$1 Value of Gain

From a recent article: (link)

"For those operations able to retain cows, the price of calves should be at levels significantly higher than in early 2011 when 400- to 500-pound steer calves sold for $170 per cwt. For stocker operations, the price relationship between calf value and feeder value should still allow for value of gain to exceed $1 per pound with price opportunities much higher than that when markets fluctuate. The challenge will be to maintain production costs so that profits can be attained."

2011 Stockers Sold

On October 3, 2011 we sold the stockers that we purchased in May/June thru the Joplin Stockyards. If you recall we purchased 170 head on May 23 and 40 head on June 6...we took all of them to Mickeys and rotationally grazed them (we moved them every 3 or so days) thru some pretty decent grass. Obviously it was very hot and dry, but here are the results: avg weight in - 510 lbs, avg weight out - 575 lbs. The calves gained 14,435 lbs in 26,570 days for an average daily gain of .54 lbs. We lost 4 head that we know of (NOT GOOD), we sold 200, so there are 6 head still at Mickeys that we couldn't get out of the woods. We hope to get them rounded up and sold soon. We made money on these calves but only thru the dumb luck of selling them for a higher price per pound than we bought them for...if we could somehow figure out how to do this consistently, I think we've got a shot at making this stocker thing work.

2010 Calf Crop Sold...

On October 3, 2011 we sold our 2010 calf crop thru the Joplin Stockyards. We sold 353 head of source and age verified B2B calves (we actually sold 365 but 12 were my dad's), a handful came from Sullingers but those are offset by the handful that we didn't get to Joplin because they were left at the Goat Ranch on the neighbors. We will hopefully catch them soon and get them merchandised. Anyway, to keep things simple, let's just agree that we had 353 calves weaned off of the Goat Ranch this year. Those calves included all of the calves that we purchased on the Arkansas heifers and all of the calves that we early weaned and moved to Mickeys for several months. If you recall, those 353 calves were weaned from just over 600 head of bred cows/heifers, an absolutely horrible wean percentage. Scours killed over 200 head of calves in 2010 (you can read all about it in earlier blog posts). The 353 head we sold weighed an average of 568 lbs, brought $1.385 per pound for a total gross of $277,698. After hauling and selling expenses they netted $266,155 for an average net of $753.98 per head. I think it's pretty incredible to be able to gross $277K from around 1500 acres (several hundred acres of that is woods)....while at the same time it's pretty sad to think that the 200 head of calves that died from scours would have meant an extra $150,000 in my pocket. To think we could have earned this type of money from a measly 1500 acres is just astounding...we still did pretty damn good. Had we not tried to mob graze, we would have likely had only 350-400 head of cows and so would have weaned off a very similar number of calves. All in all, this has been a pretty good year. If you aren't lining your pockets in this market, you need to find something else to do.

Our calves likely had an average birth date of May 15th, 2010. So the calves were 16.5 months old when we sold them and weighed 568 lbs. That's just embarrassing. Yeah it was crazy hot and they didn't have the best forage thru the summer but holy crap that's bad. I'm excited to get back to mob grazing some stockers. Don't worry, there will still be plenty of stuff that I will post that will make you all feel very good about your own operations.

Dry, Dry, Dry

Conditions at the ranch are much worse than I had imagined. I hadn't been down in several months and although I knew it was dry, I had no idea how bad it actually was. The ponds are lower than I have ever seen them and like my manager said, "you should have seen them before the 4" rain." That 4" rain is the only appreciable rain we've had in months, and it just wasn't enough to really effect much. While the grass is green, it's very deceptive. A closer look shows large areas of dead grass with nothing growing. I have to admit that I feel incredibly lucky that we decided to sell all of the cows off of that ranch earlier this year. We sold the stockers on Monday, so now there is only a handful of heifers left at the ranch and they will be moved to Mickey's soon. We will leave the ranch empty until we feel it's ready to support some stockers...we had hoped that would be February, but I don't see any way we are going to be able to grow any appreciable amount of stockpiled forage to allow for grazing before spring green up. This is very disappointing but I guess it could be much worse. We're not nearly as dry as Texas/Oklahoma...but we're getting there.

Rain...finally

I've been disappointed that we haven't gotten the litter spread by now, but it wouldn't have mattered. We haven't had a (decent) rain since July...there was nothing green in the pastures and nothing actively growing. Well that all changed this past weekend as we got 4 inches in a 2 day period. They were supposed to start spreading today, so even though we didn't get it on early like we hoped, it might have been for the best. I'm hopeful that we can get some great growing weather over the next 30 days.

