Over the years, the illustration below provided the “Aha Moment” hundreds of cow-calf producers needed to STOP focusing on increasing pounds per animal (bragging rights) and START focusing on increasing pounds per acre (profit).
Year in and year out, the truck with the 450-pound calves will be worth at least $20,000 more than the truck with the 600-pound calves. If your ranch produces five truckloads of calves, that would be a difference of $100,000!
Over the years, the illustration below provided the “Aha Moment” hundreds of cow-calf producers needed to STOP focusing on increasing pounds per animal (bragging rights) and START focusing on increasing pounds per acre (profit).
Year in and year out, the truck with the 450-pound calves will be worth at least $20,000 more than the truck with the 600-pound calves. If your ranch produces five truckloads of calves, that would be a difference of $100,000!
No, this is not an ailment that affects big calves. This is an ailment that affects ranchers who believe they must produce big calves to be profitable. Big calves are not always profitable. In fact, small calves are almost always more profitable than big calves. I know some of you find this hard to believe, but it’s true. Allow me to share three reasons for this.
Cost of Production will always have a bigger impact on net profit than calf size. Profit is measured by subtracting your expenses from your income.
No, this is not an ailment that affects big calves. This is an ailment that affects ranchers who believe they must produce big calves to be profitable. Big calves are not always profitable. In fact, small calves are almost always more profitable than big calves. I know some of you find this hard to believe, but it’s true. Allow me to share three reasons for this.
Cost of Production will always have a bigger impact on net profit than calf size. Profit is measured by subtracting your expenses from your income. Therefore, it’s possible to increase your profits simply by decreasing your expenses. I know several ranchers who are always profitable even though their calves are much smaller than average. Their success comes from their ability to maintain a very low cost of production which, in turn, creates a very low break-even point.
Stocking Rate. Some ranchers have small to moderate sized cows that require very little in the way of outside inputs. This allows them to run more cows on the same forage resources than ranchers with large, high-production cows. Because smaller cows can wean a higher percent of their own body weight, they will always produce more total pounds than bigger cows on the exact same acres. This is one of the easiest ways to increase pounds and profit per acre.
Although these ranchers don’t have any bragging rights at the local coffee shop, they’ve proven that 400 to 450-pound calves can be very profitable. In contrast, I’ve talked to many producers who seem to be doing everything right, but struggle to break even with 500 to 600-pound calves. What went wrong? Big, high-maintenance cows do not fit the environment. Therefore, the producer must reduce stocking rates and/or increase supplemental feeding.
Price Per Pound. Small calves always sell for more per pound than big calves. Cow-calf producers never receive fair compensation for producing big calves. To add insult to injury, take a look at market reports from your local livestock auction. Most years, it isn’t difficult to find examples where 450-pound calves sell for about the same price per head as 600-pound calves. In those cases, the extra 150 pounds have absolutely no value!
More total pounds that are worth more per pound seems like a no-brainer! So… why are most cow-calf producers still trying to increase weaning weights? They mistakenly believe they must produce big calves to be profitable. Eventually, however, these high-production producers will realize profit is more important than bragging rights. If they don’t, Big-Calf Syndrome may put them out of business. It doesn’t matter how big your calves are if they’re not profitable!
All of the beef publications I receive are still jammed full – cover to cover – with bull sale advertisements. You will quickly notice that nearly all of the bulls being offered have been bred and selected to help you increase your production per cow (weaning weight). This has been the primary focus of the beef industry for over 50 years. Registered breeders continue to select for higher and higher growth EPDs, and for bigger and bigger weaning weights.
Growth EPDs for most bulls are through the stratosphere!
All of the beef publications I receive are still jammed full – cover to cover – with bull sale advertisements. You will quickly notice that nearly all of the bulls being offered have been bred and selected to help you increase your production per cow (weaning weight). This has been the primary focus of the beef industry for over 50 years. Registered breeders continue to select for higher and higher growth EPDs, and for bigger and bigger weaning weights.
Growth EPDs for most bulls are through the stratosphere! Several registered breeders are bragging about their 800, 900 and even 1000-pound weaning weights. Are they implying we can get the same results simply by using their bulls? Sadly, the fact that these registered breeders continue to sell a lot of bulls for a lot of money tells me there are a lot of commercial cow-calf producers who remain duped.
What does it take to produce calves that weigh 800 to 1000 pounds at weaning? First, it requires cows that weigh 1800 to 2000+ pounds. These cows do not fit any environment outside of a feedlot. Is this the kind of cow you want? Producing calves that weigh 800 to 1000 pounds at weaning also requires calves to be fed a hot ration – starting soon after birth. Can you afford to do this?
Registered breeders are willing to spend whatever it takes to get the results they want. They can justify spending all this extra money because commercial cow-calf producers are still willing to pay big bucks for overfat bulls that have artificially inflated weaning weights. This is a ruse many seedstock producers have mastered.
Commercial cow-calf producers, on the other hand, cannot justify spending extra money to get the results they were promised. They will never get paid enough for those extra pounds to cover the cost of the extra pounds. For this reason, they will NEVER be able to produce calves as big as their bull provider is producing.
