By Burke Teichert || Originally published in
BEEF Magazine and beefmagazine.com
In the two weeks prior to writing this article, the stock market took a big dive and the cattle market dropped for all classes of cattle. Recently I read material that indicates average ranches in Kansas have only been profitable two out of the last 10 years when all costs are considered. I have also been told that most of the ranches of 50 cows or less are dependent on the owners’ off-farm jobs to continue to operate.
The drops in the stock and cattle markets are not surprising. That has been happening periodically over the last 100 or more years. What is disturbing is that average ranches are not profitable—especially in the last 10 years. Except for those stricken with drought, we have never had better times in this business.
Ranches don’t need to lose money, nor do they need to be subsidized with off-farm income unless you inherit or incur too much debt. Last month I talked about low-input and high-management. I think it is nearly impossible for high-input ranches and high-input cattle to be profitable. Land, labor and equipment (overheads) can be very expensive. We need to keep land costs as low as possible and reduce labor and equipment to the lowest possible level to get “needed” work done.
The other big cost is feed. If the feed comes from the land and cattle do the harvesting, that part of the feed cost is included in the land cost. The rest of it must be used judiciously and timed to fit the needs of the livestock.
Good cows are those that get pregnant as yearling and rebreed early in each subsequent breeding season, and do it on minimal feed inputs. The right cattle using low inputs will always be more profitable. Too many of our modern-day cattle have become input dependent. They can’t breed as yearlings and rebreed each year without significant use of fed feed and supplements. This does not have to be. Cattle can be developed to breed as yearlings in a short breeding season with minimal development. The same cattle can also be expected to rebreed in short breeding seasons each year thereafter.
For profitability, nothing is more important on a ranch than reproduction and calf survivability. This must be done on low inputs—grazing all or most of the year with hay feeding only in times of deep snow or prolonged severe cold; strategic supplementation of protein and minerals only to correct nutritional deficiencies; and use of very little labor for individual animal attention.
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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.
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.
We appreciate and enjoy Mr. Teichert’s thought-provoking articles and blog and we are grateful to him and BEEF Magazine for allowing us to reprint this article. For this article and more please visit www.beefmagazine.com.