Friday, December 24, 2010

Evaluating Our Management

It is that time of year again. No, I'm not talking about Christmas. It is the time of year that all of the trade publications are encouraging you to re-evaluate your management and pay your dues to the cattleman's associations. I think it is not only time to re-evaluate your cow herd management, but to also evaluate how these publications are suggesting we manage our cattle.

The sustainability of any cattle operation is dependent upon profitability. Nearly anything we do to increase income seems to involve putting money out to accomplish. As an industry, we have acquired a mindset which dictates we must spend money to save money. This is a mindset which we need to get away from. There are too much of what we are doing as an industry which are adding to operating expenses which we take for granted as being necessary could be changed.

The educational system doesn't help. Rather than giving advice as to reducing costs associated with calving January to March, they give advice on how much feed and nutrients cattle need during the third trimester during the holiday season (as in a recent article from the University of Ohio). A study just started this fall at of Nebraska College of Technical Agriculture is examining the difference between calving in September/October vs January/February.

If you have a ranch, or are managing one for someone else, you need to be thinking of two things, sustainability and profitability of the range land and cattle. If you are calving at a time of year that requires you to feed extra hay and supplement to your cattle during the extra trimester, you are cutting into the profitability of your cattle. If you are feeding your calves as well as feeding enough for your cattle to lactate and hold body condition, you are cutting into your profitability. You should be asking yourself why there are no studies being done on timing the third trimester so that cattle are calving on green grass rather than purchased feed and supplement.

Simple logic dictates that calving on grass is less expensive than paying for hay production and extra supplements. Just how much can you save? I have one friend who calved in June/July in western Colorado who didn't feed his cattle at all. I have another friend in Nebraska who changed to a late April/early June calving season and he now feeds 2/3 less hay. Both men weaned at an correspondingly later time, with nearly identical weights to winter calving. How much money would you be adding to your profit line if you could cut your hay bill by 2/3? Could you make even more money by selling the excess hay you have been feeding, or increase the size of your herd with the savings?

Another area in which advice given by universities and publications is pasture management. There are many articles out there which give the benefits of rotational grazing programs, but all of them require intensive labor and monetary investment in permanent and temporary fencing to control grazing. Can we really be more sustainable, or get more profit when we are spending more time and money to accomplish the same task of harvesting grass?

Then we have all of the articles on reduced stress cattle handling. There are two kinds of articles in this category. The first kind are the ones which appear as if they were written from a template. They contain all of the buzz phrases “slower is faster,” “flight zone,” “pressure and release,” then go on to explain the benefits. Yet they fail to really describe how to handle your cattle with less stress.

The other category is people who have no real understanding of how cattle work other than to train them by the Pavlov's Dog method. This method prescribes training your cattle to lead, which of course is accomplished by using feed. This may sound like a good method but it is much like gentling a horse by feeding it, without asking it to do anything. When you get them in the pens and start sorting or working them, like the horse, they may have no fear of you, but they don't have any respect either. The end result is still more stress on the cattle than needed.

Cattle are herd animals. Yet we have been trained over the years to think it is normal for our cattle to spread out across the pasture when we let them through the gate. We have been “educated” to believe we need fences to keep them where we want, and several people to move them. We have been educated on this so much that most people don't recognize actual herd behavior when they see it. In fact this lack of recognizing what a herd looks like is so bad, that I have had people inform me there was something wrong with cattle when I had them working as a herd. Next week I will begin describing not only how cattle act as a herd, but also how to re-establish herd behavior in your cattle.

The final thing I want to touch on this week is the current high market in live cattle. Your banker will be encouraging you to go into more debt for cattle because they are worth so much. Of course this is standard protocol when the market is going up. The problem is that the cattle market is cyclical, which is exacerbated by the global market and whatever flavor of the month USDA comes up with for meat imports. Prices were at or below breakeven for many producers until Canada had a case of mad cow disease. As soon as the access to Canadian cattle was closed, US prices went back up. Despite the current bear market on cattle, I would recommend you resist the temptation to acquire debt to build your herd. In fact, this may be the best time to liquidate your herd to someone who is following their banker's advice. Then you can lease your pastures to yearlings and sell your hay, or lease to pairs where you are guaranteed profitability. By carefully managing your finances, you will be solvent enough to rebuild your herd when the market drops again. When the others are going bankrupt, or getting out of the business because cattle aren't worth anything, you will be able to shift your income from leasing to selling cattle.

Until next week, have a Merry Christmas and think out of the box!