Tag Archives: land

Starting a Ranch – Is it Viable?

Here’s another great blog by Dallas Mount who owns Ranching Consultants (Ranching for Profit).  He outlines the start up costs of beginning a ranch.  It’s never been easy to ranch or farm – even when US government was giving away land.  Most of that land was harsh and unforgiving and many families were starved off trying to make a living.  However, there have a been a very few years in the last century which might have made purchasing land to farm a viable option.  At today’s land prices, that is not an option.  Prices are way out of whack in regards to its agricultural productivity.

bakingCan’t be done. At least that is what conventional wisdom says. I’d agree that it can’t be done, if you follow the rules of traditional ranching – running cows the way everyone else does and owning everything. If you are willing to break some rules and challenge conventional wisdom maybe you can join the amazing group of people that have done it.

Let’s look at the economics of conventional wisdom for starting a ranch from scratch. You’ll need land. Of course, if you want to be a real rancher (so the thinking goes) you’ll need to own it. If you are going to ranch full time, you’ll need enough cows to support a family so let’s plan to buy a ranch that will run 400 cows. In much of ranching country, the rule of thumb is 35 acres per cow. Let’s push that to 40 and ask those cows to graze year-round.

The value of the land will be driven by things other than its forage producing value. Generally aesthetic value and proximity to a metropolitan center will drive the land values. Let’s say we found a ranch that will sell for $600/acre. We will need 16,000 acres so our purchase will be about 9.6 million. Of course, we need to own the cow herd as well. 400 cows, 16 bulls and 80 heifers will cost us about $700,000 in today’s market and we will need an arsenal of machines so let’s add another $300,000 to make it a round $1 million for livestock and machines.

If we find a bank willing to finance all of this, we will likely need to come up with 20% down at least. So we will need about 2 million for the land and $200,000 for the livestock and machines. It just so happens our great aunt just died leaving us 2.2 million! Now all we have to do is service the remaining debt! Should be easy right? If the bank finances the land at 5% for 20 years and the cows and machines for 5 years at 7% that will leave us with a payment of about $600,000 per year on the land and about $200,000 on the cow/machine note.

If we divide our total payments of $800,000 by our 400 cows then each cow will need to generate $2,000 annually for debt service not to mention covering her bills for feed, vet, trucking, and all the other overheads. We better wean some big calves! Are you ready to buy yet? Maybe we should just sit in the coffee shop and complain about all of this? Oh … I know … it’s the banker’s fault for charging interest!

Hopefully this demonstrates that ranching the conventional way is not a realistic path to ranching from scratch. So what is? Firstly, I think it is important that we make a separation in our minds from operating a ranching business and owning land. After all, you can run 1,000 cows and not own a single acre of land, and you can own a million acres of land and not own one cow! Being in the land investment business and being in the livestock business are two separate businesses. The land investment can be a great place to park money and enjoy appreciation and wealth building over time. It can be a terrible place to park money when you need cash flow.

At the Ranching for Profit School, we teach an economic planning process that requires any livestock you run to pay fair-market rent for the grass they consume. Not including this in your planning essentially subsidizes your livestock enterprises with free grass from your land business. Conversely, asking cows to make your land payment might subsidize your land investment by overcharging your livestock business.  You must do the economics right to know where you are creating value. If you want to buy land, let’s establish a profit target that you will need to achieve to reach your goals and develop a business around that profit target.

Many of our alumni get into ranching from scratch by custom grazing cattle on leased land. This is often a model with a strong cash flow and can allow the operator to build reserves that can be used to invest in livestock or real estate. This certainly isn’t a utopia. There are the challenges of finding leases, managing landowners, developing good grazing infrastructure and many others. The skills necessary to be successful in this path include:

  • People Skills – managing landowners, marketing yourself as a lessee and custom grazer, putting a team together to do the day-to-day.
  • Grazing Skills – planning, implementing and monitoring land health and reporting back to landowners.
  • Economics and Finance – planning for profit, budgeting, and cash flow management.
  • Livestock Handling – leading your team or managing yourself to meet livestock performance objectives.

