Tag Archives: management

Getting Into the Cattle Business: Buying a Ranch and Making it Pay

Solid figures to help me decide whether or not to pursue any land purchases should any come up for sale. Farms in Linn County, MO rarely change hands.

Land & Livestock International, Inc.

By Dr. Jimmy T (Gunny) LaBaume, President & CEO, Land & Livestock International, Inc.

What and Why?

First, do you want to own a ranch or do you just want to be in the cattle business? Did you know that you can enter the cattle business without owning either land or cattle?

"Waiting for a Chinnook" Also known ...
“Waiting for a Chinnook” Also known as “Last of the 5000”

You are already thinking, “This guy has lost his mind!” But seriously, you can. You can lease land and take in pasture cattle–i.e. you can pasture someone else’s cattle on leased land for a monthly per head fee. Once you get a reputation for paying your bills and taking good care of other peoples land, ranch lease opportunities will come to you. You won’t have to look for them.

This is an excellent way for young prospective ranchers to get into the business without having to…

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Compare 2-Year-Olds to 3-Year-Olds

Conventional wisdom from cattle management experts as well as those in the Ag University system insists that to properly develop future cows for a profitable cow herd young females (replacement heifers) need to calve by the time they are 2 years old.  The main idea is to identify those females which are the most fertile and to select for early maturation.  But is that really the way to do so?  And is early maturity a desirable trait?  Consider that most producers (in cattle) are expecting those young females to give birth by what is a comparable human age of 14, gestate, and raise a baby every year thereafter.  Whereas, the 3 year old compares to 18.  Animal Age Calculator

There is also the ‘belief’ (because i’ve never seen any data to support this) that a cow calving as a 2 year old raises one more calf in her lifetime than the older heifers.  I cannot speak to this with my own data since i’ve not been at it long enough to gather data, but i also don’t plan to do the research and have another herd that calves as 2 year olds.  However, I’ve spoken with a few producers who have been doing this for a long time and they are just as convinced that allowing their heifers to be physically mature before calving them allows them to live longer and more productive lives.

My heifers are not exposed to a bull until they are at least 2 years old – actually most are born in May of a year and not exposed until mid-July two years later, so they are actually 2 years and 2 months old and they will calve when they are right at 3 years old the following May.

Although there are several producers who manage their cattle this way, we tend to not be outspoken much for to do so would be to encourage belligerent confrontation or the sorrowful looks to imply that we are just hopeless cases and will never be legitimate or profitable ranchers.

Outside the obvious lifestyle benefits for producer/rancher and the comfort and animal welfare of the livestock, I’ve put together some financial figures which will apply to my ranch and indicate to me that I’ve made the right decision for my operation.

 

Heifer Development Costs
2 year old 3 year old
Value of Weaned Calf  $    630.00 450 lbs  $      1.40
Value of 2 year old  $    810.00 600 lbs  $      1.35
Hay
Pasture Year 1  $    125.00  $    125.00
Pasture Year 2  $    125.00
Salt/Mineral  $        3.00  $         6.00
Breeding Fees
Veterinarian Fees  $        5.00  $         5.00
Supplies
Labor
Interest
Insurance
Taxes
Depreciation
Machinery
Bulls  $      40.00  $      40.00  per head
Costs  $    153.00  $    281.00
Total Cost  $    803.00  $ 1,111.00
Conception Rate 70% 96%
$1147.14  $ 1157.29
*PPI 70 50 days
Calving Assistance 18% 0%
2nd calf conception 70% 96%
Advantages:
Manage growing, breeding, gestating, calving heifers as one mob with cows
Older Heifers are physically and mentally mature with no special feed requirements
Observing older cows calving seems to teach the heifers what to do
Less than 1 % calf death loss
Calves at least 50 lbs heavier at weaning and can be weaned with the cows’ calves
No special treatment

*PPI – post partum interval – the number of days it takes for the female to recover from calving and becoming pregnant again.

The calving assistance and pregnancy rates are taken from various University research data over decades of record keeping.  Most research heifers are developed with considerable grain and feed inputs which incurs more costs including labor.  However, my comparisons are grass and forage only.  Therefore it is likely that the grass managed 2 year olds could be significantly higher open (not bred) percentages than what is illustrated here.  Whereas the 3 year old development percentages are actual from my ranch.  My grass managed 2 year olds were only 10% bred!  Ouch!

