The Bigger is More Profitable Myth

There is a commonly held opinion within the cattle industry that ranchers need to raise bigger calves to be profitable. Is this opinion fact, or is it a myth?

When I checked the market prices at Amarillo, Texas tonight, 700 pound steers were bringing $145 cwt while 500 pound steers were bringing $187 cwt. This meant (that at least on this day) a 500 pound steer was actually worth $65 more than a 700 pound steer. In reality, that 700 pound steer is costing you more than the $65 difference in market price per head.

The average amount of feed to maintain a cow (depending on whether or not she is lactating, and what trimester of pregnancy she is in) will ranch from 2.5% to 3.5% of her body weight. For the purpose of keeping the numbers round, I am going to use an even 3%.

A 1,250 pound cow will have a daily feed requirement (1250 X 0.03) of 37.5 pounds of feed. This comes out to 13350 pounds of feed per year to raise that 700 pound calf.

A 700 pound cow will have a daily feed requirement (700 X 0.03) of 21 pounds a day, which comes out to 7665 pounds of feed per year.

By dividing the difference in the amount of feed needed to maintain the 1,250 cow by the amount needed to maintain the 700 pound cow, we find that you can actually run 1.78 of the 700 pound cows on the same amount of forage as it takes to run one 1,250 pound cow. This equates to running 178 cows raising 500 pound calves on the same amount of forage as it takes to run 100 of those soggy 700 pound calves. So just how much more money can your ranch bring in with the more moderately framed cows?

Based on the above market prices, you will make $6,500 more per 100 calves on those 500 pound calves. However when you add the additional 78 calves you would raise, this adds another $72,930 which brings the total to $79,430. When you take into account the extra vaccines and wormers you will need, the total will drop a little, but you would still be putting more than $70,000 a year into your bank account on the same amount of feed and forage.

For information on my services, visit NaturalCattle Handling.com If you would enjoy a laugh or two, take a look at my cowboy humor and cookbooks at the 2lazy4U Livestock & Literary Co.

Grass fed vs Grain Fed

There is a lot of debate on grass fed vs grain fed beef. It has dawned on me, that while everyone is posting their "facts" on the issue, that some very important information is being ignored. That information happens to be the yield grades being compared and the genetics which results in them.


When comparing the health differences, are researchers are comparing A yield grade 1 or yield grade 4 against the grass fed beef? In comparing the time to finish, are they comparing a grass fed steer which would finish on grain at a grade 4 against a grain fed steer which is finishing at a grade 1? 

A yield grade 1will have marbling, but much less extra fat than a yield grade 4 making the yield grade 1 a healthier product. Cattle finishing at a yield grade 4 generally have genetics which take longer to get marbling. This means that the "facts" in the debate can be misconstrued by researchers stacking the data by comparing against  different genetic types.

You want to stack the data to show how much healthier grass fed beef is over grain fed? Compare and Angus grass finished carcass against a large , fatty, yield grade 4 carcass. Want to stack the data showing how more efficient feeding grain is? Compare times to finish that animal producing the yield grade 4 carcass against the Angus steer finished on grain.

When gaining information between feeding methods, unless the genetics are taken into consideration, the results will not be accurate. Either side of the grass fed vs grain fed debate can use genetic differences in stacking the data in their favor. Until such time as there is a study comparing cattle with the same genetic tendencies towards marbling and body fat, neither side of the debate can give an accurate report to the consumer about efficiency or health.

Adjusting Today's Prices

Nearly everyone is happy about record high cattle prices. A lot of investors are looking at cattle as a "good investment" right now. However when you really look at input costs, you are receiving less for calves today than you were in the late 1970's

In 1979, I worked for a rancher who sold his calves for $125cwt. At the time, a new four wheel drive pickup was about $10,000 and a "high paid" cowboy made $500 a month and beef. Day work was expensive at $50 a day. Hay was roughly $45 a ton and gas was well under $2 per gallon.

Today's calves are bringing roughly $58 per cwt more, less than a 50% increase. Many cowboys are now starting out at $1,500 a month, or three times higher. Day labor has doubled at $100 a day. That four wheel drive pickup now costs $40,000, or four times as much. Hay costs over a $100 a ton (more than double) and gas is getting close to $4 a gallon and in many places, diesel is already over $4 a gallon (again, doubled). This does not take into account not only higher land prices, but higher property taxes as well. This means, after figuring input costs, your cattle are actually worth less than they were in 1979. If cattle were even keeping up with labor costs, today's calves should be bringing $3.75 cwt.