I’d love to hear from those of you who started from scratch. What advice would you have for someone else looking to do the same?

18 Responses to “Ranching from Scratch”

June 24, 2020 at 3:57 amjames coffelt said:

Excellent discussion

Ranching is a great life style.

Is it a great business? Peter Drucker, the great business writer, suggests every business, every idea, every activity, and every employee, should be on trial for its life, every day.

Can a ranching business succeed? Yes, and there are plenty doing it. However, that is not the right question.

We should ask: How are these assets, efforts, labor, and risk, performing relative to other alternatives?

An S + P 500 index fund has averaged a 12% return for years.

So, is the equity invested in the ranching business, cattle and land, performing better than 12% ? Note, I used the word equity, not assets for the comparison. That is, net assets.

I would suggest the following:

The only management model to consider is a low input management model. Work toward eliminating or reducing, shots, worming, tagging, calf checking, weaning, machine work, hay. Let the cows rehab the land, and produce cattle genetically fit to thrive in the all-natural survival of the fittest, model.

Work from set stocking, to rotational grazing, to mob grazing, as able. Each step is better for the land, and permits an increase in stocking rate. Stocking rate influences profitability more than any other trait, more than performance, milk, growth, marbling, etc..

Find a way to sell into premium markets. A quality animal sold by the piece is 3-4 k retail, $800 at the sale barn. That spread requires sales and marketing effort.

The land is a separate business which can include revenue from gas and oil, hunting, fishing, timber, tourism, etc..

The choice to ranch for love of lifestyle is admirable. However, it is a business which requires economic performance.

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June 24, 2020 at 4:09 am, JOSH LUCAS said:

Learn how to be an effective communicator! (Like they teach at the rfp school) Managing the landowner relationship when leasing can be challenging if you don’t communicate your goals for the property well enough.
Oh and definitely don’t buy equipment!

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June 24, 2020 at 6:07 amShelly Oswald said:

Good points but where is the marketing component where you know the intrinsic value of your products, communicate that to your customers and obtain the premium you need to be profitable without cutting corners?

The other point missed is that your approach conserves capital investment in the land and treats it like the profit center it should be. In order to conserve our farmland and keep it in the hands of our citizens, we need to be paying fair rent to ourselves or our neighbors and not asking them to subsidize the food we produce.

I love the principles you teach!

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June 24, 2020 at 6:15 am, Rebecca Patton said:

My husband and I came back to his family ranch in the hopes of developing a succession plan and being able to take over and run a successful ranching business, however, we were stuck in the paradigm that there is such a huge barrier to entry in ranching that our only opportunity to make money with cattle was to be successors to a debt free ranch. Apparently the older generation had different priorities than ranch transition, so we are now looking to break away with the new perspective that we can do what we want through custom grazing and leasing, and we have never been more excited! Thanks for sharing Profit Tips with us!

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June 24, 2020 at 6:20 am, Clint Hoelting said:

If you are going to take care of other people’s cattle on other people’s land, you might as well get a job on a ranch. Same thing, except with Custom/Lease you will have to pay for overheads a ranch hand wouldn’t.

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June 24, 2020 at 7:42 am, Justin Tollman said:

I was stuck in the “How To Own It” traffic jam for a while, and then was introduced to Ranching For Profit. In 2014, my wife and I had no ranch, and no idea how to step into a ranch, but I knew I wanted to. We went to a RFP School, and that really sparked an idea for me to set up a business plan that I could get people to buy into: Leasing a ranch!
Prior to that shift in paradigm, we were stuck. You see, I grew up on the ranch that we now lease. But, so did my sisters. It’s been in the family for over 120 years, but my parents were stuck in the asset transition trap: How do you be fair to everyone? My wife was extremely scared of going into a huge amount of debt, and quite frankly was scared of what happens if it doesn’t work.
The lease model has opened many doors! It got us unstuck. Has it been perfect? Of course not! I don’t know a ranching family that has everything go perfectly. When the all of the cattle issues go right, people issues may flare, when the people are happy, water issues might pop up, this business has a way of humbling anyone who knows everything. And then, there are always customers to deal with, and luckily almost every “contentious moment” with my customers has been built up worse in my mind than in reality. But, I’ve heard it said that people get paid by the size of the problems they can solve, so if you want paid more, choose bigger problems.
I’ve heard so much “I don’t think you can do that!” Well, my favorite saying now is “You never know what you can do until you have to.”

