Tag Archives: management

Tradition vs Innovation Paradox

Another great blog from Ranch Management Consultants (Ranching for Profit).  If what you are doing regularly is only a tradition – start questioning why you continue and if the practice is still effective for today’s economy, whether for your home or business.

sunset cowboyAgriculture is steeped in tradition. These traditions serve as a source of pride and continuity which help make us who we are in agriculture. However, these same traditions create a paradox of sorts when it comes to managing the business of ranching. Balancing respect for traditions and fostering innovation can be tricky to navigate. Another complicating factor in ranching is that business leadership is often slower to transition than most. Generally this is because the decision making is in the hands of a generation that would have retired 10-20 years ago in any other industry. This generation is often making decisions from a place of risk minimization … rightly so from their perspective. However, when Junior is wanting to expand the business to support a growing family this can pit two very different business strategies against each other which often creates conflict on the family ranch.

I think there are some traditions on a ranch that need to be challenged to position the ranch to be successful in the coming decades. Each operation will need to find its own balance between tradition and innovation. Having clear goals will help determine the appropriate balance of risk management and growth strategy for the business.

Below is a short list of common ranch traditions that I suggest you look at and examine why you are doing what you are doing, then put some numbers to what it might look like if you did things differently. I’m certainly not suggesting everyone must change these traditions but have a discussion with your team about the pros and cons of staying the same or changing.

  • Grazing management
    I see far too many ranches where tradition determines the grazing plan rather than good planning. Effective grazing management is one of the most powerful economic levers you can pull. Does each pasture get adequate rest for plant recovery after every grazing? Are your animals in a pasture long enough to allow a second bite? I have never visited a ranch that couldn’t improve their grazing which would allow the ranch to increase carrying capacity, often as much as doubling historic stocking rates, while still improving the condition of the land. Often the driving force for not improving grazing practices involve hanging on to old traditions. Many equate better grazing with more fences or more work. Neither of these must be true.
  • Needing lots of stuff to ranch
    Here is an interesting thought experiment. Make a list of every piece of equipment on the ranch and what it would be worth if sold today. Total up the dollars and now pretend you have that money as cash in your hand and you have no equipment. Paint a picture in your mind of the type of business you want to build. Now, ask the question, “How would we best deploy the capital we now have to create the business we want?” Would you spend it all or save some for a cushion? When times are good on the ranch, we often fall into the trap of upgrading tools that make our lives easier. It is very difficult to go backwards in creature comforts once we step forward. However, from the numbers I’ve seen it is the rare piece of equipment that creates more cash flow than it costs in depreciation and repairs. Tradition might lead us to believe that we need all this stuff to ranch, but economics might be telling us that all this stuff is part of what makes ranching so financially difficult.
  • We should be running cows
    But we have always run cows! What is the purpose of your ranch? Is it to create opportunities for owners to do the things they enjoy or is it to create cash flow and profit to support the owners and provide opportunities for others? Might these two things be in contrast? I’m not saying you can’t run cows and be profitable, but often I observe ranchers who see no other alternative to the current enterprise structure on the ranch. I also don’t believe it is a problem if ownership sees the ranch as a place to allow them to do the things they enjoy – such as running cows. I do see a conflict when the ranch isn’t creating the outcomes required and people are unwilling to look beyond traditional enterprises. Might it be that the ranch could be an even more enjoyable place if it were highly profitable?

Following that line of thought, what other traditions should be challenged on your ranch? Which traditions must be held on to? There are some traditions that are core to who we are, let’s be sure we don’t jeopardize those in pursuit of profit. Balancing the paradox of tradition and innovation is part of what makes this business so interesting.

777 Bison Ranch

So, the short story is that an awesomely talented and accomplished woman, Mimi Hillenbrand, has for some years owned and managed the 777 Bison Ranch in South Dakota in a holistic manner vis-à-vis that which is promoted by the Savory Institute or Holistic Management International.  Bison on an open ranch of thousands of acres requires a bit different approach to grazing pressure and rest to improve the soil health and forage quality/quantity.  It was very interesting to hear how she handles the animals.

These past few years, she purchased a smaller property in Chile she named 45 South to not only improve the pastures, (though using cattle this time) but also just to really enjoy the beautiful scenery and to live in a completely different culture –at least part time.

