Testimony of a… Young, First-Generation Rancher –

Kit and Company,

Kat and I received an award from a local farm/ranch organization Sunday evening.   It was called the Young Producer of the Year award.   We were very honored to have a group of local producers recognize us for what we have been able to achieve in our short ranching career.  

However, I was very disappointed in the overall negative tone of the rest of the meeting.   There seemed to be no hope for anyone in production agriculture.  

Fall Bull Sale Analysis

We sold 338 low-maintenance, grass-developed bulls in our two fall bull sales for an average price of $5113 – with a range of $2000 to $15,500.   Below is a brief analysis of our two sales.   Calving ease, fleshing ability, disposition, overall rating, and grass efficiency were evaluated and scored using our unique 5-star system.   In this system, 5-star is the best and 3-star is about average.

Cost Per Calf –

 

 

According to the Livestock Marketing Information Center (LMIC), the cost of producing a calf has increased from $384 in 2000 to $883 in 2014.   It more than doubled in just 14 years.   Keep in mind, though, that this is an average cost of production.   Some cow-calf producers have a much higher cost of production, while others have a much lower cost of production.

 Most longtime PCC customers have a cost of production of $400 to $500 per calf.  

Is Average Good Enough?

 In commodity agriculture, average is breakeven.   Below average producers are losing money.   The only way they can stay in business is to subsidize the farm or ranch with outside income.   Above average producers are profitable.   Some are extremely profitable.   They are profitable because their management differs substantially from average producers.   They have a distinct competitive advantage.

 Most PCC Customers are well above average.   Many have doubled their profits.   They are focused on production per acre – instead of production per cow (bragging rights).  

True Story –

 

 John Nino, a PCC customer from California, showed up at our Nebraska Bull Sale last Saturday.   He and a couple of companions were in the area to buy some horses.   John purchased some bulls while at the sale.   While he was waiting for health papers, he came into the office to visit.   John shared the following story with everyone in the office – a story that I remember very well.

 The morning of our 2007 Colorado Fall Bull Sale (12 years ago),

Making the Transition –

 

The most gratifying part of my job is hearing from people who made the transition from high-input, break-even ranching to low-input, profitable ranching.   I receive emails on a weekly basis from those who are so glad they made the transition when they did.   Most wonder why it took so long to see the light.   I can remember having the same thoughts myself over 30 years ago.   Making a paradigm shift of this magnitude is not easy.

I visited with many PCC customers at our spring bull sales.  

Grassfed Beef… The Good, the Bad and the Ugly (part 3) –

By Tim Goodnight

 

 Over the past two weeks, we have discussed several important areas that producers must address in order to produce high-quality grassfed beef.  This week, I would like to discuss two of the most frequently asked questions we hear when visiting with customers.

 Endophyte-infected fescue is one thing many PCC customers ask about.  With endophyte-infected fescue accounting for 35 million acres of grassland and hosting 8.5 million head of cattle,

The Willingness to Change –

By Kit Pharo

 

Whether you want to believe it or not, your long-term success in the cow-calf business will be dependent on your willingness to make some changes.   We all have the ability to change – but not everyone has the willingness to change.   Unfortunately, most producers will not change until they are forced to change.

Cattle prices will continue to go up and down,

Grassfed Beef… The Good, the Bad and the Ugly (part 2) –

By Tim Goodnight

 In last week’s discussion on what is required to produce quality grassfed beef, I focused on animal genetics.   While selecting the right genetics is essential to producing quality grassfed beef, there are several other factors to consider.

 Grassfed beef producers face many challenges that the feedyards do not.   Feedyards are very good at producing vast amounts of beef in confined areas using formulated rations.   Unfortunately, many consumers feel these production practices produce beef that lacks flavor.   

How Do They Work in the Feedlot –

By Kit Pharo

Over the years, I have probably had over 200 people say, “I know PCC genetics work great on the ranch – but how do they work in the feedlot?”   I don’t get asked that question nearly as often as I did just five years ago – but often enough that I feel the need to publicly answer it. 

 Let me begin by saying, nearly all of a ranch’s profit or loss is a result of what happens within the ranch’s fences (on the ranch).  