Public Grazing Fees

Wouldn't it be nice to pay 30% of the going market rate for your pasture lease? The government will get absolutely raped on grazing fees as the value of forage goes significantly higher. If you are renting from the government, congratulations! Lock in those rates for as long as you can. I will continue to preach this, but pasture rents are going to go much, much higher in the future so if you can lock in your current rents long term you need to do so.

Drought

While SW Missouri isn't nearly as bad as parts of Texas, it's still in an extreme drought as labeled by the US drought monitor and as witnessed by simply observing the countryside. Grass is crispy, trees are dying, ponds are dry...it's not pretty. We could not be more fortunate to have made the decision to sell our cows and go to stockers. We have plenty of grass to get our home raised calves to the first week of October when we will merchandise them thru the Joplin Stockyards. At that point we won't have a single animal on the Goat Ranch. Our hope is that by spreading a ton of litter per acre within the next few weeks and removing all animals and giving the ranch a rest, we can stockpile some forage for early spring grazing. The nice thing about running stockers is that if we don't get a rain and we don't grow any grass, we will simply wait to buy stockers until we have the forage to support them.

I think now is a great time to rent more grass. We are trying to rent as much as we possibly can for as long as we possibly can...if there was a better time to be in the grass raising business, I don't know when it would be.

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.

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.

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 grazing...so 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.

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.

Overwintering at Mickeys

This is primarily for record keeping purposes. We over-wintered all of our early weaned calves at Mickeys and the results are below.

April 20th we moved the early weaned calves back to the goat ranch. We hauled 175 hd--7 hd of which were wr 09 hiefers. 168 were b2b calves which means we lost 4 hd while at mickeys. The 168 hd had an avg wt of 444 - which is a total gain of 116# in 180 days for an adg of .64 lbs. In weight was 328# on Oct. 13 - I deducted 4900# from the gross wt, to account for the 7, 700 lb hfrs. Not a good gain with 3 lb per head per day of ddg supplement and a 2.3% death loss. This is very disappointing.

Weight per Day of Age 2008-2010

2008: wean wda=1.91, yr wda=1.75, gain from wn-yr wt=1.35 adg for 144d (steers only)
2009: wean wda=1.66
WR bulls 2010 wean wda=1.98, yr wda=1.75, 154 d gain=1.49 adg

Info for our records

Great Article

This is a fantastic article written by Darrel Peel that does a great job of explaining the relationship between forage value and cow/calf and stocker production. It's funny because it's so timely to what I've been preaching.

Corn Prices....Beef Magazine

I sent this letter to Beef Magazine:

To Beef,

As you know I am a loyal reader of Beef magazine and your newsletters. I’ve been dismayed by your magazine and your writers support of ending ethanol subsidies and deriding the high cost of corn. Can you please explain to me how high priced corn negatively effects most beef producers? I’m sure most of your readers consider themselves “beef producers” rather than “grass producers” (and likely don’t understand WHY they should love high corn) but the reality is that most of them produce grass, and they market that grass thru their cattle, whether they are cow/calf producers or grass/forage stocker operators. Since grass could be considered a substitute for corn (for beef, certainly not chicken or hogs, another reason to love high corn), the higher the price of corn, the higher the value of the grass your readers are producing. Take a stocker operator, for instance. Where a stocker operator might have been able to demand 35-45 cents per pound for the price of gain several years ago, he should now command twice that because even at the higher price, his gain is still cheaper than feedlot gains. Anytime grass gain can compete with grain gain, the higher the price of grain, the higher the value of grass. Yet over and over and over again, your magazine pounds on high grain prices. Why? I’m guessing it’s because you represent feedyards more than the average cattleman. And I’m not saying that I expect feedyards to lose money, I don’t. They must make money, and they will or they will go out of business. The way they operate may need to change, and cheaper corn may mitigate some of those changes, but in the long run high grain prices tremendously benefit the average cattle person. If you can supply me with a rational argument of why what I am saying is not true, I will listen. But as an economist and “grass producer”, I love high priced corn, and not just because it helps my grain farming brethren, but because it helps me get more value from my grass.

Nathan Sanko



And this is a response from Wes Ishmael:

Hello Nathan,

I appreciate the recent note to Joe Roybal that you copied me on.

Here’s why I have a problem with the ethanol subsidies and why many of the cattle producers I visit with do. It’s nothing you haven’t heard before.

First, as a matter of national security, tying the price of food to the price of energy, besides subsidizing the use of foodstuffs for fuel, adds risk; never minding the humanitarian aspect of artificially increasing the cost of a global food staple beyond the means of many.