Question: I’m sure you have explained this before. Why are your bulls able to cover more cows than bulls coming out of other programs? Also, I am wondering how many cows you recommend putting with a bull.
Answer:
The fact that our bulls can cover more cows is a result of two things. Low-maintenance requirements and the way our bulls are developed. Nearly all of today’s bulls are high-maintenance bulls that have been developed on high-energy rations.
Question: I’m sure you have explained this before. Why are your bulls able to cover more cows than bulls coming out of other programs? Also, I am wondering how many cows you recommend putting with a bull.
Answer:
The fact that our bulls can cover more cows is a result of two things. Low-maintenance requirements and the way our bulls are developed. Nearly all of today’s bulls are high-maintenance bulls that have been developed on high-energy rations.
Compared to high-maintenance Diesel Bulls, our low-maintenance Solar Bulls require much less feed to meet their maintenance (survival) requirements, which allows them to stay in excellent breeding condition. While most bulls lose weight and condition during the breeding season, our bulls will hold their condition and gain weight. As an added bonus, our bulls will produce low-maintenance replacement females that won’t need to be pampered to stay in production.
Bulls that are developed (fattened) on high-energy rations have no way to go but down. They are pretty much guaranteed to melt and fall apart when you take them home and introduce them to the real world. Our bulls won’t be as big or as fat as everyone else’s bulls – but they rarely fall apart when you take them home. They are also much healthier and more reproductive.
Bulls that struggle to hold their condition during the breeding season, cannot be counted on to breed very many cows. That is why the status quo beef industry recommends you keep the number of cows equal to the bull’s age in months. A 15-month-old bull should be put with no more than 15 cows. No matter how old a bull is, the status quo industry recommends you never go over 25 to 30 cows per bull.
It’s been estimated that only one out of three Diesel Bulls last long enough to have a second breeding season. That’s not a very good return on your money, is it?
Our recommended cow to bull ratio is double that of the status quo beef industry. We are not afraid to put a yearling PCC Solar Bull with 25 cows. An 18-month-old bull should be able to cover 35 to 40 cows. Although we don’t recommend it, I know several PCC customers who are running a mature PCC Solar Bull with 60 to 80+ cows.
The larger the cowherd, the higher our recommended cow to bull ratio. For example, putting one bull with 50 cows might make me a bit nervous because he has no backup. Putting four bulls with 200 cows, however, does not concern me one bit. If one of those bulls gets injured, I would have no problem letting the remaining three bulls finish the season. When you have more than one bull with a herd, it is not at all uncommon for one bull to breed a lot more cows than the other bulls.
What’s a bull worth that can breed twice as many cows for twice as many years? You will be happy to know he is worth a whole lot more than you will ever have to pay for him! To request a catalog for our three spring bull sales, reply to this email or call us at 800-311-0995.
If you are using low-maintenance Solar Bulls, don’t be afraid to let them do what they love to do. You might be interested in reading our Sex Is NOT Work article.
A periscope is a very handy instrument used to observe activity above the water’s surface from a submerged submarine. When the command “up periscope” is given the periscope is raised for use. Once in place, it has the ability to swivel around for surveillance in all directions.
We often refer to disposition problems in cattle as the up-periscope syndrome. When you come in close contact with a herd of cattle, those with a nervous disposition will quickly raise their heads in the air and start looking back and forth like an extended periscope.
A periscope is a very handy instrument used to observe activity above the water’s surface from a submerged submarine. When the command “up periscope” is given the periscope is raised for use. Once in place, it has the ability to swivel around for surveillance in all directions.
We often refer to disposition problems in cattle as the up-periscope syndrome. When you come in close contact with a herd of cattle, those with a nervous disposition will quickly raise their heads in the air and start looking back and forth like an extended periscope. They’re not going to be caught unaware. This might be considered a good trait if today’s cowherds still had to contend with lions and other large predators.
As it is, though, the up-periscope syndrome is not a trait most of today’s cattlemen want in their cattle. In fact, it is considered to be very detrimental. Cattle with wild or nervous dispositions have poor performance. They are difficult to handle and they are very hard on fences and other structures. They can also create major health risks to their handlers.
There are many economic traits to consider in beef production, but I’m not sure any are more important than disposition. Pharo Cattle Company has very little tolerance for cattle with the up-periscope syndrome. If there is a problem, we quickly eliminate it. We believe good and bad dispositions are quite heritable. Cows with a high-headed disposition will produce calves with a high-headed disposition.
We monitor disposition very closely in the bulls we sell because we know it’s important to our customers. All of our bulls have been put through a simple test that allows us to give them a score for disposition, from 1 to 5. We sort each bull off by himself in an alley and crowd him between two to four people. This measures the bull’s comfort zone, as well as his disposition. A bull that will stand calmly, with no signs of excitement or nervousness, will receive a high score. If a bull gets nervous and/or tries to run past us, he will receive a low score. If a bull acts like he might run over us, he is sent to McDonalds.
If you are only purchasing one bull, we suggest you sort for a 4-star or better disposition. If you are purchasing three or more bulls, we suggest you sort for a 3-star or better disposition. Bulls are social animals. They don’t like to be alone. A 3-star disposition bull will have greater difficulty staying calm and collected than a 4 or 5-star bull when being transported alone from the sale. If a 3-star disposition bull remains with a buddy or two, he shouldn’t have any problems.