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June 24, 2020 at 7:44 am, john marble said:

I think the biggest roadblock to starting or maintaining a successful ranching business is the commonly-held belief that ranching is somehow different than other businesses or industries. Loving to work outside, handle livestock, smell the new-mown hay…all of that is fine, but it doesn’t have much to do with running a successful business. People who want to enter the ranching industry need to do the same things that new entrants to the gas station or motel or bowling alley business have to do: market goods and services at a profit. Not very romantic, but clearly true. Successful business people study marketing and logistics. They develop relationships with other progressive, smart operators. They avoid enterprises that lose money.

Sorry to break the new: ranching is just not that special.

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June 24, 2020 at 11:02 am, Marc Cesario said:

John – love it!

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June 24, 2020 at 8:01 am, Davene Finkbeiner said:

I started from scratch at 50 years old. Now I am 62. I followed ranching for profit Allan Nation Joel Salatin Bud Williams.Turing the ranch over to my children. It has been one hell of a ride.

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June 24, 2020 at 8:48 am, Marc Cesario said:

It’s amazing how often you can hear advice, even believe the advice that’s been given, then somehow rationalize why your situation is different. It’s so easy to fall into the trap of machinery, equipment and barns but it’s a dead end more often than not. Grass, appropriate fence and a good water system is really all what most start from scratchers should focus on.
It’s good and necessary to believe in ourselves, but too often we think we can do more than we actually can. At best, I feel we can only do two things well, and more likely it’s probably just one thing. Often multiple enterprises just drain resources from the each other. Stay focused.

The word priority was only ever used in the singular until the 1900’s. There can only be one priority.

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June 24, 2020 at 8:52 am, Marc Cesario said:

Josh- yes, Managing expectations is extremely important. underpromise and over deliver.

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June 24, 2020 at 9:54 am, Ross Macdonald said:

Don’t get caught up in a recipe, what you know today will change/evolve over the next several years.
Let your definition of profit drive your decisions and recognize that it is never perfect but with effort, desire and experience it gets much better.
Soils, grazing, stockmanship, marketing, relationships are get better if you work to make them better but it is a journey not a destination, so your definition of profit had better include happiness.

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June 24, 2020 at 11:49 am, john marble said:

Gosh, Clint, I haven’t found that to be true at all. I’ve rented quite a number of places over the years, and the amount I pay in rent has absolutely nothing to do with land overheads. On occasion, I’ve had land owners express their desire for the rent to cover property taxes or some other irrelevant item. I try to be fair with owners, but in the end I will only pay a rental rate that allows me the opportunity to make a good profit, and that is often based on running “other people’s cattle” on that rental land. Sorry, but negotiating land rentals, signing contracts on custom cattle and designing business plans that result in profit are not “hired hand” jobs. Those are business owner jobs.

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June 25, 2020 at 9:45 am, Justin M Tollman said:

I think John and Clint may be looking at two sides of the same coin. To paraphrase Clint “you’re working for someone else if you custom graze on leased land.” I will say that the thought has crossed my mind over the last 3 years that I would be better off financially if I just worked for someone else. That’s on a cash taken home basis. But, when you look at net worth vs. cash flow, that isn’t the case. To John’s point, working on the business is different than working in the business. If I didn’t want to set direction, plan my own time, work on the big picture stuff, and play the virtual 3-D chess game that is forecasting, contingency planning,etc., then yeah, working as a hired hand on an outfit might be better. But, always know, you are always working for a customer. Whether that customer is someone who writes you a paycheck for labor, or a customer who writes you a paycheck for cattle that you sell, or a customer that writes a paycheck for custom care. But, ranching from scratch, to me it’s about setting the direction, the mission and vision, the building for a brighter and easier tomorrow, and taking ownership of that process. I’m not as excited about the ownership of land or things, but the ownership of happy business partners.