Second, though truly ‘free’ markets in this country apparently began giving way to regulated ones long before I was born, subsidies artificially skew the market. That’s not only when subsidies begin and end, but for all the time they exist, as well as the adjustment period before and after they’re implemented. In fact, once a subsidy is implemented, I don’t know that you ever have a true market again. With ethanol as an example, the federal government has thrown various subsidies at it for decades—at least since the Energy Tax Act of 1978.

With the Renewable Fuels Standard and Volumetric Ethanol Excise Tax Credit and tariff on imported ethanol, investors kicked production plant development into full gear. When those subsidies decrease or go away, an artificially high production capacity will still be skewing the market.

I thought Wally Tyner, an ag economist and energy policy specialist at Purdue University did a fine job summing up part of that point recently:

“The renewable fuels standard requires 15 billion gallons of ethanol be consumed per year by 2015, regardless of what the price of corn is and regardless of what the price of crude oil is. Corn could be $2 a bushel or $10 a bushel, crude could be $50 a barrel or $100 a barrel and that 15 billion gallons has to be there. That means ethanol production is totally unresponsive to price. There's no flexibility.”

That doesn’t sound like a ‘market’ to me.

Next, from a cow-calf producer’s point of view—the primary audience BEEF is aimed at—higher corn prices typically mean lower calf prices. They still do, though as far as I can tell, no one has yet figured out the exact relationships and degrees of those relationships among interrelated commodities that began shifting with the commodity bubble a few years back; fed cattle tracking oil prices more directly, for instance, due to corn’s stronger connection to energy markets. Besides, the direct impact, higher feed prices in between increase equity requirements and financial risk.

If, I have the grass and wherewithal, I agree with you, the higher grain prices are, all else being equal, the higher the value of gain for stockering cattle. A margin operation or enterprise can exploit such changes in ways that fixed cost ones never can, as you know. Even for margin operators, though, the equity requirement and financial risk is again larger, as is the cost of price risk management. Related to that, the increased price volatility that has accompanied corn prices that are also driven by the energy market has in turn increased the price volatility of calf and feeder prices.

That’s true even for an operation that grows both corn and cattle and has the opportunity to mix and match the highest and best use for the corn they produce.

None of the above factors in how artificially high ethanol production has birthed an industry of Distillers Grains, which continue to skew basis relationships for stocker and cattle-feeding rations based on DG availability.

At the same time, increased corn prices have increased the price of farmland—besides taking more marginal land away from pasture—which in turn generally increases the cost of buying or leasing grass. That’s before considering the impact this has on increasing hay costs, which is a key driver to annual cow carrying costs for a majority of cow-calf producers.

Through it all, higher corn costs—all higher costs—ultimately wend their way through the system and wind up in the retail price of the product. The price point of beef has always been a challenge, relative to competing protein sources. What appear to be permanently higher corn prices—not solely driven by but certainly exacerbated by ethanol subsidies—makes beef even less competitive.

In my opinion, tight cattle supplies and amazingly robust beef export demand have masked the full brunt of what higher corn prices have done to the cow business. Calf prices are high, which used to be a sure invitation to herd expansion nationally. Notwithstanding the forced liquidation due to drought and flooding this spring and summer, cow slaughter continues significantly higher than the five-year average. Prices are up and hardly anyone wants to think of expanding. In my simple view it’s because higher input costs, including corn, means that margins are as narrow as they were—there is no economic incentive for expansion.

On one hand, none of that would seem to matter, given the increased production with few cows over the decades, as much due to the evolution to an annual cattle slaughter almost exclusively driven by mature-weight cattle. But, in my opinion, the industry’s infrastructure depends as much on cattle numbers as it does raw tonnage. Every outside force, every artificial market impediment, such as ethanol subsidies, puts the cow-calf producer—the originator of those cattle numbers that the rest of the industry depends on—at greater risk. In turn that further jeopardizes the industry infrastructure, which subsequently adds to producers’ risk, that in turn jeopardizes infrastructure…etc. etc.

That’s my view.

Wes Ishmael


And this is a response from Burt Rutherford:

Nathan—

Thanks for your e-mail and your thoughts on why high corn prices are good for cattlemen. Let me add my thoughts to those from Wes.

Your take on the situation is a classic example of the conflict that exists in our highly segmented business between what’s good for individual producers vs. what’s good for the industry overall.
Clearly, as you state, high grain prices drive up the costs of a lot of things in the cattle industry, including the value of grass gain. While that’s good for you, is that best for the industry? That’s a question we’ll never answer because of the many conflicting and competing factors and points of view that exist in an industry with somewhere around 750,000 individual entrepreneurs, some of whom are motivated by profit and some of whom are not.