Have you ever heard a veterinarian or a seedstock producer caution against overworking a bull, especially a young bull? What do they mean? How can you overwork a bull? When someone advises you against overworking a bull, they are really telling you to not give him too many cows or heifers to breed.
Now, wait a minute! Allow me to set the record straight. Sex is NOT work for a bull! In fact, every bull worth his salt will go to sleep and wake up thinking about finding more cows to breed.
Have you ever heard a veterinarian or a seedstock producer caution against overworking a bull, especially a young bull? What do they mean? How can you overwork a bull? When someone advises you against overworking a bull, they are really telling you to not give him too many cows or heifers to breed.
Now, wait a minute! Allow me to set the record straight. Sex is NOT work for a bull! In fact, every bull worth his salt will go to sleep and wake up thinking about finding more cows to breed. There is nothing a bull would rather do than breed cows.
So why do the experts caution us against overworking a bull? The problem lies in the fact that most of today’s bulls are late maturing. They lack masculinity and fertility. Besides being sissy bulls, they lose condition and/or go lame during their first breeding season. Sex is not the problem. Nevertheless, when a bull has low sex drive and is losing condition or limping around, it becomes quite difficult for him to get very many cows settled.
I have heard many seedstock producers and veterinarians say a young virgin bull should not be turned out with more than 15 cows, and a mature bull should not be turned out with more than 25 to 30 cows. I’m not going to argue with them because I understand why they are making these recommendations. I will say, though, that it is high time for us to fix the problem instead of just treating the symptoms.
Seedstock producers need to get back to the basics of bull production. They need to stop selecting exclusively for higher and higher growth EPDs. They need to stop over-feeding and pampering their cattle. They need to produce environmentally-adapted cattle with fleshing ability that has been bred in – not fed in.
Pharo Cattle Company was established as a no-nonsense seedstock producer over 30 years ago because we saw the need to redefine and change the responsibilities of bull suppliers. From the very beginning, we believed seedstock producers should be tougher on their cattle than their customers are on theirs. Otherwise, we will never be able to help our customers make any herd improvements. This simple, common-sense philosophy quickly differentiated us from status quo seedstock producers.
Our bulls are not sissy bulls! They are moderate-sized, early-maturing bulls that look very masculine at a young age. They are bred and developed in such a way that they don’t fall apart during the breeding season. In fact, most of our bulls will gain weight while breeding cows. They go to work every morning with a big smile on their face – because breeding cows is NOT work for them.
Our recommended cow to bull ratio will vary from ranch to ranch, but it is much higher than the norm. We are not afraid to recommend turning our first-time, virgin bulls out with 25 to 30 cows. Our mature bulls have proven that they can cover 50+ cows. We know of several cases where our bulls have successfully exceeded these rates.
I don’t think anyone really knows how many cows a moderate-sized, easy-fleshing, early-maturing bull can settle. Many of our customers say they can get by with one-half the number of bulls they used to have. They also say our bulls will last much, much longer than the bulls they used to have. Many PCC bulls are still going strong at eight to twelve years of age.
I look in on a couple of internet discussion forums on a regular basis just to see what the status quo whiz kids are saying and thinking. On Monday, February 1st, one discussion forum started a thread on “Horn Fly Control.” Really? In February? That seems a little early. I usually don’t see much discussion on fly control until May and June – when it quickly becomes the hottest topic within the beef industry. I suspect memories of last summer’s horrific fly problems are still fresh in some minds.
I look in on a couple of internet discussion forums on a regular basis just to see what the status quo whiz kids are saying and thinking. On Monday, February 1st, one discussion forum started a thread on “Horn Fly Control.” Really? In February? That seems a little early. I usually don’t see much discussion on fly control until May and June – when it quickly becomes the hottest topic within the beef industry. I suspect memories of last summer’s horrific fly problems are still fresh in some minds.
Of course, members of this forum shared their favorite “toxic chemical” solutions and combinations to remedy the horn fly problem – which, by the way, costs the beef industry over $800 million every year in production losses. Research has shown horn flies can reduce daily gains by as much as ½ pound per day. That could amount to 100 pounds per calf at weaning. The recommendations included fly tags, pour-ons, rubs, sprays and insect growth regulators (IGR).
When these pesky flies develop a resistance to one toxic chemical, the drug companies will create a new one to sell you. Although this ridiculous cycle has been ongoing for several decades, the horn fly problem is worse now than ever before.
When I looked in on this discussion yesterday morning, I was surprised and delighted to see that someone GOT IT RIGHT! Following are his suggestions:
· First year… Sell cows with most flies
· Second year… Sell cows with most flies
· Third year… Sell cows with most flies, and consider rotational grazing
The reason the beef industry has not been able to solve the horn fly problem is because it continues to treat the symptoms of the problem while it totally ignores the problem. The problem is a genetic problem. It can only be solved by eliminating cattle that do not have any genetic resistance to horn flies.