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June 26, 2020 at 6:14 pm, Amber said:

I totally agree. My husband and I and our two kids lead a great life on leased land, with custom grazed cows and building our own cowherd on the side. We work for ourselves, while functioning in a great network of relationships. It is all about how you treat people.

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June 27, 2020 at 12:36 am, Graeme Bear said:

A great topic Dallas. Often the most thought provoking topics are those that challenge traditional thinking and paradigms. Love the collection of views and contributions by everyone on this one. The fundamentals of successful business are the same whether it be a cattle ranch or transport or manufacturing business, exactly the same principle apply.

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June 28, 2020 at 5:12 am, Doug Dillon said:

It can be done! I have done it twice. I purchased my first ranch in 2009 after graduating college. Purchased another ranch in 2014. Sold the first ranch in 2015. I attended two RMC schools and was in the Executive Link from 2010 until 2015. The two biggest things I think any one starting from scratch needs to keep in mind is you have to be passionate about what you are doing, it’s going to be tough. Keep you pencil sharp and make the hard decisions that make you money.

The 2nd is don’t get married to a ranch. In 2015 Mike Hall spoke at the RMC summer meeting in Laramie WY. He talked about “not being married to a ranch.” I realize not all ranches are equal, and its hard to walk away from something you have built. He talked about making your land business profitable by selling land. Its a difficult thing for most people or families to do, but if you are starting from scratch you are going to have to do some of these difficult things to generate cash to get out of debt.

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June 28, 2020 at 7:15 am, Davene Finkbeiner said:

I started from scratch 10 years ago with leased land and share cattle. I agree about selling land. Bought pasture based on its resale value and now have it listed for double the price I paid for it. When cattle prices were at there peak I did not buy more cattle I took share cattle instead and put cash into rental houses.Now they are producing a income of 1200 per month.Biggest problem in our area is I am surrounded by inheritance ranching operations who spend a lot of time trying to derail the start from scratch operations. They are especially hard on young people just getting started.I am looking for a good support group for my 2 Kids just coming into the cattle business.

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Young Ranchers Meet in Wyoming!

Ranch Management Consultants, with an acknowledged huge amount of other support, hosted 48 youth from 17 states in Sheridan, Wyoming for 4 days!  If even half those become true ranchers and not serfs on the land, the livestock industry will be in good shape.  However, given the financial/investment outlook in our country, none (unless they are already incredibly wealth) will be able to build a legacy.  Our economy has been moving in this direction for years, but is now accelerating into something unrecognizable.  Too bad.

young ranchersLast week, in partnership with Wally Olson and the Plank Stewardship Initiative, we hosted the first ever Young Adult Ranching for Profit Workshop. We had 48 youth from 17 states in Sheridan, Wyoming for an incredible four days! The energy, enthusiasm, and passion these young people have for ranching and agriculture was contagious. Several times during the week the instructors and I caught ourselves in awe of the group that was assembled. Just thinking of the amazing things they will accomplish, gets us excited for the future. The format of the days involved morning discussions on topics ranging from economics, grazing, to succession. Then we grabbed a sack lunch and headed for the ranch tour that made up the afternoon. We were able to visit three amazing and welcoming ranches where at each stop, we found hands-on activities and intense discussions with management. The workshop ended with participants having small group meetings where they offered peer advice and developed action plans for moving forward. This multi-day workshop wasn’t something we at RMC could do alone. Enormous thanks goes out to the partners, instructors, and hosting ranches. We anticipate making the Young Adult Ranching for Profit Workshop an annual event.

