Sustainable livestock systems and risk management keep ranchers in businessWritten by Saige Albert
To be a sustainable ranch, Smith adds, “Another important part of sustainability is reducing risk.”
To reduce risk, producers should anticipate the potential for tough times ahead, and drought, in particular .
“We can’t predict drought, but we can predict if we will have any feed this year,” says Smith. “If we haven’t had any rain by the end of April, we should probably plan on getting rid of excess livestock.”
Though it is difficult to identify when drought will strike, Smith notes that it seems to happen regularly and, in Wyoming, one area or another seems to be short of water.
“We need to figure out when we have to make decisions before we lose money,” says Smith. “It’s different everywhere.”
Forage is key
“Ranching is a business of raising forage and harvesting it efficiently,” comments Smith. “I am talking about utilizing a menu of practices that ranchers can employ to foster profitability and lower risk.”
“It goes without saying that you have to maintain the quality of the land resources,” he continues. “That includes BLM and Forest Service allotments.”
For producers, Smith notes that winter feeding costs are often the largest expenses incurred on a ranch.
“One way to get away from winter feeding is to change your calving season to match nutrient needs with the seasonal availability of forage,” Smith says. “The idea is to have the high maintenance requirements for pre- and post-calving in a season when nature will provide that feed, rather than you.”
Later calving dates also lead to less maintenance and labor, as well as fewer disease problems. Smith notes that breed-back and weaning percentages are almost always improved, though calves might be smaller.
Later weaning programs also provide advantages in reducing weaning diseases, increasing weaning percentages and decreasing death loss and labor. He adds that replacement heifers stay with their mothers longer and are better mothers later.
“Low cost winter grazing, instead of feeding hay, is the foundation of reducing costs of the operation in using late season calving,” he adds.
One caution Smith adds to late season calving is the possibility of pine needle abortions.
“For some audiences, pine needle abortion is a big deal, and cows calving in March are susceptible to pine needle abortions,” Smith explains. “Pine needles have a compound in them that restricts blood flow to the placenta and acts like a prostaglandin, stimulating early birth in calves.”
Smith proposes that producers consider a cow/calf operation that also runs yearlings.
“It fits well with the late season calving, and producers increase their flexibility in case of drought,” says Smith. “The end result in fall is the calves will be about the same size as if they were born earlier. The only difference is in the cost of raising them.”
In a drought situation, a diversified operation allows the option of earlier weaning to avoid running out of pasture or the option to sell yearlings.
Smith adds that there are also financial advantages to selling yearlings, rather than calves.
“Feeders aren’t making any money because the cost of putting gain on a yearling in a feedlot is a lot,” he explains. “If producers grow the yearlings in pasture, the cost of gain is a lot lower, and the value of the gain is a lot higher.”
Raising cattle on grass is advantageous as well, because it allows marketing of the animals as grassfed slaughter cattle. Other market advantages, according to Smith, include the option of selling into branded beef programs, like Certified Angus Beef, or retail sales.
Economics are a large factor in a ranch’s ability to change operating strategies, and Smith notes that each kind of operation has different requirements for capital.
“In a cow/calf operation, there is little variation from the standpoint of annual income, and the only fluctuation is based on the price for weanling cattle,” explains Smith. “It is also the lowest return system.”
Conversely, if producers can afford to buy stockers and run them through the summer, the opportunity for returns is much higher, and Smith says that, eight years out of 10, producers will make good money, while losses will be high in the remaining two. Running a cow/calf and yearling operation falls somewhere in the middle, as far as risk and returns are concerned.
Smith emphasizes that the key to better practices is to adjust them to fit the situation, environment and producer’s management expertise.
“These practices aren’t a one-size-fits-all prescription,” he notes.