Profit versus production in the cattle business: Part 2

Go to the Animal Science department of your local ag college and they will tell you that your goal should be to maximize animal performance (calf crops, weening weights, average daily gains, etc.)

Then slip on over to the Range Management department and they will tell you that you should strive for maximum “turn off” (lbs of product per unit area of land). 

They are both dead wrong because maximum profits never (in the real world) occur at maximum animal performance or maximum turn-off. (See Chapter 12 of A Handbook for Ranch Managers.)  — jtl

By  via Canadian Cattlemen

calf and cow in a pasture
Photo: File

 

Planned Grazing: A Study Guide and Reference ManualWith the stronger cattle prices we appear to be in a new era in the cow-calf business. This would be an ideal time to evaluate all our management decisions. We have a wonderful opportunity to build more profitable and more sustainable operations.

My first suggestion to help determine calving dates is to look at the wildlife in your area. When do moose, deer, elk or antelope have their young? Most wildlife calve from mid-May to late June. I believe there is a message here. Wildlife calve in May and June for two basic reasons: first, survival of the young is highest then and, second, rebreeding of the females is higher when they calve at this time of the year.Environmental & Natural Resource Economics: The Austrian View

In agriculture we have a long history of trying to dominate nature. Calving date is a classic example. There is no doubt we can dominate nature in the short term. However, it is important to remember that nature will bat last and has very deep pockets. When we try and dominate nature we increase costs and reduce profit.Combat Shooter's Handbook

If we are in business to produce a profit we will want to calve when costs are low and the survival rate of the young is high. Mimicking nature by calving in May and June is likely to lead to our desired result.

The Betrayed: On Warriors, Cowboys and Other MisfitsI think that most of us will agree that a cow needs her best nutrition from the day she calves until the day she is bred. Grass is the most nutritious feed we have. It is also the cheapest feed available. Calving in May and June will help us meet the nutritional requirements of our animals at the lowest-possible cost. This will lead to a high rebreeding percentage. This is important as there is a strong correlation between rebreeding and profit.

The Essence of Liberty: Volume I: Liberty and History: The Rise and Fall of the Noble Experiment with Constitutionally Limited Government (Liberty and ... Limited Government) (Volume 1)  The Essence of Liberty: Volume II: The Economics of Liberty (Volume 2) The Essence of Liberty: Volume III: A Universal Philosophy of Political Economy (Liberty: A Universal Political Ethic) (Volume 3) Calving earlier increases feed costs. It is also likely to increase the cost of feeding the feed. Despite our higher feed costs rebreeding rates may also suffer. Clearly these higher costs have the potential to lower profits.

Now let’s consider labour and investment costs as related to calving dates. Both will be lowest with May/June calvings. Some of you may be concerned with having your cows calve without constant checking. For a cow to have a calf is the most natural thing in the world. Our job is to provide adequate nutrition, easy-calving bulls and a natural environment for the cow. When these conditions are met we might be best advised to get out of the way and let nature take over. Perhaps the less management we provide the more profitable we will be.

Calving earlier will increase both labour and investment costs. One of the keys to having a profitable cow herd is to have a low investment per cow. Any infrastructure associated with calving will increase our investment per cow.

Marketing at a particular time or producing a certain weaning weight might be another reason to calve early. Here again we can do a financial analysis of our business. For example, if you want to market 800-pound calves is it more profitable to calve early and sell this weight of calf at weaning? How would later calving and backgrounding to reach 800 pounds compare? Which might be more profitable?

I would like to share a couple of stories. Hopefully they will challenge your thinking. The first one is some work done many years ago at one of the research stations in Western Canada. The idea was to compare calving in February and April. Two similar groups of cows were calved out. The calves were weaned and sold on the same day in Oct. The conclusion was that the February calves made more money. This conclusion was correct. What was completely overlooked was the extra cost of calving in February. There was also no mention of how the two groups rebred. This is a classic example of the production paradigm as compared to the profit paradigm. The production paradigm has been strongly encouraged by agribusiness, government and extension services. The production paradigm may serve agribusiness. It does very little for the primary producer. At our level profit is king. Production is secondary.

My second story is about a young person who has recently graduated from university. He has landed a job as a feed salesman. While travelling in his area he meets an older farmer who lives well off the beaten track. He is not very progressive by the young man’s standards. But when the young man stops to visit he sees pigs of all ages and sizes everywhere basically running free. The young man suggests to the older man, “I think I can figure out a ration that will get your pigs to market sooner.”

“Really,” replies the older man. “It’s OK by me, please figure it out.”

In two weeks the young man returns. He excitedly explains to the older man how if he will just pen his pigs and buy some feed from him his pigs will get to market two weeks sooner. The older man thinks for a moment or two and replies: “You might be right sonny. But what is time to a pig?”

I wish you success in building a profitable business. Remember, to improve we have to be willing to challenge the status quo. Happy trails.

Don Campbell ranches with his family at Meadow Lake, Sask., and teaches Holistic Management courses. He can be reached at 306-236-6088 or by email.

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A Handbook for Ranch ManagersA Handbook for Ranch Managers.  In keeping with the “holistic” idea that the land, the livestock, the people and the money should be viewed as a single integrated whole: Part I deals with the management of the natural resources. Part II covers livestock production and Part III deals with the people and the money. Not only would this book make an excellent basic text for a university program in Ranch Management, no professional ranch manager’s reference bookshelf should be without it. It is a comprehensive reference manual for managing the working ranch. The information in the appendices and extensive bibliography alone is worth the price of the book.

You might be interested in this books supplement: Planned Grazing: A Study Guide and Reference Manual.

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About Land & Livestock Interntional, Inc.

Land and Livestock International, Inc. is a leading agribusiness management firm providing a complete line of services to the range livestock industry. We believe that private property is the foundation of America. Private property and free markets go hand in hand—without property there is no freedom. We also believe that free markets, not government intervention, hold the key to natural resource conservation and environmental preservation. No government bureaucrat can (or will) understand and treat the land with as much respect as its owner. The bureaucrat simply does not have the same motives as does the owner of a capital interest in the property. Our specialty is the working livestock ranch simply because there are so many very good reasons for owning such a property. We provide educational, management and consulting services with a focus on ecologically and financially sustainable land management that will enhance natural processes (water and mineral cycles, energy flow and community dynamics) while enhancing profits and steadily building wealth.
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