WOTB – Working on the Business – tweaking the plan to discover a bit more opportunity for profitability in ranching.  Margins are too thin for my hobby level of ranching, but trying to do my best.

Cheers!

tauna

heifersIMG-3631

IMG-3629
The red heifer in the middle with the black ear tag is a coming 3 year old expecting her first calf while the two red heifers to the left of her are long yearlings (about 1 1/2 years old) and will be exposed to the bull in mid-July.  The black cow to the right is much older – as you can see the coming three year old exhibits nearly the same maturity.

IMG-3631 (1)

 

 

 

The ‘Simple’ Life?

There seems to be a resurgence of retirees wanting to get back to a ‘simple’ life of growing their own garden and/or raising their own animals for food, milk, and/or fiber.  Interestingly, it also seems to attract the young set as well with high hopes of being self-sufficient on the land.  Nothing wrong with those ideals, but our American culture and requirements are different than what they were 100 or even 50-60 years ago.  Many of our expenses are out of our control (health insurance, liability insurance, our reliance on electricity, phones, internet, medical expenses are out of sight, vehicles, petrol, etc, etc), so the ‘farm’ whether it is a hobby size or much larger needs to not only cover these expenses, but operating expenses as well.  In other words, one must turn a profit to be sustainable.  Don’t forget that ‘simple’ certainly does not mean easy.

I’ve blogged on this before, but one thing that is a killer to many striking out in an agrarian lifestyle is to get FAR TOO MANY irons in the fire.  Focus on what you like to do and that which will also turn a profit quickly.  After you become financially successful as to being out of debt and putting away a bit of savings, find other ‘holons‘ which will complement or add value to the core activity.  Don’t be distracted by get-rich schemes – they do not exist in agriculture.  If you have a town job – hang on to it until the farm is a going concern.  Doing both is hard – no doubt – but staying out of debt is tantamount to being successful.

This type of operation is typically termed ‘holistically managed’ and there are resources to help you determine a course of action.  Our first introduction to this type of thinking was through Holistic Management Resources now known as HMI, Holistic Management International.  This link will take you directly to some free downloadable planning tools and and teaching materials.  Allan Savory and his wife, Jody Butterfield, started HMI, but have now moved on to start a new organisation called Savory Institute.  The Savory Institute website has numerous videos and papers for your perusal.

Considerations:

Marketing – where will you sell your product?

Equipment – how much will the initial investment be?  How often will it be used? Does it have multiple uses?  How can you make money with what you already own?  If there is equipment you don’t use, consider selling it.

Time – when will the cash start flowing back to you?

Weather – Ag enterprises look so easy on paper, but consider that you have no control over the weather and inclement extremes can bring diseases in both plants and animals as well as drought and flooding, damaging hail can destroy thousands of acres of crops in just minutes.  Be prepared, both financially and mentally, for complete failures and steep market price declines.

Government – you also have no control over government policies as it picks winners and losers.

Don’t spread yourself out to a lot of enterprises – especially those that are not related – you’ll be exhausted all the time and seldom see a financial reward.  Also try to purchase multi-purpose equipment.

Learn from others’ failures, mistakes, and accomplishments.  Your situation may be different, but there is no use setting up the same hurdles others have taken down.  Some practices simply DO NOT WORK in some or all locales and situations.

Hindsight, of course, is much clearer as to making business decisions, but there are basic principles to be followed.

What is your dream job/career/life?  And how are you moving towards it?  Have you already experienced your dream job and found it wanting?  Why?

Lambing out of season!  Bad, bad mistakes.
Lambing out of season! Bad, bad mistakes.
Calving out of sync with nature - expensive!
Calving out of sync with nature – expensive!
Cattle chopping ice
Chopping ice in the winter is oftentimes a necessary job.
countries 2 001
Unfortunately, livestock dies, in this case just an accident. Found her dead. So discouraging……!
photos yesterday 005
Rappelled down a 25 foot bank to this calf, then laid out flat across the mud to reach it with a log chain which i wrapped around its neck. Chain wasn’t long enough to reach back up to my Gator, but thankfully, I had this 30 foot horse lunge line with me. Pulled the calf up and out. It survived and was sold here a couple weeks ago!