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Levers with Long Handles – The Leverage of Grazing Management

Written by Dallas Mount

By Dallas Mount, UW Extension Educator

When there is a job to do on the ranch, you need the right tool. When that job is going to take a lot of force, you often need a tool with a long handle to get the leverage you need. When you look in your ranch manager’s tool box, what areas of ranch management offer you the greatest leverage to affect change on the ranch? 

From my experience, grazing management is certainly one of those tools, and on many ranches it is a drastically underutilized tool. Learning how to use this tool can allow you to improve the health of the land you are managing and improve the profitability of the business.

Why is it that so many ranches don’t use this tool to its potential? I think it is because learning how to use this tool takes learning a new approach and perhaps a new way of thinking about the ranch.  It isn’t something we can write a check for and be handed in a bag, box or bale. It requires skill, thought and effort to capture the value of this important tool.

Let me use a made-up ranch, with numbers based in reality to show you what I mean about the leverage of grazing management.

This ranch runs mostly on deeded land. They run about 300 cows, keep all heifer calves and turn them into either yearlings or bred heifers. They also put up about 400 ton of hay on native meadows.

This ranch is really involved in four enterprises that all make up the ranch business.  These enterprises are land, cows, heifers and hay.

If we do an economic analysis of the four enterprises on this ranch, their number, for 2015 projections look like the ones in the table to the right.

It is pretty easy to see from the numbers that the land enterprise is pulling the weight on this ranch.  In this analysis, only the forage value of the land enterprise is considered – not hunting, gravel, pipelines, etc. Although I’m not suggesting that this result is the same for your ranch, of the many ranches I evaluate, the results presented here are fairly typical.

If these numbers presented here were relatively consistent across years, and projections looking forward painted a similar picture, there are a couple of approaches that become apparent. 

The first is to stop doing enterprises that are not working. In this case, stopping the haying enterprise and freeing up capital that is tied up in producing hay would improve the bottom line of the ranch.

Another approach is to do more of what is working. The land enterprise is working well. So does that mean we need to go by more land? Probably not. Few land purchases can cash flow based on the forage value of the ranch.

What if we focused on getting better at growing and harvesting the forage on the land we already have? Now, cue the dramatic music to introduce the lever of grazing management.  What if we found a way through water development and fencing to increase the rest period for our most productive plants, thereby increasing their population and vigor on the ranch?  What if this development also allowed for better animal distribution across the landscape and more even grazing of the plants in the pasture?  Sure this development would have a cost, but what if the return in forage value would be paid back within one or two years after the development? That may sound too good to be true, but there are many cases where this has proven to be the case.

For discussion sake, let’s say we came up with a project that costs $50,000 but allows stocking rate to be increased 30 percent over historic use while showing improving trend in range condition.  This $50,000 expense would result in $51,000 in increase forage value the first year the 30 percent increase was realized and every year into the future.  Sure, there would be maintenance and repair on this development but the continued returns should make this a no-brainer. 

Not all grazing management involves fencing and water, but often that is a major component. Getting the water development right the first time is paramount.  Fencing is relatively cheap compared to water. On fencing, we are not using the tools of our ancestors. The days of barbwire for anything other than a boundary fence should be behind us.  The new fencing tools can create twice the fence at a third of the cost.

This article is not intended to be a how-to on fencing and water development or grazing system design, but it is intended to peak your interest in the leverage this tool can provide you. There are many ranches that have drastically increased their carrying capacity while continuing to show improved range condition by using progressive grazing management approaches. This tool has a long handle and if you intend on running a profitable ranch into the future, you need to learn how to best use this tool on your ranch.

We have started our High Plains Ranch Practicum School in the Glendo region and will be starting our Ucross region school in late June. There are still a few spots available if you would like to enroll.  Details can be found at HPRanchPracticum.com.


Ranch enterprises and their profitability

Enterprise

Gross Returns

Total Costs

Net

Land

$169,137.50

$70,188.00

$98,949.50

Cow/Calf

$456,108.50

$440,714.00

$15,394.50

Heifer Development

$175,950.00

$114,241.76

$61,708.24

Hay

$44,000.00

$82,939.00

-$38,939.00

Totals

$899,128.50

$769,595.17

$137,113.24