I might have suggested rotational grazing sooner than the third year. The life cycle of the horn fly, from egg to adult, takes 10 to 20 days depending on conditions. Properly done, rotational grazing will have the cowherd far enough away that the emerging adult flies will not be able to find a host animal.
There is one thing missing from the above recommendations. You can sell all of the cows that do not have any genetic fly resistance – but if you continue to use bulls that do not have any genetic fly resistance, you will be fighting this battle forever!
Genetic parasite resistance is one of many areas in which Pharo Cattle Company has assumed the leadership position. We have been evaluating and scoring the bulls we sell for fly resistance for 14 years. All of the bulls in our upcoming Texas and Missouri bull sales have been evaluated and scored for fly resistance. Where else can you find bulls that were bred, selected and evaluated for horn fly resistance?
I recently read an article in a beef publication that quoted Stan Bevers who is a ranch economist in Texas. Stan said, “The average cow cost in the late 1980s and early 1990s was about $365 per year.” In other words, every calf had to sell for $365 to break even. A 450-pound calf would have to sell for $0.81 per pound to break even.
I recently read an article in a beef publication that quoted Stan Bevers who is a ranch economist in Texas. Stan said, “The average cow cost in the late 1980s and early 1990s was about $365 per year.” In other words, every calf had to sell for $365 to break even. A 450-pound calf would have to sell for $0.81 per pound to break even.
Stan went on to say, “Today, my clients’ average cow cost is $956 per year. How in the world did annual cow cost go from $365 to over $950 in a matter of 30 years?” If this is true, the breakeven price today on a 450-pound calf is $2.11 per pound. According to the latest CattleFax Update, 450-pound steer calves are selling for $1.78 per pound. That tells me Bevers’ average clients are losing at least $155 per calf.
At first, I thought $956 sounded a little high – but I bet it isn’t. According to the Livestock Marketing Information Center (LMIC), the national average cost of producing a calf was $883 in 2014. That is only an increase of $73 in the last six years.
The one thing I know for sure, is that some producers have a cost of production that is higher than average. These producers are losing more than $155 per calf. Some are probably losing over $300 per calf. I also know some producers have a cost of production that is much lower than average. For example, many longtime PCC customers have a cost of production in the $400 to $500 range. If your cost of production is $400 to $500 on a 450-pound calf, you will be making $300 to $400 on every calf.
Bevers went on to discuss the various fixed and variable costs that make up annual cow cost. He said it typically takes 63% of your annual income to cover your fixed costs. That only leaves 37% to cover variable costs like feed. There will be zero profit until all of your cow costs have been covered. Unfortunately, that is the situation most cow-calf producers are currently faced with.
I just about fell out of my chair when Bevers said, “The easiest way to decrease fixed costs is to increase the number of units in production.” The only way to increase cow numbers without having much effect on variable costs is through low-input genetics and good grass management. Most cow-calf producers can increase stocking rates by over 30% with the right size and type of momma cows. Proper grazing can increase stocking rates by another 50 to over 200 percent.
Without actually saying it, Stan Bevers inadvertently said we should focus on increasing production per acre (profit) – instead of production per cow (bragging rights). It is rare for anyone in the status quo herd to come to this conclusion! Other than Pharo Cattle Company, very few are advising cow-calf producers to focus on increasing production per acre. As we have said many times, stocking rate and cost of production affect profitability, or lack thereof, more than anything else.
Question:What do you think the optimal % of body weight weaned should be for a cowherd?
Answer:
Let me begin by saying, just about anything is possible if we are willing to reduce stocking rates and spend enough on extra feed and special care. For example, it is possible to have 1600-pound cows wean 800-pound calves – but we will have a whole lot more invested in those 8000-pound calves than they will ever be worth.
Question:What do you think the optimal % of body weight weaned should be for a cowherd?
Answer:
Let me begin by saying, just about anything is possible if we are willing to reduce stocking rates and spend enough on extra feed and special care. For example, it is possible to have 1600-pound cows wean 800-pound calves – but we will have a whole lot more invested in those 8000-pound calves than they will ever be worth. It doesn’t matter how big your calves are if they’re not profitable! If you’re not profitable, you’re going broke!
Let me begin by telling a personal story…
Twenty-five years ago, I was convinced we could select the most efficient cows simply by selecting for the cows that could wean the highest percent of their own body weight. The first year we did this, we weighed calves one day and adjusted their weights to the standard 205 days of age. We weighed cows the next day while we were preg checking. I had recently acquired my first computer – and I was excited to put it to use. We also had a dot matrix printer, with fanfold paper.
When we broke for lunch the second day, I went to the computer and started entering cow weights. The calf weights had already been entered and adjusted. After entering the cow weights, I printed out a report that was longer than I was tall (fanfold paper). At the top of the list, we had some smaller cows that weaned an amazing 65 to 70 percent of their own weight. At the bottom of the list, we had some bigger cows that only weaned 35% of their own weight. Obviously, we had solved the world’s cow-efficiency problem! What was I missing?
I had neglected to consider the preg testing information. Most of the cows that weaned a high percent of their own weight were thin and open. They were high-maintenance cows with too much milk! Raising those impressive big calves took all they had. They were unable to put on enough body condition to breed back. Back to the drawing board!
