Recently my wife and I had opportunity to attend a talk given by Kit Pharo.
He suggests that "low input" ranching has more potential to be profitable than
does ranching with higher costs of production. The talk was interesting and
informative, and the concept works for him. However, after much head scratching
and pondering, I am not quite willing to give up many of the standard traditions
which we presently employee in our ranching.
Kit infers that he can raise a calf for $270 per year, and any money over and above that figure is profit. That may work in his Colorado country, but it doesn't here in the Nebraska Sandhills. For starters, the going rate for summer pasture in this area is $30 per pair (cow and calf) per month. Whether a rancher is putting out cattle by the month or taking them in, this is an "opportunity cost" that must be considered. As summer should be the cheapest time to run cattle, the other months are understandingly more expensive. By using the $30 per month figure and multiplying this by twelve months in a year, it looks like the very minimum cost per cow per year would be $360. This doesn't include any other expenses such as taxes, fencing and windmill upkeep, pickup repair, machinery costs, salt and mineral, etc.
The Pharo philosophy maintains that a 50,000 pound pot-load of 400 pound calves is worth more dollars than a 50,000 pound pot-load of 600 pound calves. This could be debateable. A small-framed calf weighing 400 pounds might be at the same stage of his life as is a moderate-framed calf at 600 pounds. There might me less growth potential on the small-framed calf than there is on the bigger-framed 600 pounder, and consequently not as efficient and as good an investment as the bigger calf.
As a rancher that puts out cattle by the month, I get more bang for the buck having a larger cow nursing a larger earlier calf. Pasture rates seem to be the same regardless of cattle size. It seems to me that a calf born on March 1st will weigh substantially more by October 15th than will a calf born on April 1st weighed on November 15th. This is considering that both examples are still sucking their mothers by the fall weaning dates. A May 1st calf weighed on December 15th would not even be in the ball-park. I think it has to do with the earlier calf being more adapted to grazing the summer grasses, and the fact that the pastures dry up and are of poorer quality in the fall.
In these days of fairly cheap interest on money borrowed from financial lending institutions, fast turn-over is not as important as at other times. In times of high interest, the quicker a person can retrieve a pay-check from their investment the better. In other words, a big calf for sale at weaning time can sell well and bring in optimum money. A May or June calf would have to be held over until the following year before there is enough weight to sell for many dollars. Consequently more interest owed is a negative on the bank statement.
My philosophy is to always keep my cattle "saleable." In the low-input system, there is much of the year when the cows are just barely getting by and are too thin to be of much value to a potential buyer. In the event of a bad winter, this thin condition could be life-threatening. I figure that if at any time my cows are worth top dollar to a potential buyer, they are also worth that to me.
Kit says that if a person makes ranching easier, there is more time to spend at the coffee shops (or maybe piddling with the "bull session" on the internet, lol!). Soon the coffee shops and the bull session will not be exciting enough, and the bored person will be finding thrills at a local casino. Next thing you know, the ranch will be gambled away, and it won't matter what size of a calf you raise. Maybe it is more desirable to stay busy in the first place, spend time in the calving barn, and try to raise the biggest meatiest highest quality calf you can, then sell it for the most money available. These are just some thoughts in trying to justify all the "mistakes" I've been making all my life. Cheers.
Copyright © 2005 Steve
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