’s as though they would rather fail doing what they have always done than succeed if success requires change.   That is a shame – but it gives you the opportunity to move your family and your family’s business to a very sought-after position.

Based on what you think about the future, what kind of management decisions should you be making in your cow-calf operation?   I’m not going to tell you what I think.   I want you to do your own thinking.   You may come up with something different and/or better than what I have.   The decisions you come up with, however, need to be based on what you think the future holds.   Be bold in your actions.   Those who are slow to take the appropriate actions may lose all they have – forcing their kids and grandkids to get jobs in town.

Quote Worth Re-Quoting –

“The past cannot be changed.   The future is yet in your power.”   ~ Unknown

PHARO CATTLE CO.

Phone: 800-311-0995

www.PharoCattle.com

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Trees and Timber Management

The benefits of managing trees and timbers far outweigh the tree-hugger (an environmental campaigner used in reference to the practice of embracing a tree in an attempt to prevent it from being felled) concept of saving all or specific trees.  Biblically, we are instructed to tend and keep the garden – not let it run rampant into total chaos.  Work is not a four-letter word in the negative sense and it behooves us all to manage for effectiveness, efficiency, helpfulness, integrity, and beauty.

As Greg Judy shares, there are two ways to establish silvopasture or savannah.  One way is to clear out dead or unproductive trees in existing timber or to plant a diverse mixture of productive and valuable trees.    Planting and establishing a new timber will take decades before reaching its full potential, but if you didn’t start decades ago, might as well start now.

Unmanaged timbers will eventually become worthless – full of scraggly crooked trees which will never grow if the older trees are not harvested at their peak of quality.  The heavy canopy old tall trees prevent youngsters from reaching their full potential.  Even though the old fogy’s will eventually die, the young trees may never recover and the timber itself will fail.  This may take a millennia, but why not manage it, sustaining, regenerating, as well as taking off a cash crop to help pay the bills.

Trees and timber are so important in our environment – for people, livestock, wildlife, soil.  Shade is the first benefit which often comes to mind.  Evapotranspiration is the ‘coolest’ sort of shade there is – much better than that provided by a shade cloth or roof.  Additionally, we harvest fuel, wildlife, forage diversity, shelter, lumber, and a beautiful landscape.  But management is more than harvesting, it also requires protection from overuse by livestock and even wildlife, yet on the flip side, excluding animal use will allow brush overgrowth and a buildup of fire fuel, which during a dry hot spell could catch fire and destroy your timber in a matter of moments.

Trees which are allowed to grow large around ditches, draws, and branches destabilize the banks.  Their large roots won’t hold the soil as well as millions of deep rooted grass plants, so it’s best to keep those sprouts cut out so grass can grow.  My observation is that once trees are removed, sunlight can reach the bank which allows the grasses to grow, especially with the ready supply of water!  Include timeliness of livestock impact (to knock down the steep eroded banks) and grass will quickly cover those leveled areas as well.  This all works together to hold soil, reduce erosion during what we call gully washers and slow the flow of water across the landscape.  It’s a beautiful thing to watch the land heal.

Spring 2013 (1)
Note how the left side is devoid of trees and the bank slope is less steep and covering with grass while the right side had a fairly large tree grown into the bank.  It could not hold the soil which has washed out from under the tree and it is falling down and will become another liability not to mention the loss of potential lumber or fuel.

A word of caution in all this!  It will not work if you hire a bulldozer and push out trees – roots and all.  This moves too much soil which may cause a lot of erosion and make the scarring even worse.  The trees must be harvested leaving the roots in place.  I find it more attractive to cut the stumps fairly level to the surface, plus the convenience of not having a stump to run into, but it probably doesn’t make any difference from a soil saving aspect.

The final argument to address is to define my use of the word ‘management.’  One way to manage is to bulldoze, another is to clear cut, but i’m referring to managing for regeneration.  Sustaining my unmanaged timber is not smart – improving for the next generation (regeneration) is more respectful all around.

Create something beautiful today!

tauna

12-8-use-existing-water-sources - Alan Newport
These grassy banks will hold against much erosion around this pond.  However, the roots of the trees on the right will grow through the bank eventually causing the pond to leak as well as shade out soil saving grasses.

 

 

 

 

Bud Williams on Science

Reprinted from Bud Williams’ Musings.  Sign up for access to reflections on life and livestock (marketing and stockmanship) at stockmanship.com.

Science?

Posted December 8th, 2012 — Written by: — Filed in Bud’s Musings, Marketing

This is a direct quote from an article I read awhile back.

“The name of an article in a non-farm magazine was “Gulf hypoxia thought to be caused by agricultural run off.” Yet this year it was 33% the predicted size and no one knows why science failed to be right.”

No, it was not that science failed to be right, it was that they guessed wrong, and that is not science. Guessing is what people who have an agenda “call” science. Science is when something is studied until they know that it is right and it can be proved.  There is so much guessing about things in the future that to try and make the guessing legitimate they call it science, and then try to have it accepted as proven.

This is much like the livestock markets.  Most people want to guess what the prices will be in the future. These guesses often fail to be right then it is blamed on something else. Always deal with real things not guesses or hopes.  The things that are real are today’s prices not what they may be in the future. There is one thing about today’s prices, they are easy to prove.  That must be very scientific. It will be very hard to prove that prices in the future are right until we get there, that must not be very scientific.

 

Bud Williams died a few years ago, but his thoughts, videos,  and stockmanship teachings are kept available by his wife and daughter at stockmanship.com.  There is a massive amount of information necessary for becoming competent and improving at developing relationships with animals and people.

 

Cheers!

tauna