The next year, we asked our veterinarian to assign a body condition score to each cow as she was being weighed and preg checked. Every body condition score is worth about 80 pounds. This allowed us to adjust the cow weights to a body condition score of 5. If a cow weighed 1100 and had a body condition score of 5, her adjusted weight was 1100 pounds. If she weighed 1180 and had a body condition score of 6, her weight was adjusted down to 1100 pounds. If she weighed 1040 and had a body condition score of 4.5, her weight was adjusted up to 1100 pounds. This came much closer to putting all the cows on a level playing field.
The cows that stay in the herd the longest will almost always have a body condition score over a 5 at weaning. It is critical for a cow to store up energy in the form of fat before reproduction can take place. Low-maintenance cows with the propensity for fat deposition will always have the greatest lifetime production – even if they don’t wean the biggest calves. It doesn’t matter if a cow weans the biggest calf – if she can only wean one or two calves in her lifetime.
I don’t like to set any hard and fast rules when it comes to the percent body weight weaned. When one does that, he is focused on the wrong thing (pounds per animal) and profit will be very elusive. To increase profit and wealth, one needs to be focused on increasing stocking rate and pounds per acre.
It has always been a well-known fact that smaller framed cows can wean a higher percent of their own weight. In a real-world, no-input program, a 5-frame cow will not be able to wean 50% of her own weight. Very few 4-frame cows will be able to wean 50% of their own weight. In contrast, it’s not at all difficult for a 3-frame, 1100-pound cow to wean 50% of her weight – for many years.
Stocking rate can also be increased substantially with smaller framed cows. Consequently, pounds and profit per acre will be significantly higher with a herd of smaller framed cows than with a herd of bigger framed cows – the kind nearly all of today’s cow-calf producers have. Stocking rate affects profitability (or lack thereof) more than anything else.
Over 95% of the bulls being sold today are in the 5 to 7 frame range. Therefore, nearly all cowherds are made up of 5 to 7 frame cows. Like begets like! The only way for 5 to 7 frame cows to wean a respectable percent of their own weight is to reduce stocking rates and increase the amount of hay and supplements being fed. This is why most cow-calf producers are struggling to make a decent living.
Cows must fit their environment to stay in production. Common sense tells us it is much easier, as well as much more profitable, to produce cows that fit the environment than it is to artificially change the environment to fit the cows.
Your environment can only support so much size, growth and milk. Once you go beyond that point, you will have to reduce stocking rates and/or use expensive inputs to artificially change the environment. That may have worked when calf prices were ridiculously high a few years ago – but it won’t work now.
Cows must fit their environment to stay in production. Common sense tells us it is much easier, as well as much more profitable, to produce cows that fit the environment than it is to artificially change the environment to fit the cows.
Your environment can only support so much size, growth and milk. Once you go beyond that point, you will have to reduce stocking rates and/or use expensive inputs to artificially change the environment. That may have worked when calf prices were ridiculously high a few years ago – but it won’t work now.
It doesn’t take a genius to see that nearly all purebred operations have spent the last 50 years focused on maximizing production per cow (bragging rights) – instead of production per acre (profit). As a result, they have big (5 to 7-frame), high-milking cows that no longer fit any real-world ranch environment. The trouble with big, high-milking cows is they require a tremendous amount of feed just to meet their maintenance requirements (survival). Maintenance requirements must be met before any weight gain or reproduction can take place.
Ironically, the beef industry reached the point where there has been no significant increase in weaning weights many years ago. The cows keep getting bigger and bigger, but weaning weights have leveled off. The only way to make those big, high-maintenance cows produce bigger calves is to pour the feed to them. That is a surefire recipe for failure! Contrary to what the mainstream beef industry continues to tell us, all attempts to increase production per cow, will have a negative effect on production and profit per acre.
A cow ought to be supporting the ranch – instead of being supported by the ranch! Who is working for who? The only cows that can effectively support the ranch are moderate-sized, low-maintenance cows that fit their environment. The only way to produce cows that fit their environment is to use bulls that were produced by moderate-sized, low-maintenance cows that fit their environment. Like begets like! As long as you continue to use bulls that were produced by high-maintenance, 5 to 7-frame cows that must be pampered to stay in production, you will NEVER produce cows that fit your environment.
Last week, we discussed the year 2020 in our “Out with the Old” article. Today, we are going to look ahead to the new year. Some say the first day of the new year is no different from the last day of the previous year. They may be right – but, in my mind, starting a new year allows me the opportunity to hit the refresh button on my life. Therefore, I start every year with excitement and anticipation.
As we say goodbye to one year and hello to the next,
Last week, we discussed the year 2020 in our “Out with the Old” article. Today, we are going to look ahead to the new year. Some say the first day of the new year is no different from the last day of the previous year. They may be right – but, in my mind, starting a new year allows me the opportunity to hit the refresh button on my life. Therefore, I start every year with excitement and anticipation.
As we say goodbye to one year and hello to the next, it is good to reflect on where we have been, where we are, and where we would like to be. Is everything in your life exactly the way you would like it to be? I can rightly say I am content and satisfied with things as they are. However, that would be falsely admitting there is no room for improvement. There is always room for improvement.