One thing that became clear to me was that these young people are eager to take on additional responsibility and assume a more prominent role in the businesses they are involved with. It is easy for Junior to say “get out the way…. I’m ready to run this!” but it is significantly more difficult for the seasoned manager with battle scars of past mistakes, to know when and how much control to relinquish. At the Ranching for Profit School, we teach the importance of developing clear expectations for each position in your operation. Stephen Covey in the 7 Habits of Highly Effective People expands on that with the DR GRAC acronym of Desired Results, Guidelines, Accountability, and Consequences as a thorough way to delegate important tasks. If Junior is going to take over the grazing planning what are the results and specific targets we need to achieve? It should be written down how and when we are going to measure these. Targets for the grazing manager might be:

  • Every pasture has a monitoring transect by 2022-monitoring report due Nov 1
  • 75% cover by perennial plants- monitoring report due Nov 1
  • Decreasing bare ground- monitoring report due Nov 1
  • SDA/1” precip reported monthly- Monthly WOTB meeting
  • Target rest periods achieved 90% of the time- Grazing Plan reviewed Dec 1

If Junior wants more responsibility, then management should identify where the business is currently failing to produce the desired results. From there you can develop a shared understanding of what a quality result for the business would look like. Junior might need some support on how to be successful in creating these desired results. Maybe there is a neighbor that has this figured out, that Junior can talk with or perhaps there is a class or training on the subject that they can attend. Writing down the guidelines and deadlines for this task on a flip chart and taking a picture of it will help everyone remember the agreements next time the subject comes up.

I don’t buy it when I hear that no young people want to be involved in agriculture. After spending four days with 48 youngsters pulling at the bit, ready for a shot, you wouldn’t either. Those of us in the leadership roles need to create opportunities for them to develop themselves into the people they can become.

One Response to “The Next Generation of Passionate Ranchers”

June 10, 2020 at 2:58 pmMark Hollenbeck said:

You are going to be challenged to meet the demand for this school. There is just nothing for young people that want something real dealing with ranching.

Land Considerations

As i get older, i’m more aware of how much time and hard work a piece of property can be.  Many years ago, my grandpa gave me a 160 acre piece of his land and i now realize that he was about my age now when he gave it.  I was much younger and was thrilled, but now i can see that he was probably tired of managing and fixing all its problems.  In fact, it is only about the east 80 acres of the farm i now have that incurs 80% of the work i do on the 520 acres i now own/manage.  (it is a sad reflection of our time that in north Missouri that is no where near enough property to make a living on).  At the same time, it’s the corner of that piece that is the best for working and loading out livestock.  (interestingly, my daughter, at about age 11 made the comment, ‘i don’t like this farm, it is too much work!”)

Truth be told, if it was possible for me to control the land to the north of me and to the south, i could all but eliminate the massive erosion and washing problems which cause my little piece to be so much work.  But i don’t, so difficult repairs are recurring.  Controlling the ‘heads’ of the water by building ponds or dams would practically stop all but the worst rain events which cause such destruction.  The biggest help would be to seed down the hills that are being farmed every year.  There are no roots to hold any soil in place and increase water infiltration on acres and acres of slope.

So, a point i’m trying to make is – look to your future self when purchasing a property – is this property you are considering fixable?  or will it be constant work?  We actually looked at a property last year that was adjoining and for sale, but with all it’s deep ditches and no control of the head, it would be more work than what we wanted to take on now at retirement age.  It is FAR too much asking price anyway.  (It’s still for sale)

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The water rushes through this gap so high and fast that there is brush and sometimes huge logs on top of the sealed road you see in this photo.  This time, there are only a few small pieces on the road, my fence caught most of the trash.  The fence is laid over so much, that i’ll actually take the wires off the two posts you see, pull the posts and reset them on the inside of the trash and it will still be in line with the existing fence.

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using my post puller  (from Hometown Hardware, Brookfield, MO) at a funny angle, but it worked!  i put a small log underneath the ‘foot’ of the contraption so it wouldn’t sink into the mud when i put pressure on the handle.

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All set to cut this piece of tin off because it’s so buried in the sand and mud, i couldn’t pull it out.  Took the photo, picked up the DeWalt reciprocating saw, clicked it off safety, and pulled the trigger.  Nothing, no power, what?!  Well, clearly you can see what i couldn’t – i forgot to bring a battery with me.  So, i will do this part of the repair on Friday when i come back to my farm.  UGGGHH!

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This one was a bit of a pickle, but after scratching my head a bit, i figured out a plan.  thank goodness i got a ‘B’ in geometry.  Farming and ranching is a LOT of problem solving with the tools you have on hand and putting them in the right order and angle.