However, high grain prices also tend to drive the prices of other commodities—feeder cattle , to name one—lower. We saw that dynamic play out this week when corn prices dipped and feeder prices increased.

Here’s why we think government-supported ethanol is, overall, a negative for the cattle industry. Anytime you introduce an artificial shock to the cattle market--and diverting 40% of the corn market in a four year period to a government-mandated use qualifies as an artificial market shock, I think—there are going to be any number of unintended consequences. Among those consequences are, in our opinion, a structural change in the industry driven by higher and higher feed prices that will lead to further consolidation, certainly at the feedyard level and probably at the cow-calf level.
In short, we have a smaller industry, and likely permanently so, partly due to an ethanol-fueled grain market.

Some of those structural changes are land-based, as we see more and more pastures plowed under to grow corn. Some of those changes are market-based, as we see more and more feedyards struggle to compete for feed in an artificially-pumped up grain market; and cow-calf producers struggle with higher input costs as other feeds, like hay and supplements, rise as well.
Distillers grains, be it wet, dry or somewhere in between, mitigate that to some extent. But only if you’re close enough to an ethanol plant to make it cost-effective to transport it. If you are, you’re in a better competitive position than those who aren’t and must pay higher transportation costs.

We have no problem with freely-functioning markets dictating production practices and geographical distribution of cattle production. We have a big problem with an artificially-driven, government-mandated market driving structural changes and geographic shifts in the cattle business.

If you’re producing grass-fed beef and selling directly to consumers or running stocker cattle and getting all your gain on grass, that doesn’t affect you. But if you’re one of the majority of our readers, 80% of whom are commercial cow-calf producers, that’s concerning. And that’s why we’re concerned as well.


Burt Rutherford
Senior Editor
BEEF magazine


These are both very well thought out responses and I appreciate them sharing their views. But I still disagree....I responded:

Wes,

Thank you for the very well thought out response. First off, I HATE subsidies of ANY kind. If you are going to rail against subsidies in general, fine, but why single out ethanol subsidies? As long as the government is going to dole out money, I would prefer they go to agriculture. I cannot and will not argue the MERITS of the ethanol subsidy. Further, I cannot and will not argue the merits of ethanol as an energy source. My primary point was the perception, exacerbated by articles in Beef by “experts” that many people rely on, that high corn prices (stoked by ethanol subsidies) are somehow bad for cattle producers. As a cow/calf producer myself, if the stocker operator can “earn” twice the amount of money he was able to a few years ago (because of high corn prices) than he can afford to pay ME more for my calves. We can see that in the current market and I don’t see that changing, regardless of other factors in the industry. Now to your point about having to pay more for grass, you are absolutely correct. The returns will ultimately go to the owners of the capital (the land)….regardless of whether you are a farmer or rancher. But WHO CARES? If you are a commodity producer, you will always earn just enough, regardless of the price of corn (economic fundamentals assures us of this)...I would hope that many farmers and ranchers actually OWN some of their land and therefore profit tremendously from high land prices, which you have agreed is a direct result of high corn prices. Again, how is this a bad thing? And even if they don’t, as commodity producers, they are insulated from increasing input costs (at least in the long run) and shouldn’t care about rising land prices.

As to your point about expansion, I will tell you why you don’t see expansion, because there is no grass. I would love to expand, but I can’t find the grass to do it with. Anywhere possible, producers are plowing up grass to grow corn, a direct result of high corn prices. But I ask again, why is this a bad thing? Supply side fundamentals (among other things) make my current operation much more profitable than it was with the same amount of cattle. I’m ok with that. So we aren’t expanding?? So what?

To your point about beef’s ability to compete at the retail counter, I say again, so what? Why am I upset that the product I produce now costs x% more than it did a few years ago? Why would I want the price to go down? I’m not the least bit worried about demand erosion….rising incomes in other countries (and therefore a rising demand for protein) has more than made up for any lost demand we have seen domestically and I’m confident it will continue to do so. I’d love it if my product was priced so high that only a select few could afford it…I have a hard time understanding why I want the price of my product to fall. Once beef becomes uncompetitive (price wise) with other protein sources, the price will fall….as long as it continues to rise, it is obviously still competitive. The market will determine the value of beef, and I hope it determines a price as high as possible.

To conclude, I stand by my assertion that high corn prices are not a bad thing and you do a disservice to your readers by continuing to beat that drum. Preach away about the problems with subsidies, but don’t single out ethanol.