The year 2021 will come with its own set of challenges. For example, we will still have to contend with Covid-19 and the effect it is having on the world around us. Many of us are starting the new year smack-dab in the middle of a severe drought. Cattle prices will most likely continue to be very volatile. It won’t take much to create wide swings in cattle prices.
We need to focus on the things we have some control over to deal with the things we have no control over. For example, we have no control over Covid-19, the weather and the markets – BUT we do have the ability to create a business that is resilient enough to survive whatever comes our way. I know some think I sound like a broken record when I keep saying we must find ways to increase our production per acre while decreasing our cost of production – but that is exactly what we need to do!
As we enter the New Year… I encourage you to reflect on where you are and where you would like to be – and then I encourage you to make things happen! Unfortunately, this will require change! You cannot continue doing things the way you have always done them and expect anything to change. However, once you get over your reluctance to change, the sky and your imagination will be your only limitations.
We believe the business of ranching can be much, much better than most people have been led to believe – but only for those who are not being restrained by outdated traditions and ways of thinking. We see evidence of this all around us! It is exciting to watch people do what their neighbors say cannot be done. It is inspiring to watch ordinary people accomplish extraordinary things.
We believe the sky is the limit for those who have enough courage to break away from the status quo,
We believe the business of ranching can be much, much better than most people have been led to believe – but only for those who are not being restrained by outdated traditions and ways of thinking. We see evidence of this all around us! It is exciting to watch people do what their neighbors say cannot be done. It is inspiring to watch ordinary people accomplish extraordinary things.
We believe the sky is the limit for those who have enough courage to break away from the status quo, herd-mentality way of thinking. The sky is the limit for those who are willing to think for themselves. The sky is the limit for those who have an open mind. The sky is the limit for those who are not afraid to step out of their comfort zone and change what needs to be changed.
The year 2020 will definitely be one to remember! With the arrival of Rona (co-Rona-virus), life as we knew it was hijacked (unlawfully seized, appropriated, stolen, commandeered). Although Rona was not the first influenza pandemic to hit the world, she was treated as the first and the worst.
Many people in politics and the news media did their best to take advantage of this crisis – and they succeeded. It became okay to riot in the streets and destroy private and public property – but it was not okay to enjoy a meal out with your family.
The year 2020 will definitely be one to remember! With the arrival of Rona (co-Rona-virus), life as we knew it was hijacked (unlawfully seized, appropriated, stolen, commandeered). Although Rona was not the first influenza pandemic to hit the world, she was treated as the first and the worst.
Many people in politics and the news media did their best to take advantage of this crisis – and they succeeded. It became okay to riot in the streets and destroy private and public property – but it was not okay to enjoy a meal out with your family. Rather than allow people to use their own common sense, the government thought it best to enact unconstitutional laws to protect us from ourselves.
It is difficult to come up with exact figures – but I think it is safe to say Rona has put several million more people out of business and out of work than it put in the hospital. The government’s response to the collapsed economy it created was to throw more and more money at it. Where is all this money coming from? The government has been broke and heavily in debt for several decades! It has no money!
Those of us in agriculture and rural America were least affected by Rona. We were not forced to close down our businesses. Social distancing has always been a way of life for us. Wearing a face mask is not necessary when you’re only around your family and your livestock. Ironically, several ag producers were able to take advantage of Rona. For example, those who sell food products, like beef, directly to the end consumer had a record year for sales and profit. It’s interesting how some people are always able to make the best of a bad situation.
The year 2020 will be remembered as a good year for me and for Pharo Cattle Company. I was unable to do a few things I wanted to do – like attend our Australia Bull Sale and the Professional Bull Riders (PBR) finals – but, all in all, we had a very good year. We sold close to 500 bulls last spring – without having any actual sales. Altogether, we sold over 1000 bulls to commercial cow-calf producers this year. Best of all… we saw more cow-calf producers than ever before begin the transition from no-profit ranching to high-profit ranching. This is beyond exciting!
Because of the drought, we are relocating all of the mature cows at PCC Headquarters – with the exception of a few old teenage cows. At this point, we hope to hold on to our bred heifers and heifer calves. We are sending our cows to four different PCC cooperative herds – three in Nebraska and one in North Dakota. These cows will be loaded on trucks tonight and tomorrow morning.
This brings back some memories of the first 12 years of the 21st century – some good memories and some sad memories.
Because of the drought, we are relocating all of the mature cows at PCC Headquarters – with the exception of a few old teenage cows. At this point, we hope to hold on to our bred heifers and heifer calves. We are sending our cows to four different PCC cooperative herds – three in Nebraska and one in North Dakota. These cows will be loaded on trucks tonight and tomorrow morning.
This brings back some memories of the first 12 years of the 21st century – some good memories and some sad memories. Relocating cows that were born and raised on the homeplace is somewhat akin to having a family member leave home for an extended period of time. It can be emotional. If you’re not careful, this kind of experience can bring about feelings of depression. Many of our subscribers know what I’m talking about.