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For fun, i found this map which shows the watershed area through which this one watergap i’m repairing all the runoff water passes through.  I measured the area and it encompasses 560 acres of surface land area.  When we get gully washers, which do come at least 3 times a year, that’s a lot of water rushing down Lick Branch – no wonder my fence gets washed out every time.

Can a Desk Be A Legacy?

The answer, of course, is ‘it depends’.

Consider that the desk you remember your grandpa sitting at this recording transactions and sorting papers for his business was just a tool.  Ask yourself, was the desk something important to him as if ‘doing books’ was something he enjoyed?  If no, perhaps this desk is not a legacy.  What if the desk was worn out when it was purchased and has been patched, nailed, screwed, cracked, hinged, and all sorts of problems that barely keep it together?  Is it worth keeping?

Since my guys (son, Dallas, and my husband), with great effort, moved this awkward, bulky, heavy, desk across the basement, up the stairs and outside (we had to remove the door to get it through the doorway), around the house to the front door, which we had by then premeasured to see if it, too, needed removal (thankfully it didn’t – it was a close fit), then into the northwest bedroom we had long since abandoned  to a piano room (it was the only room the piano would go into except for the living room), these were questions i now ask myself. img_7981-1

As Dallas noted, ‘it’s too worn out to sell, but too nice to throw away.’  However, this is the last time, i plan to ask anyone to move it again.  If someone in the family wants it, of course, they could move it.  🙂

The reality is that the desk, though it did belong to Grandpa, was not important to him and it does not lend itself to a modern business.  Add that it is barely flying together in close formation and it no longer has value to me, sentimental or otherwise.

The important legacy he gave me is my love for the land and cattle I now care for.  He and my grandma put together a good deal more than a section of land and when i walk across the pastures and climb through ditches and enjoy watching cattle still grazing the hills he and i rode over together, and even when it’s time to fix fence and repair corrals- that is the more important memory.  My goals are to continue to improve and regenerate the land as did Grandpa and Grandma in their generation. IMGP4418 (2)IMG_488235388877_10211785511375645_7474410836518240256_nPurdin farm - October 2012 002imageimage12322953_954744721238761_6610717492246296215_otannachton farm 002Tannachton Farm - winter grazing 2013-small copywrited1780196_607145359354784_1901369761_o

 

Shortage of Land for Farms

The title is a bit misleading.  True enough that many productive acres are consumed by housing and commercial uses – covered up with concrete and buildings – changing the micro climate almost immediately.  Although, this does lessen the number of acres available, it is also true that with properly managed grazing and proper use of cover crops and regenerative agricultural practices (read this as a return to more productive agrarian crop/livestock integration and rotation), more food can be grown on less acres with an improvement to the soil structure.  Where the shortage comes into play is that it takes larger and larger operations to actually make a full time living.  Farmers compete with one another, people looking for an investment, and folks who are looking for ‘play’ ground (hunting retreats) drive land prices far above their production values.

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A ‘salad bar’ of grasses, forbs, and legumes doesn’t happen over night or by accident.  Most ground (mine included) has been over cropped and over grazed for decades and require attention, some money, and proper management to become productive again.  Contrary to popular belief, the addition of nitrogen and other synthetic fertilizers, do not improve soil.  In fact, nitrogen burns up organic matter!  They feed plants, but not soil microbes for long term improvement.

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The poly braid temporary fencing is just one of many tools we use to manage grazing of our cattle to allow proper rest and regrowth.

However, here is a good article from On Pasture with ideas of consideration into what to look for in good land.

Tips for Evaluating Property for Raising Cattle

By   /  September 30, 2019  /  No Comments

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This article comes to us from the Noble Research Institute’s Robert Wells, PhD., Livestock Consultant, and Rob Cook, Planned Consultation Manager and Pasture and Range Consultant.

When buying land for cattle production, there are some unique characteristics to consider before signing a contract. These characteristics include: stocking rate, forage quality and type, soil type and fertility, terrain and slope of the land, water sources in each pasture, number of pastures and traps, working pen availability and condition, fence condition and type, and other infrastructure (overhead bins, interior roads, etc.) availability and condition.