I can think of a number of things that 90% of cattle operations today could do to lower input costs. Most of these ranches could do to increase stocking capacity and the total pounds of cattle shipped from their ranch while lowering input costs. What are you doing to increase the efficiency of your cattle operation without increasing your input costs?

Can You Afford To Burn Money?

I know of very few people who can afford to burn hundred dollar bills ten at a time, but many ranches tend to do just that every time they work cattle. This seems to be especially true on desert ranches where time is spent, not in the cattle, but constantly checking waterlines.

This past week I day worked on a local ranch which I've worked on before. Cattle are scattered out in groups of a hundred to two hundred per pasture, with the average pasture size around two thousand acres. If the cattle were ridden through even once a week, and handled with reduced stress methods one person could gather the cattle into the pens with no help, and a crew of four or five could get done with the sorting, branding, vaccinating and castrating fairly easily.

As these cattle only see people horseback when they are going to the pens to get worked, they are not only trotty, they have no intention of going into the pens. Since it is a known "fact" that the cattle are going to be hard to handle the crew grows to nine people, or an extra four or five hundred dollars a day.

Finding cowboys to work for day wages is hard. Finding cowboys that work for day wages who also work cattle in a reduced stress manner is next to impossible. As a result, when the cattle start getting leery of the pens, rather than back off and keep them quiet, the charge is on to get them into the pens as fast as possible. The pressured cattle wind up running off and in the ensuing stampede, calves have more stress related shrink, which winds up in higher than necessary morbidity and mortality rates. It also results in having to go back out to the pasture and roping calves that got away. At today's cattle prices this is costing in the neighborhood of thirty dollars per calf, or burning thirty one hundred dollar bills for every hundred calves you wean.

This week the ranch I worked on, between having to hire extra help, and their methods basically burned two hundred and five, one hundred dollar bills. If this isn't burning enough money, the cattle we worked this week is only one third of their herd, so between weaning the three groups, they are burning six hundred and fifteen of those one hundred dollar bills a year on weaning alone. Add a third that much shrink loss during branding and you are looking at over eighty thousand dollars a year going up in smoke.
Even including all related expenses, paying a cowboy thirty thousand dollars a year would save this ranch a minimum of forty thousand dollars a year. However the mentality seems to be that if a person is horseback in the cattle they are not "getting anything accomplished."

If you are tired of burning hundred dollar bills, and would like to learn more about reduced stress cattle handling, click here.

US Forest Service to Sell off 193 Million Acres

The National Forest Service has announced plans to sell off its 193,000,000 acres of federally owned land. Government attorneys have argued that precedence for federal ownership of land has been set, showing the federal government has the authority over these lands. We can show that the precedence used to prove the legality of federally owned lands was flawed by asking one simple question:

Why did the federal government adhere to the stipulations of Article 17 under the Powers of Congress in all statehood expansion east of the Mississippi River?

For those of you not familiar with this section of the Constitution, it says:

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;

The precedence set of allowing territories to become states and NOT withholding large tracts of land east of the Mississippi River would indicate that the federal government is NOT allowed to hold interest of large tracts of land within a state.

The fight needs to be taken to the federal government on a three pronged attack. First disprove that the precedences used to support the government's claims that federally owned lands are legal. Secondly it needs to be pointed out to the Supreme Court in (historical terms, not legal) that the founders of our country, and the drafters of the Constitution were trying to create a government which would not own large portions of the country. The third prong of attack is using someone who is versed in the English language at the time the Constitution was written to describe what the article means in today's language.

By approaching the matter in this way we can prove that the government was acting beyond its authority when it withheld lands from the territories when granting statehood. That precedence used showing the federal government has the authority to control multi-use or recreational lands was false. It will also show that the intent of Article 17 in the Powers of Congress section was purposely written to prevent federal ownership of land.

In actuality, this proposed sale could prove to be an opportunity. The attorney generals of every state having USFS or BLM controlled land should be banding together on this fight. These states should be suing to have all land held by the federal government, falling outside of Article 17, returned to possession of the states. This would allow states to receive the income now going to the federal government for grazing, mining,logging and National Parks.

If you would like to read exactly what the powers of Congress are, click here!

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!