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April 12, 2018
Recently I received an email question regarding culling procedures when reducing cow herd size. The questions were good; but, not knowing, I wondered if the most important questions had been considered before the emailed questions were sent.
The producer was planning on terminating the lease of a summer pasture because of wolf depredation. My first question was, “How serious is the problem and is the proposed solution focused more on convenience or profit?” Please don’t get me wrong. Wolves can be a horrific problem, but many ranchers are learning to live with it—although usually unhappily.
The next question that came to mind was, “Have the economic consequences of reducing the herd size by more than 25% been thought through?” I am not suggesting that they had not, but too often we ranchers make changes to solve a problem and, in the process, create another.
In this case, giving up a significant piece of summer range and avoiding wolf depredation will most assuredly remove some seasonal costs and much aggravation and should improve weaning percentage, calf and yearling growth rates and cow herd rebreeding rates.
However, a herd size reduction of more than 25% will certainly lead to a reduction in revenues in the years following the herd reduction. Costs will need to be reduced significantly to keep net income per animal unit the same; AND, even then, whole ranch net income will be significantly reduced unless costs are cut even more.
Most of these cuts will have to come from reductions in overheads. You will naturally eliminate the costs associated with the lease; but what about labor, equipment, facilities and tools? Can labor costs realistically be reduced, remembering that much of the labor cost comes from their on-ranch transportation, housing, horses, tools, etc.? Can you eliminate some pieces of equipment or buildings or other facilities?
Most ranches have plenty of overheads, but reducing them becomes emotionally difficult. Are you going to fire your children who were hoping to come back to the ranch? Are you going to get a day job so you won’t have to take as much out of the ranch income for family living?
I only know one other thing about this ranch—they are calving in February and March with some good reasons. I haven’t nearly enough information to know how well they have evaluated the entire situation. I am using this example only to illustrate how we can come to bad conclusions if we aren’t wearing our “systems thinking” hats and making good holistic decisions.
Using this as a type of problem that could fit any of us, let’s look at some possible solutions for either of the choices. If, after careful analysis, the decision is to keep the summer lease, you might work on animal handling skills which, in conjunction with the presence of wolves, might reawaken the herding instincts of the cattle. A herder might be used to reinforce the herding habits and to let the wolves know there is some danger for them. I know these methods are being used with varying degrees of success.
If the lease is to be discontinued, I will assume the remainder of the available land is or has been used for both grazing and hay production. A number of options could be considered:
The money saved by giving up the lease could be used to purchase some or all of the required hay. The purchased hay would bring back some of the lost carrying capacity.
Perhaps haying could be discontinued. Then all haying equipment could be eliminated. If more hay were needed, it could be purchased using some of the savings from not owning or operating haying equipment. This will restore some more of the lost carrying capacity. Grazing land that had previously been used for hay production will also provide more carrying capacity.
Calving season could be placed more in sync with nature by moving it to start in late April or early May. This will save even more winter feed because the highest nutrient requirement of the cow will more closely coincide with the growth and quality of the grass.
With cattle located closer to home, grazing management could be improved and yield a good improvement in carrying capacity. Time that was previously spent on the summer lease and/or putting up hay could now be spent on significantly improving grazing management.
When the number of cows to be culled is finally decided, you might reduce that number a little by culling (or we should say marketing) the largest cows. Remember, you can run more small cows than big cows on the same acres.
Most of the big decisions we make are not easy. However, the difficult part is trying to account for all the moving parts and seeing potential opportunities. With that done, calculations are fairly simple and don’t have to be highly accurate to yield a good solution.
It’s not so difficult to accept new ideas. It’s giving up the old ideas that’s hard; and failure to do that keeps us from trying the new ones.
Burke Teichert was born and raised on a family ranch in western Wyoming and earned a B.S. in ag business from Brigham Young University and M.S. in ag economics from University of Wyoming. His work history includes serving as a university faculty member, cattle reproduction specialist, and manager of seven cattle ranchers for Deseret Land and Cattle.
Teichert retired in 2010 as vice president and general manager with AgReserves, Inc., where he was involved in seven major ranch acquisitions in the U.S. and the management of a number of farms and ranches in the U.S. as well as Canada and Argentina.
In retirement, he is a consultant and speaker, passing on his expertise in organizing ranches to be very cost-effective and efficient, with minimal labor requirements. His column on strategic planning for the ranch appears monthly in BEEF magazine.
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