Every Property is Different

Many times a potential buyer is told that a ranch in a given area will run “X” amount of cattle. For example, “ranches in this county can run a cow to 15 acres.” These figures are rules of thumb that are normally rooted in some truth but are hardly ever accurate, especially for a specific property. Not every ranch is created equal. Ranches in the same area can have varying forage production potentials based simply on the soil types that are present.

Soil Types

Soil types can vary widely, not only across counties but also across ranches. Each soil type has different forage production potential. A loamy, bottomland soil will have the potential to produce more grass than a shallow soil found along ridges or hilltops. Knowing what and how much of each soil types are on the ranch will allow you to understand the forage production capability of the land you’re investigating. Land that has the capability of producing less forage for cattle consumption than other properties in the same general area could be less valuable to a livestock producer because of the reduced animal number it will support relative to properties of comparable size.

The Web Soil Survey website, maintained by the U.S. Department of Agriculture Natural Resources Conservation Service (NRCS), is a great tool to determine what soil types are on any given piece of land. This tool allows you to map out the property and run reports on what soil types are present, in what amounts, and the forage production capability for each soil type. There is also ratings on the building suitability for home and barn sites, crop production, and pond development just to name a few. This tool can be found at websoilsurvey.sc.egov.usda.gov or with a quick internet search for “Web Soil Survey.”

Nongrazeable Land

Not all of the acres on the property will be grazeable. Roads, energy production sites, steep or rocky terrain, and high densities of brush cover will restrict grazing animal accessibility and/or reduce or eliminate forage production. These areas will have to be accounted for when determining the property value for cattle production because the production realized on other acres or income from other enterprises will need to be utilized to pay for nongrazeable acres.

Studies have shown that cattle use decreases as rock cover increases. Rock cover of 30 percent or more could result in no grazing use from most cattle in a herd. Cattle seem to avoid areas with greater than 10 percent slopes if other options are available. Reduced production from high brush densities can be overcome by implementing brush management practices. These practices are usually relatively expensive, and must be accounted for when considering the cost of operation or purchasing land.

Past Land Management

The land health must also be considered. Past management can have a large impact on land health, and large amounts of time and/or money may be needed to overcome misuse by previous managers. A quick soil test on introduced pastures will give you an idea of the soil fertility and what type of nutrient inputs will be needed to meet the management goals you have for the property. Native grass communities could be shifted to less desirable grasses or low production because of past overgrazing. These issues can be corrected with proper management but will need to be thought through when developing a grazing management plan or an analysis of the economic feasibility of purchasing and operating a property.

Water Location and Quality

Water location and quality is essential when evaluating land for cattle production. As a general rule of thumb, cattle prefer not to range more than one-half to three-quarters of a mile from a water source. Therefore, make sure water sources are no farther than 1 mile apart in each pasture. The closer the better, as areas closest to the sources will be more heavily grazed; those furthest away will have little to no grazing activity. Larger and deeper impoundments will typically have better water quality. The larger the water source, the less susceptible it is to drying up in a drought. Well water is usually better quality and a more dependable source, especially during droughts. However, it is prudent to test all water sources to ensure there are no pollutants that could cause an animal to reduce intake or harm. Well water can be high in sulfur and salts that can be detrimental to cattle performance.

Infrastructure

What infrastructure will come with the ranch? Is there is an overhead feed bin on-site that could be negotiated in staying after the sale? Overhead feed bins cost $8,000 to $10,000 to purchase, deliver and set up on a ranch. They allow for flexibility in feed types as well as when and from where feed can be procured. Are there quality and large-enough working pens that are strategically placed on the property? Look to see how well the working pens are constructed. Make sure the layout is logical and that cattle will flow calmly and smoothly through the working area. Make sure there is a good, full squeeze chute in the pens, not just a head gate at the end of an alley. Building new working facilities on a ranch is an expensive undertaking, especially if old pens have to be torn out before a new set is built.

Additionally, make sure the ranch has good internal roads. Inclement weather events, especially during the winter and spring months, can make it difficult to get into pastures that are only serviced by dirt roads. If the property has oil field activity, ask who maintains the roads. A good gravel road can make it easy to feed cattle during the rainy season.