Good from Bad… Several of our cooperative herds were started when we were forced to relocate cows. In most cases, Pharo Cattle Company would take the top end of the bull calves and develop them for the next bull sale. The future cooperative producer would take the top end of the heifer calves and created his own PCC cowherd. Within a few years the cooperative producer had bulls of his own that could be sold in a PCC bull sale.
There were a few years it was so dry in eastern Colorado we didn’t have enough grass to develop our sale bulls. This forced us to put them on irrigated circles of Bermuda grass in southwest Kansas. You do what you have to do. Those were tough years for us! Even so, Pharo Cattle Company grew more during those tough times than we ever did during the good times. You gotta make lemonade out of the lemons life hands you!
Not always easy… Sometimes, however, it isn’t easy to make the lemonade. More than once, our cow relocations did not work out. The remaining cows would have to be relocated again or returned home. Earlier this week, I looked back at a 2006 PCC Update. In it, I jokingly said, “Some of my cows have traveled more miles and visited more states than most of my neighbors.” Still true!
Helen Keller once said, “A bend in the road is not the end of the road… unless you fail to make the turn.” That is a very simple, yet profound, statement! It applies to all people in all walks of life. It has application for me – and it has application for you!
What word can we use to define a “bend in the road”? The first word that comes to my mind is “change.” Change is a normal part of life.
Helen Keller once said, “A bend in the road is not the end of the road… unless you fail to make the turn.” That is a very simple, yet profound, statement! It applies to all people in all walks of life. It has application for me – and it has application for you!
What word can we use to define a “bend in the road”? The first word that comes to my mind is “change.” Change is a normal part of life. It is also a normal part of business. Nothing stays the same. The present is different from the past and the future will be different from the present.
The sooner we make the turn in the road, the better off we will be. Unfortunately, most people hate change. Some hate change so much they resign themselves to being content with where they are. At that moment, their life is no longer enjoyable – and/or they start going out of business.
I encourage you to think about where your life and/or your business is going. Have you missed a few turns in the road? Are you as healthy and as happy as you would like to be? Is your business as successful as it should be?
What changes do you need to make? Once you identify the changes you need to make, MAKE THEM! Do it NOW! Procrastination is NOT your friend! Once you get back on the road, continue to watch ahead for future bends in the road. When you come to a bend in the road, make the proper adjustments – and Keep On Truckin’!
Since most of our subscribers are cow-calf producers… I want to get a little more specific (and personal) with this discussion. Are you expanding your cow/calf business and/or building wealth – or are you just getting by? If you’re not expanding your business and/or building wealth, you probably failed to make a turn or two.
The beef industry is not the same today as it was 50 years ago. Much has changed – and yet nearly all of today’s cow-calf producers operate as though nothing has changed. It’s no wonder so many are struggling to make a decent living. They forget how much things have changed in the last 50 years.
Fifty years ago… land could be purchased or leased for one-tenth what it costs today. That’s a BIG DEAL – especially for those who did not inherit a family farm or ranch! Fifty years ago, you could purchase a new pickup for less than $5000. Gasoline could be purchased for 25 cents per gallon. In the last 50 years, the cost of inputs has risen four times faster than cattle prices. If you think this trend will not continue, then you better think again.
If you are a cow-calf producer… your survival is dependent upon your ability to change with the times. It’s not too late for most producers to make the necessary changes – but time is of the essence. If you have not already done so, NOW is time to Change Horses – and NOW is the time to get started on the Ten Steps to Double Your Profits.
Cow-calf producers who want to have a prosperous future will need to make some major changes in their business. The sooner they take the first step, the sooner they will reach their destination. I will review the Ten Steps required to get on the right road. These steps are not difficult, but they will require a paradigm shift – which can be difficult.
Step 1… Focus on pounds and profit per acre – instead of per animal. There is a BIG difference. Trying to increase pounds per animal (bragging rights) will always have a negative effect on your profits.
Cow-calf producers who want to have a prosperous future will need to make some major changes in their business. The sooner they take the first step, the sooner they will reach their destination. I will review the Ten Steps required to get on the right road. These steps are not difficult, but they will require a paradigm shift – which can be difficult.
Step 1… Focus on pounds and profit per acre – instead of per animal. There is a BIG difference. Trying to increase pounds per animal (bragging rights) will always have a negative effect on your profits. The status quo beef industry has been focused on the wrong thing for 50 years.
Step 2… Purchase ultra-low-maintenance bulls that will produce cows that fit your environment. It is much easier and more profitable to produce cows that fit your environment than to artificially change the environment with expensive inputs to fit your cows.
Step 3… Increase stocking rates by over 30% with the right size and type of cows. Smaller, more efficient cows will always produce more total pounds – and those pounds will always be worth more per pound. Stocking rate affects profitability more than anything else.
Step 4… Utilize rotational grazing to increase forage production and stocking rates by another 50 to over 200 percent. Once again, stocking rate affects profitability more than anything else.
Step 5… Do more grazing and less feeding. The easiest money you will ever make is the money you don’t spend – and that money is tax-free. Let your cows harvest their own feed. That’s why God created them with four legs and a mouth.
Step 6… Remember you are in a solar energy-based business – not a fossil fuel-based business. You don’t need much in the way of vehicles, tractors and equipment. Let your cows do the work for you.