Nathan

The visual difference between mob grazing and rotational grazing

Compare these three pictures. You might recognize the one picture from a few years ago when we mob grazed the stockers. They ate every leaf on every tree sprout, most of the brush, musk thistle, and other forbs. The other two pictures show the effects of rotational grazing...not a single leaf has been touched. The stockers selectively graze and the trees are left untouched. We are purposely not mob grazing the stockers this year as we attempt to get maximum gains on our home raised stockers before going back to mob grazing late this year/early next on purchased stockers. It drives me crazy to see this selective grazing: First, we are getting NOTHING out of the incredible amount of forage that is left untouched and Second, we are getting zero brush/tree/weed control thru defoliation.

It's pretty obvious to me that the best way to utilize the forage on this particular ranch is thru mob grazing. There have certainly been set backs, but all in all, mob grazing has shown positive results.

In case you missed it...

You need to read this article: Now Serving One Billion.

Make sure you don't just read it...READ it and think about how it will effect you. Try not to think about tomorrow or next year, think 5, 10, 20 years down the road. What do you think this means for beef prices? Corn prices? Land prices? It's clear to me that the main driver of this train is the country with 4 times the number of people as the US with incomes rising at 4 times the rate of ours.

Beef Magazine June 2011

Harlan Hughes has an interesting article in this months Beef. He calculates feedlot gains (at $6.77 corn) to cost $.83 for the feed ALONE. I've talked before about how if you are a grass producer, you should love high corn prices. Well, if feedlot gains are costing $.83 just for the feed, than stocker operators should be getting close to $1.00 per pound to grow calves. Even at $.80 there's great money to be made in stockers. It makes Steve Kay's statement in his article in the back seem even more stupid. "The industry is seeing progress...on the industry's fight to end support for the ethanol industry." Hate to break it to you, but this is not good for those of us selling grass (through our production of beef). Let's see, we've had ethanol subsidies for the past several years while at the same time we've had some of the highest prices for beef we've ever seen. Hmmmm. Ethanol subsidies have increased the value (and price) of corn, which has increased the value of our grass....what's not to like about this? I can live with getting $.80 for the value of gain. As long as grass is a substitute for corn, why do we want corn prices to fall?

Cattle prices, cows, stockers and the future

There are a lot of cow calf producers that think they are in the cat bird's seat given current calf prices. It is indeed a good time to be in the cow/calf business. But I would suggest that this situation will change. The reason calf prices are so high is because there is a glut of feedlot space in the market. Feedlots have very high fixed costs given the enormous capital requirements of pen space and feed production. Business econ 101 tells us businesses will (in the short term) run at a loss so long as they can cover their variable costs....in other words they will LOSE money so long as the money they are losing is equal to the cost of NOT feeding a single animal. Obviously they can't do this in the long run. In the long run, the most inefficient businesses will go out of business until the remaining businesses can earn a profit. This is what will happen in the feedlot industry. To summarize: Feedlots are overpaying for cattle so that they can keep their feedlots operating to a point where they can cover their variable costs. They are all likely losing money. This won't continue forever. Once some capacity gets taken out of the market, feedlots will start to pay prices for cattle that will get them back to profitability. Given the high price of gain, prices will be much lower for 500# calves than for 800# calves. As long as stocker operators are dumb enough to price their grass gain at a significant discount to the cost of feedlot gain, the feedlots will buy only heavier cattle and the cow calf producer will continue to be the winner. Once stocker operators realize that they can price their grass gain commensurate with feedlot costs of gain, calf prices will feel downward pressure and the stocker operators will be the winners. How long will this take? I have no idea. I hope not long since we are moving to stockers. I will say that if you know someone who is still charging 50 cents per pound for gains, load them up with calves!

Wintering Early Weaned Calves at Mickey's

We early weaned 172 head of calves in October and hauled them to Mickeys. They had an average weight of 328 lbs. We moved them back to the Goat Ranch on April 20, and they had an average weight of 444 lbs, for an adg over the 180 days of .64 lbs...awful. We supplemented some ddg (guessing 2-3 lbs per day) and lost 4 head (we hauled 168 head back to the Goat Ranch)...a 2.3% death loss. Awful. I'm not sure why we can't get better gains, but this is discouraging considering we are moving to a stocker program that will utilize stockpiled forage for the first couple of months. I'm hoping poor genetics (all calves were first calf heifers calves) and poor grass at Mickeys were to blame. I'm still hoping we can get 1.5 lbs adg in our stocker program....we'll be finding out soon enough.