Fence Conditions

What condition are the fences in and are they in the right places? Fence construction typically costs more than $9,000 per mile if built on flat and clear land. If brush has to be removed or earthmoving has to occur to ensure building ease of an effective fence, costs can increase dramatically. Different forage types need to be fenced from each other to be properly managed. Native grasses should not be in the same pasture as introduced grasses or crop ground. All fences need to be in good enough condition to hold the species you plan on grazing. Field fence with several strands of barbed wire on top is desirable in traps located adjacent to working pens and where weaning will occur. Goats will require field fencing to be most effective in containing them. Bulls will require at least a five-strand barbed wire fence in good condition to keep them apart from the cow herd during the nonbreeding season.

Easements

Finally, ask if there are easements that could impact property use. Be sure you understand the nature of any and all easements that my impede portions of the land. Pipeline or power transmission line easements will require a certain setback where no building construction can occur. Have there been any easements with private groups that prevent livestock grazing?

This list is not exhaustive and the topics discussed are not intended to be looked at as a make or break on a deal. They are only meant to make you aware of some things to consider when looking at properties. Things such as location, options to purchase other land, goals and objectives, and cost could trump any or all of these. Remember to engage industry experts such as Noble Research Institute consultants, land-grant county extension services or NRCS employees before buying a property to help you make the right decisions. Ask the right questions and take everything into account before deciding to buy. Knowing all this information up front can help you as a potential buyer determine a reasonable value for the ranch.

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Feeding Hay to Improve Your Land-Part 1

As you may already know, Jim and Dawn Gerrish are two of the most notable and knowledgeable people when it comes to land and livestock management, including management-intensive grazing (MiG).  Jim has his own consulting business which can save you lots of money right from the start of your adventure in managed grazing.  Contact him through American GrazingLands Services, LLC.  Find him on Youtube videos and pick up one of his well written books, Management Intensive Grazing – The Grassroots of Grass Farming and Kick the Hay Habit – a Practical Guide to Year Round Grazing.

Find Part 2, Part 3, Part 4, Part 5, and Part 6.

Feeding Hay to Improve Your Land – Part 1

By   /  February 25, 2019  /  3 Comments

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We think it is far more important to stop making hay on your land than it is to stop feeding hay on your land. Here are some things to think about.

What Made Sense in 1973 Doesn’t Make Sense Today

Making hay is a whole lot more expensive than it used to be. This table compares input costs for making hay in 1973 in contrast to 2013.

 

All of the input costs have increased at a much faster rate than the value of beef cattle, lamb, or milk. To be on par with costs experienced in 1973, fed cattle should have been $284/cwt, not the $148 they were.

Hay = Inexpensive Fertility

While making hay is expensive, in much of the US, hay can be bought for less than the cost of production. When you buy someone else’s hay and feed it on your property, you are buying their fertility at a highly discounted rate. In some years in some locations, you can buy beef cattle hay for less than the fertilizer value it contains.

This is a great opportunity for improving your land in a way that also benefits soil health.

Feeding Uniformly is the Key

The key to soil improvement is to get the hay fed uniformly over your pastures. This is how you can realize the greatest benefit from purchased hay as a planned fertility input.

Large round bales are still the norm in much of US cow country. Round bales can be unrolled with relatively low-cost equipment. Bales don’t unroll uniformly all the time, but the subsequent manure distribution is way better than feeding bales in ring feeders.

Big square bales can be flaked off easily in a systematic way to cover a specific area with each bale fed.

Bale processors are expensive pieces of equipment. If you are invested in something like this, make sure you are feeding all of your hay to optimize the distribution of manure across the pasture.

We need to be thinking about how much nitrogen and phosphorus is in each bale we are feeding so we can plan our daily feeding to apply appropriate levels of nutrients rather than feeding too little and not realizing the benefit we expected or feeding too much and overloading the soil and environment with excess N. We’ll look at that next week!

Stay tuned! Jim will be covering all the data and math in this series to help us figure out how to do the best we can at improving pastures with hay feeding. If you have questions for Jim, do share them in the comments section below!