Wednesday, August 31, 2011

Forage is extremely valuable

In case you haven't paid much attention to this blog, I will reiterate that when corn is high, the value of your grass is high. When five weights are bringing the same price per cwt as eight weights, your grass is very valuable. In recognizing the premium that will be placed on grass in the near future (a condition I think will persist for some time) I have made the decision to spread a ton of litter per acre ($35 per ton spread cost) over our entire ranch this fall. It's extremely dry right now and we've missed some rains that others in our area have gotten, most of our grass is still completely brown and crispy, but I still think it's a good decision. We'll keep our fingers crossed that we get some rain this fall. You need to think about ways to increase grass production on your ranches given the tremendous value that grass has at this point in time. If there was ever a time when fertilization will pay for itself, now is certainly that time.

Tuesday, August 23, 2011

Value of Gain at Record High

According to Beef Magazine and Derrell Peel, Value of Gain is at a Record High. The first line of the article: "If there was ever a time to be in the stocker business, this may be it, at least when it comes to value of gain." Now I'm not one to toot my own horn, but this is exactly what I have been saying, the reason we have moved from cows to stockers, and why I don't understand the argument of "high corn is bad for ranchers". What am I missing? Calf prices are record high. Value of gain is record high. Corn is record high. Got it?

So if value of gain is record high, can I also suggest that the value of grass should also be record high? I'm not sure why this has been lost on the writers at Beef and Drovers that continue to preach the evils of high corn, but as I've said many times before, high corn = high value of grass. It's really that simple. Have you locked in your leases for the long term? If not, you need to, and quickly. The landowner will end up with the abnormal economic profits, trust me on this. Act now to keep some of those abnormal profits in your pocket.

Sunday, August 21, 2011

Selling cows, drought, chicken litter

Well we sold a few hundred head of cows this week...had to send the bulk of them to Kearney, NE because the Joplin Stockyards cancelled their sale due to the drought and, consequently, lack of demand in this area. The cows did well and I am happy with our decision. I think the cow/calf sector will be very profitable in the coming years, it just doesn't lend itself well to mob we are utilizing our smaller acreage to keep our remaining cows and moving to stockers on our big ranch (the "goat ranch"). As good as I think the cow/calf sector will be, I think the stocker operation will be better.

We are just now getting recognized on the drought map as being in a severe drought in SW Missouri and I can tell you it's pretty bad. Pastures look like wheat fields in July and I've noticed a LOT of dead trees. We aren't nearly as bad as some parts, but it's still significant. We currently have enough grass to decide to keep our 2010 calf crop even longer to add some additional grass gain. It's so valuable now that it makes sense. Most people are feeding hay, we are doing pretty good...still have an entire 250 acres we haven't grazed at the goat ranch. Managed grazing is a beautiful thing. Hopefully fall will bring some moisture.

We are doing something this year I've thought a lot about but haven't done, spreading chicken litter on some pastures. As I've mentioned in the past, it takes grass to make grass, and we have some pastures at the goat ranch that simply don't give us enough production to be able to properly mob graze it. So we have decided to spread a ton of litter per acre ($35 per acre...gonna do about 600 acres) to hopefully give it a jump start this fall. I will keep you posted of the results. I think it's needed...we have 3 pastures (Rock Barn, North Rock Barn and Across Road) that just haven't responded to the mob grazing the way the other pastures have. I think the soil is just worn out from years of abuse and the litter should add some micro nutrients (in addition to the nitrogen) back to the soil to promote some growth. We are spreading this week so keeping our fingers crossed for some rain later this week.

Wednesday, August 17, 2011

What I've been trying to say...

From Drovers:

"Looking back another 10 years to 1996, opposite conditions were in place with large cattle numbers and high corn prices due to drought. Calf values were relatively low, but the value of stocker gains was high as feedyards favored heavier cattle. The price slide narrowed, with heavy feeders worth nearly 90 percent that of calves on a per-pound basis."

"This year, Peel says, features an unprecedented combination of low cattle numbers and high corn prices. While calf prices are historically high, so is the value of gain through a backgrounding or stocker phase. In Oklahoma sales the week of July 11, the per-pound price of a 770-pound steer was 97 percent that of a similar 470-pound steer. This implies, Peel says, that cow-calf operators have tremendous flexibility in production and marketing."

What it also "implies" is that the value of grass gain will be significant and grass stocker operators should be able to make some serious money. It's why I have continued to pound the drum that high corn prices are not necessarily bad for cattle ranchers.