Rotational Grazing

So this year we are moving to stockers this fall. This spring we have only 400 or so stockers and a few hundered cull cows in two different groups at the goat ranch. We are going for maximum gain since we will be selling everything in 30 days or so and then not restocking until next February...so the grass will have plenty of time for regrowth. To get maximum gain, we are rotating the stockers thru large pastures every three days. The grass at the goat ranch this year is awful. It's better than the neighbors, but the undergrowth is only 4-5 inches tall. Two years ago when I mob grazed the stockers, I could barely drive the four wheeler thru the grass. We had at least 12 inches of undergrowth. I went back and looked at pictures from 2009 when we mob grazed and the grass we had was unreal. Although we mob grazed the cows last year, I don't think we did nearly as good a job as we did in 2009. I'm excited to go back to mob grazing a group of stockers. Our grass production was at least 50-60% better.

Very Good Article...

I found this article to be very interesting...anyone in agriculture should spend the time to read it. As we continue to use crop land for the production of energy instead of the production of food, and as China continues to demand more and more resources, commodity prices will continue to increase. Now would be a good time to execute long term leases on the land that you are leasing.

This is why I'm so disappointed about our conception rate

This article explains that BCS at calving is the key to rebreed rates. And I know our cattle were in good shape at calving and didn't lose much condition between calving and rebreed.

Stocker gains on E+ fescue/legume pastures

When I ran stockers a few years ago I fed 3 lbs per head per day of pelleted ddg all spring and summer. The stockers gained 1.6 lbs per day. I am really hoping that we can get 1.5-1.6 lbs adg on stockpiled forage and spring growth without ddg supplement(Feb 15-July 15) because ddg prices are sky high and feeding it really takes a lot of profit out of the calves. I think we will try it this year and keep our fingers crossed. I plan on having ddg on hand and feed it as the calves manure dictates, but I'm hoping that is seldom if ever. Interestingly, there is a ton of info on the internet about stocker gains on fescue and fescue/legume pastures, unfortunately results range from under a pound to 2.5# adg....hardly anything to rely on. If the stockers only gain a pound a day, we'll likely lose a chunk of money, but I think it's a chance worth taking. I feel a little like the degenerate gambler who's lost the past 10 hands but who's now thinking "I'm due!"

Spring has sprung

The grass is really starting to green up at the ranch. I'd say we have an inch or two of new growth and with a nice rain a few days ago and 75 degree sunny weather today and tomorrow, I'm hoping the grass really starts to pop. We are pretty much out of stockpiled forage and so will now begin the very frustrating task of "chasing grass". With only a few hundred head of our calves and a few hundred cows at the ranch now, the grass should handily out pace them. We hope to have everything off by July and stockpile forage until bringing stockers in in Dec-Jan. I have to say I'm pretty happy with the grass at the ranch. It looks a little better than the neighbors and I'm confident that it will quickly out pace any other pasture in the area...at least that's what I'm hoping. I was going to take some pics, but there just wasn't anything very compelling to show.

Our calves are framey and not overly fleshy so should do very well on the spring flush. The biggest concern is the high protein in this early grass/legumes that produces the sheet-cake manure...I don't think the calves do very well when that rumen is clearly out of sorts. I've discussed with Hal (at length) the possibility of keeping stockpile all the way up into May so that the cattle are never eating that new growth fescue/clover that creates issues. I also hate chasing grass...I know that when the grass is only 3-6 inches tall, a single bite takes it down to the ground and that is NOT what any grazier wants to see. To run on stockpiled forage up into May will require a lot of management, and most likely push our stocker purchase back into late Jan or even Feb. We would like to keep the stockers for 150 days. If we want to run on stockpile until May 1, then we would turn cattle in 75 days prior to May 1 (Feb 15) and pull out 75 days after (July 15). I am very concerned about water quality if we keep the calves into July, but have decided that if we make 150, 10 acre pastures (about what we have done in the past), we could move twice a day and hopefully be able to get to fresh water at least twice a day. I think this is very workable. I will go through my calculations in a future post of how we are going to determine our stocking rate.

Preg checked the cows and worked the calves

I think I'm starting to understand why this blog is popular with people: everyone reads this and instantly feels much better about their own operation. So we preg checked the cows at the goat ranch last week and we got a 55% conception rate (for a 75 day breeding window). We've never had a number that bad and of course a logical person would blame the mob grazing. Maybe I'm just blind to the obvious, but I'm not ready to do that. We calve in May and June which means we breed in August and September. This past summer was record hot and Hal and I think that it had a significant effect on our bulls and to a lesser extent our cows. The cows were in pretty good shape (BCS=5) at calving and we know that is by far the most important factor in getting them rebred. I just don't understand how the mob grazing could have had much of an impact. Anyway, I'm extremely disappointed and will now be selling off nearly half of our cows in a few months (we're going to hold them for 60-90 days to try to get them bred before we sell them). I think the future is extremely bright for cow/calf producers, but I have to admit I'm looking forward to running stockers.