Happy, Happy, Happy –

By Kit Pharo

 Cattle prices have been edging their way up for the past two weeks.   That’s the kind of news we all like to hear.   I think prices will continue to trend upwards because the five-year herd expansion rate appears to have leveled off.

 While you are happy, happy, happy about higher prices, I would like to challenge you to take this opportunity to start market-proofing your business.  

Use Your Head –

Low-input ranching uses thinking (management) to solve problems – instead of money.   What could be more cost effective?

Those who sell inputs – whether pharmaceuticals, equipment, machinery, feed supplements, chemicals, etc., etc. – are NOT at all concerned with how much money you make as long as you stay in business (just barely) and continue to support them.

 

Quote Worth Re-Quoting –

“Most ranchers get out of bed looking for ways to spend money,

TOP FIVE Reasons for Buying Bulls in the Fall –

 

1. Bulls sell for less in the fall because there is less demand.

2. Fall is the best time to move cattle from one environment to another – especially if you are moving them into a hotter, more humid environment (south    and/or east).

3. Spring-calving producers have much more time to select and purchase bulls in the fall than they do in the spring.

4. These bulls are 18-months of age – going on two years.  

Grassfed Beef… The Good, the Bad and the Ugly (part 1) –

As stated in previous PCC Updates and Newsletters, the grassfed sector is the only bright spot in today’s beef industry.   It has had an annual growth rate of 25% for the past 20 years.   In contrast, the commodity beef sector has shrunk nearly 20% over the last 15 years.   It is becoming harder and harder to be profitable in the commodity beef business.   We believe this trend will increase at an even faster pace as the Millennials replace the Baby Boomers.   That’s the “good” of grassfed beef.

Times Have Changed –

The status quo beef industry is the result of a time when land was unbelievably cheap – at least by today’s standards.   It is also the result of cheap feed and cheap fuel.   Gasoline could be purchased for 25 cents per gallon in the early 1970s.   Labor was cheap – and equipment was cheap.   The status quo way of doing things made sense 40 to 50 years ago.   Unfortunately, that era is over – and it ain’t coming back.

There will always be more opportunities to advance during times of change than at any other time.  

Grass Efficiency

Johan Zietsman once said, “Grass-efficient animals look like eight pounds of sugar in a 5-pound sack.”   We believe that is an accurate analogy.   We have provided a grass-efficiency score for all of the bulls selling in our two fall bull sales.   Bulls with a 4+ or 5-star rating for grass efficiency will be the very best at producing early-maturing, highly-fertile, long-lasting replacement females.   They will also be the very best at producing steers that will excel in grass-finishing programs.

No Downside

As you know, the genetics that work best for the feeders and the packers do NOT work best on the ranch.   They are too tall, too lean and too late-maturing.   They grow and grow and continue to grow.   They are way too big before they start putting on fat.   This has been the mainstream trend for 40+ years – and it continues to get worse.

As you also know… the genetics that work best on the ranch are low-maintenance,

Lower Cattle Prices

If you are a cow-calf producer, I’m sure you’ve noticed cattle prices have been struggling for most of the past year.   When that happens, most cow-calf producers don’t want to think about it or talk about it.   They just hope prices will recover before they need to sell their calves.   There is nothing wrong with hope – but it is not a good management strategy.

Compared to one year ago, 500-pound calves are selling for $100 less.   One hundred dollars per head is a significant reduction in income.  

Nearly One In Four

Someone shared an internet article with the PCC Discussion Group that was entitled “Nearly One-In-Four have Tried Meatless Fast Food.”   This group loves to discuss things that most cow-calf producers would rather not acknowledge – much less talk about.   That’s just our nature.   One of the responses came from Dr. Allen Williams, who is an industry expert in grass-fed beef, grazing methodology, regenerative agriculture – and much more.   I thought his email was very eye-opening and worth sharing.   This is somewhat of a follow-up to last week’s article entitled “Flavorless Beef.”

Fake meat is not going away,

Flavorless Beef

One month ago, we had a busload of farmers and stockman from Argentina stop by PCC Headquarters for a visit.   I have heard from a few of them since they returned home.   If you are a beef producer, the following email from Pen Gunningham should will give you something to think about.

Dear Kit,

I was in the group of Argentine farmers who visited your cattle ranch last month.  It was a very interesting visit, as you have a different approach to cattle breeding than what appears to be the norm in the US.