Step 7… Work with nature – instead of against nature. This can easily increase profits by $50 to $100 per cow.
Step 8… Use calving ease bulls to reduce death loss, decrease labor, increase enjoyment, improve fertility and shorten your calving season.
Step 9… Use genetics to fix problems – instead of spending money on chemical, technical and mechanical solutions that won’t last. Parasite problems are a perfect example of this.
Step 10… Stop associating with whiners, complainers and blamers. In addition to associating with positive people, you need to be careful about what you read. Most of the information being circulated is focused on increasing production per animal (bragging rights) – instead of per acre (profit). That is what put you on the wrong road in the first place.
Cow-calf producers who have taken these steps are two to five times more profitable than all of their neighbors. They have also substantially improved their lifestyle. Consequently, they have an operation the next generation is excited to become involved in. Agriculture must be both Profita-Bull and Enjoya-BULL to be Sustaina-BULL!
You can do it! These very successful producers have done nothing that cannot be done by others. Believe it or not, some of these producers did not inherit anything. They created their phenomenal success from scratch – simply by following the Ten Steps listed above. You can do the same thing – but you won’t go anywhere until you take the first step.
Quote Worth Re-Quoting –
“The journey of a thousand miles begins with one step.” ~ Lao Tzu
Visualize, if you will, an old cowpoke riding an old plug horse that stumbles along with its head just a foot off the ground. The cowpoke represents a lot of today’s cow-calf producers — perhaps most of today’s cow-calf producers. The old horse represents an outdated paradigm that will not allow the producer to be profitable. If the producer doesn’t change horses, he will eventually go out of business, or be forced to subsidize his business with outside income. At that point, the business is no longer working for him.
Visualize, if you will, an old cowpoke riding an old plug horse that stumbles along with its head just a foot off the ground. The cowpoke represents a lot of today’s cow-calf producers — perhaps most of today’s cow-calf producers. The old horse represents an outdated paradigm that will not allow the producer to be profitable. If the producer doesn’t change horses, he will eventually go out of business, or be forced to subsidize his business with outside income. At that point, the business is no longer working for him. He is working for the business.
The old-horse paradigm 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 old-horse way of doing things made sense 40 to 50 years ago. Unfortunately, that era is over — and it ain’t coming back! The old-horse paradigm also continues to be pedal-to-the-metal focused on increasing pounds per animal (bragging rights) — at the expense of pounds per acre (profit).
The new-horse paradigm is focused on making the most of FREE solar energy — instead of fossil fuel energy. It requires very few outside inputs. The cost to produce a pound of beef is often half that of the industry average. The new-horse paradigm is also focused on increasing pounds per acre — instead of pounds per animal. There is a BIG difference! Many PCC customers have successfully reduced their cost of production, while increasing their total production. There is a reason our customers are the most profitable cow-calf producers in the world.
The interest in our 2020 bull sales was totally unbelievable! As expected, many of the bulls were purchased by repeat customers — but there was an unusually high number of new customers wanting to purchase their first PCC Solar Bull. They see the light and are very excited about creating a better future for their families. They know the old horse needs to be put out to pasture. They know that if they don’t change horses, they will eventually go broke — forcing their kids and grandkids to get jobs in the city.
It’s as though the beef industry is at a major turning point in which a high percentage of cow-calf producers finally understand what Pharo Cattle Company has been talking about and promoting for the last 30 years. We really get pumped up visiting with these producers because they’re pumped up. They are excited about taking the first few steps of the “Ten Steps to Double Your Profits.” They all wish they had started sooner — but we assure them that in just a few years, they will be two to five times more profitable than all of their neighbors.
If success was easy, everyone would be remarkably successful. Unfortunately, very few people can be classified as remarkably successful. Success, however, does appear to be easy for some people. If you look closer, you will discover those people are very driven and focused. They make things happen. They see opportunities most people miss. They are not afraid to step outside their comfort zone. They are not afraid to try what others say cannot be done.
We believethere will be more opportunities for you and your family operation to advance in the next ten years than there have been in the last 30 years – but only if you are able to break away from the status quo,
If success was easy, everyone would be remarkably successful. Unfortunately, very few people can be classified as remarkably successful. Success, however, does appear to be easy for some people. If you look closer, you will discover those people are very driven and focused. They make things happen. They see opportunities most people miss. They are not afraid to step outside their comfort zone. They are not afraid to try what others say cannot be done.
We believethere will be more opportunities for you and your family operation to advance in the next ten years than there have been in the last 30 years – but only if you are able to break away from the status quo, herd-mentality way of thinking. The future belongs to those who are able to think for themselves. The future belongs to those who can successfully transition to a low-input (high-profit) program that is focused on increasing pounds per acre (profit) – instead of on increasing pounds per cow (bragging rights).
Everyone has some unique competitive advantages based on their location, their personality, their experiences, their acquaintances, etc., etc. Most producers, however, will never take the time to identify their competitive advantages because they are afraid to leave the so-called “comfort” of the status quo herd. They fail to realize they must be different to rise above the herd. The first step to becoming extraordinary is to stop being ordinary. Don’t be afraid to dream. Dream BIG while you are at it!