News flash...

Grazing of pasture can improve soil quality and grass yield We've landed on the moon!

Also wanted to include a link to my new company...in case any of you are looking for atv or utv wheels for your four wheelers.

I'm always amazed at the power of the internet...An email from France

Hello Nathan,

I'm a young crop advisor in Normandy, north west of France, exactly 15miles where André Voisin used to farm. My parents are farmer (mainly crops : potatoes, flax, beet roots, wheat...) and even if I'm not a cattle man I read all your blog with a lot of attention.
I did an internship on a farm in Colby, KS in 2008, and met Jey Fuhrer from the NRCS of Bismarck, SD when he came to France. He showed us what Gabe Brown did on his farm (http://www.sustainableranching.com/) and I was very interested about "mob grazing".

I'm reading "Grass Productivity" from André Voisin and I am a bit disapointed on some points. André Voisin (and the other who followed him ) told us to begin grazing at 9" and to go out of the pasture at 3" after 3days of stay on the same paddock. It is known that at this high the grass is at its maximum value.
You are leaving the grass to rest for a long time, wich is very good for its productivity, but according to your pictures you are coming back when the grass is very tall. Is there a nutrition reason why you are doing that ? Voisin worked mainly with dairy but he wrote that he was also right for cattle. In the spring he also recommend to run the cattle when the grass is just regrowing to top off all the plants, give some food, and not having to run after grass growth that would be too tall... what is your opinion on that ?

I read some articles on mob grazing and holistic management. I don't understand what is the advantage of having some grass trampled. I understand it can provide food for soil life, but in France I found that leaving some grass behind the cows leads to a poor regrowth, so I don't know what to think.

The flora of your field may change with mob grazing but I think you will see it along the years. I would like to thank you about your blog, I'm checking it regularly, I like the weed pictures and would be curious to see how it will turn this year.

Victor

And my response:

Hello Victor,

Thanks for the email. I grew up not far from Colby, KS…small world. Voisin’s book is very interesting and I learned an enormous amount from it. The one big thing I took away was the importance of observation. I spent many hours watching my animals graze…I would never have done that before reading “Grass Productivity”. Voisin was a master of observation.

There is a lot of talk around when to turn back into a pasture to graze it and how tall the grass should be. I just read an article in The Stockman Grassfarmer about the importance of energy versus protein and I agreed with much of what was written. When I ran stockers a few years ago and even with my cows last year, in the early spring we see one to two months of what I call “sheet cake” cow manure…the manure is very runny and green. It’s a clear sign of too much protein and I have seen the cattle perform poorly when they get to this point. It is important to keep your cow patties looking like pumpkin pie. It is a good sign that the cattle are eating a balanced diet. I would suggest to you that you observe your cattle’s manure versus the height of your grass….experiment with it. You will quickly find out what works. All grass is different, so I can’t tell you how tall your grass should be, but you will quickly learn what is too tall or too short simply based on the manure patties. As the grass get’s shorter, your protein levels will increase and your manure patties will get runnier, as it gets taller, your energy levels will increase (and protein decrease) and manure patties will firm up. So it will depend on the class of cattle that you are running (ie: stockers need more protein than cows, wet cows need more than dry cows) and the relative protein values in your grass that determine when (how tall) you should be grazing your grass. I personally like to let the grass/forage get as tall as possible (maximum grass production), it seldom seems that we are lacking in protein, but we have worked hard to get clovers started that are likely increasing the protein levels in our forages, regardless of height.

I think the trampling of the grass is absolutely a critical piece to the success of mob grazing. If you can get the grass trampled down into the soil (or at least making contact with the soil) it’s just like you have fertilized that ground. I have been amazed with the quality and quantity of regrowth we get when we do a good job of trampling the grass in. I’m not sure why you are seeing that it is hindering growth…you need to make sure that the grass is being “trampled” into the soil and you are not just leaving some grass behind. If you are leaving the cows for 3 days, you are likely NOT trampling in any grass. 3 days is way too long to leave the cows on a pasture and it would NOT be considered mob grazing. To get to mob grazing, you need to at least move your cattle every day, and preferably twice or more each. It’s the only way you can get your densities up to take advantage of a true “mob”.