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Mimi provided hand made empanades for lunch!
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A huge tray of them!
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It will take more years, but with managed cattle impact on the land, improvement can already be measured.
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Properly managed livestock impact is critical to healing the land.

Fundo Panguilemu, Coyhaique, Chili

I cannot do justice to the sweet hospitality of this young family.  Our Savory Institute journey group is here to learn about the improvements they have experienced using the holistic management techniques.  The grass is thick, lush, and tender – rested paddocks are ready for consuming.

 

 

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Regenerative farm owner and operator, Jose,  (who is also a holistic management instructor) gave us an excellent overview on how they’ve managed their farm and improved the sward and healed the soil substantially in only 6 years using managed grazing of cattle and sheep.
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No bare soil in this thick sward.
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Thick stand of grass after 45 days rest.
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Elizabeth, also owner of the farm and a holistic management instructor keeps all the balls in the air on this stunning cattle and sheep farm/pastured egg laying/horse trekking/firewood gathering/wildlife viewing/fly fishing/mountain biking/yurt accommodation/HMI training site.  Oh, did i mention she also is raising 2 wonderful little children as well as training interns who show up from around the world to help on the farm?
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How about a unique stay on a working farm?! And talk about a view!  Excellent fly fishing available here on the edge of the Simpson River.  Contact Elizabeth at Fundo Panguilemu.
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Lookout Paddock provides excellent overview of paddock layout.  Note cattle and sheep grazing in lower left paddock.
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For my Missouri friends, you will be surprised to know that many of the grasses and forbes are the same as what we graze.  This is a photo of the rose bush that we also have growing, but no multiflora rose here.

Top 5 Business Management Actions on the Farm/Ranch

This reblogged from Ranch Management Consultants.

Top 5 Business Management Actions on the Farm/Ranch

by Dallas Mount

As we wrap up 2019, I want to share with you what comes to the top of my mind as actions that farms and ranches take when they are serious about their business management. If you are hitting the mark on these, well done! If not, then what will your strategy be to improve in 2020?

1.Effective Communication –
Have regular WITB (operational) meetings and WOTB (strategic) meetings. For WITB they should be brief, focused and end with something written down in a visible spot, listing who is doing what by when. For WOTB meetings they need to be focused with limited distractions, allow for creative thought, be inclusive and also end with an action plan.

2.Clear Roles and Accountability –
Are all the roles of your business being filled? Is ownership clearly setting the mission and vision? Is management developing plans that include strategies with contingencies and communicating those to everybody? Is labor effectively balancing all the duties and working with the end in mind? Most farms and ranches are owned and labored while few are effectively managed.

3.Plans Developed and Communicated –
Does your business have the following plans written down:
Economic plan showing the projected profit for the coming year.
Financial plan which shows the projected cash flow for the coming year.
Grazing plan that shows where the animals will be, for how long, planned rest periods and planned stocking rate.
Disaster plan for drought, fire, blizzards, or floods.
Organization structure listing who is responsible for each aspect of the business.

4.Professional Development – What is the plan for the coming year? What areas does the business need training in? Each key person should develop their own professional development plan for the coming year and get buy-in from the business leadership.

5.Healthy Balance of Work and Life – If you are spending all your time putting out fires in the business something has to change. Sure, we all go through periods of super-human effort, but if this is the norm it isn’t sustainable. If you want different results, you must take different actions.

From all of us at RMC, thank you for your support over this past year. We are so blessed to get to work with some of the best people in the world who are taking care of God’s creation and feeding the people.

Best wishes for a joyful and prosperous 2020!

 

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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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Cheapest Ranch You Can Buy Part 1

Written by my friend, Jim Gerrish, for Beef Producer magazine:  This is Part 1

What is the Cheapest Ranch You Will Ever Buy?

Cows grazing Nebraska SandhillsAlan Newport
Changing the way we graze can dramatically alter the value and production of a ranch.

What is the cheapest ranch you will ever buy? Part 1

The value of grazing management cannot be overstated, author says.

Jim Gerrish 1 | Aug 09, 2019

Whenever a group of ranchers get together, sooner or later the conversation will turn to whose place just got sold and what did it bring. There will be some head shaking and bemoaning how you just can’t afford to buy another ranch or help your kid get started on a new place.

In much of the country, the price of ranch land is driven by non-ranching factors. People are paying way more for the recreational value or the view from the ranch than what livestock production can afford to pay.

There generally is a common-knowledge guide for how many acres it takes to run a cow in any neighborhood. Most people seem to believe this is a predetermined stocking rate that is determined almost entirely by the amount of rainfall received in any given year. The truth is, environment determines only the upper limit of the carrying capacity potential of a ranch. It is the ranchers grazing management that determines how much of that potential is actually realized.

The plain and simple truth of the matter is most ranches in the US are managed in a way that generally captures less than half of the biological carrying capacity of the ranch. The two primary ingredients for producing beef are sunshine and water. Most ranches are ineffective at harvesting these two “free” inputs. While sunshine and rain water are free ingredients, the landscape we use as our solar panel and water catchment is not free.

If we decide we need to increase the beef output on our ranch by 40% to generate the revenue flow we need to make a living, how might we go about doing that?

One obvious way is to buy another ranch that is 40% the size of our current holdings. If our current ranch is worth $1,000/acre and we have 1,000 acres, we would need to buy 400 more acres at $1,000 to get 40% more grazing capacity. That would be $400,000 outlay, plus there would be closing costs, an increase in taxes, and so forth.

The failed approach the ranching industry has taken has been the quest to increase output per individual cow by 40%. Rather than having cows that wean 500 pounds, let’s have cows that wean 700 pounds. The number of articles published in the last five years showing the folly of this approach is astounding. Go to the winter cattle production meetings and every one of them seems to feature a university researcher now showing big cows decrease ranch profitability, not the other way around.

A less obvious way to increase stocking rate is to get 40% more production out of every acre we currently own or control. Unfortunately, a lot of mainstream ranchers can only think of adding irrigation or more fertilizer or tear up the native range to plant some foreign wonder-grass. Is that really all we can do?

What if we found a way to capture more solar energy and water on every acre? How could we do that and what might it cost?

Let’s step back and ask why are most ranches operating at less than 50% of their biological carrying capacity? The simplest answer is there is too much bare ground. Bare ground doesn’t capture solar energy and make cow feed. Bare ground allows water to run off or set on the surface and evaporate. Why do most ranches have too much bare ground? Because cattle stay too long in the same place and pasture and rangeland are not allowed adequate recovery time to maintain plant vigor.

In 40 years of commercial ranching and grazing research I have learned the primary determinants of range and pasture productivity are:

  1. The amount of time stock are allowed to be on a particular piece of ground
  2. The time allowed for recovery

That local common-knowledge guide for how many acres it takes to run a cow is fundamentally flawed because it is based on management that completely ignores the role of time management on the nature of our soil health and plant community.

For the last 50 years the ranching industry and community focused on the animal and animal genetics, which misses the point that it is the land base controlled and the productivity of that land that drives ranch profitability, not individual animal productivity.

On a commercial ranch, most of our production costs are land-based costs, not animal-based costs. This is the reason why increasing the productivity of an acre of grazing land by 40% will always have much more impact of bottom line profitability than will increasing individual cow productivity by 40%.

Next week: Learn how to get that ranch production increase of 40% or more.

Gerrish is internationally known grazier, grazing consultant and consultant. Find him at http://www.americangrazinglands.com.

 

Genetics and Selection

There are very few reasons for mobs of livestock to have access to ponds beyond and emergency drinking water access. My reason here is that these heifers needed to be separated from the main cow herd for the 45 day breeding season and the only paddock I have does not have shade or even a high point to catch a breeze such as the pond dam where the heifers in the second photo are standing.

Ideally, allotting short term adequate shaded space is the optimal.  Video below shows comfortable cows and calves.

In many cases, cattle not selected for heat tolerance will immerse themselves in a pond for relief. The flip side is that oftentimes these cattle will tolerate severe cold better than the others. We can spend decades selecting for the genetics which thrive in each of our unique environments and management. Hopefully also providing a quality eating experience for the consumer.

This is a jarring photo and i hesitate to post it, but reality is, we don’t live in a perfect world and sometimes we make do until improvements can be made.  These purebred Angus heifers can’t tolerate much heat and humidity and stand in the pond. Not healthy for the pond or the cattle.
These heifers have up to 50% genetically selected heat tolerant breeds of either Longhorn or Corriente crossed with black or red Angus. Clearly more comfortable in Missouri heat and humidity.