Thanks again for your email and best of luck in your grazing….keep me posted as to your results!

Nathan

New Study Reveals Crossbreeding Advantages

Crossbreeding Pays
Most of you Beef readers will be shocked to learn the results of a new study funded by the Herford Association that shows an economic advantage to crossbreeding. And why are we still spending money on this? We've landed on the moon!!!!!!

Letter from a reader

When I started this blog I really didn't think anyone would read it and I really didn't care...it was a way for me to keep track of things we'd done at the ranch and a nice visual and written history of our successes and failures along the way. I wanted to look back on it to learn what had worked and what hadn't. But I've been amazed how many emails I get from people that have stumbled onto it and are wanting to learn more about mob grazing. I'm so happy that this blog can be a benefit to those who wish to read it...it never crossed my mind that so many people would want to discuss mob grazing with me! Since I haven't been posting much I decided to post an email I got recently and my response. Hope your winter has been as nice as ours!

Nathan,
I was wondering if you came to any conclusions on your problem with scours. Sounds like you are moving to an all stocker operation so I wasn't sure if you would be discussing the scours problem any more so I decided to email. Do you think it had anything to do with your higher utilization rate? I read that you were trying to eat more to control the brush and thought maybe that had an ill effect on the calving situation. After reading alot of what Greg Judy is doing, sounds like he had quite a train wreck while focusing on landscape. Sounds like things improved after he went to focusing on cow performance, especially last 90 days before calving. His target now is 30% graze and 70% trample, if I understand him correctly. I was also wondering if there was a relationship between the bcs of cows with problem calves and those that had calves without scours. I do not have near the numbers that you have, but have noticed that some of the cows just haven't adapted to the low inputs and mob grazing well. I had a lot of pinkeye this fall and it didn't matter the condition of the cow, as some would suggest. I also have read that bcs at breedbac time can have an influence, and, if that is the case, alot of my cows were on a downhill slide during the rough winter weather that we experienced last year here in northwest Missouri. I turned the bull in Dec. 1 and the weather really was bad from Christmas day on. Maybe there is some truth to that theory?? and the cause for my pinkeye.
Last year was my first trial run with the mob grazing with mixed results. I sure didn't do it well enough to have near enough stockpile. Ragweed was terrible, and i was not sure if it was the perfect ragweed year or my grazing practice that caused it. I definately did not want to sound like I knew a lot about the mob grazing, quite the contrary. Reading your blog is great and I just was hoping there you had found some answers so some of us following in your footsteps don't have the same problems. Thanks for reading and I hope you carry on with your blog and wish you luck with your stockers.
KR

Hey K,

Thanks so much for the kind email. There is no doubt that last winter had a negative effect on the cows. It was the toughest winter we’ve had here in recent memory. That said, I thought the cows were in pretty good condition going into calving season..I would say they were 4-6’s with the 4’s being the older cows. I think by far the most important thing in preventing scours is bcs at time of calving and I really think ours was adequate…certainly not bad enough to see the kind of train wreck we had. At the end of the day, I think it was a combination of a lot of things with the 2 primary culprits being 1. The stress on the calf when it got left by its mother during a move and 2. The introduction of some purchased bred heifers/pairs a few weeks before we started calving. We can solve for problem number 2 by not introducing any outside animals that close to calving, but I have no idea how to solve for problem #1…we tried about everything this year with little success.

Mob grazing will definitely separate the weak…our weak cows just fell over dead…I’m a little embarrassed to say that, but it happened. We had a few cows that really didn’t look that poor that just gave up…we blamed some of that on the origin of the cows (Wyoming/SD) and the fact that they are relatively straight bred angus, but the mob grazing certainly hastened things. The interesting thing was that we had more grass this past 12 months than we’ve ever had. The cattle were never hungry. I think the strong cattle simply got the best groceries, the weak got enough to eat, but it wasn’t the most nutritious. I’m very comfortable with the way we graze a pasture, which is probably around 60-70% utilization, 30-40% trompage. Not saying Greg is wrong, we just do it differently. I don’t worry much about ragweed…there’s always a time of year during the mob grazing season that hits that ragweed just right and it goes crazy. It doesn’t bother me a bit, our cattle graze it all down the next time thru. I don’t see weeds, I see forage.

To conclude, keep tinkering with your mob grazing until you get to a situation that works for you. Everyone has different challenges and different goals. And while I am moving to stockers next year, I still believe a person can mob graze a cow herd, it’s just a hell of a lot harder than mob grazing stockers. Two years ago I could move 800 head of stockers in 6 minutes. I would spend 15-30 minutes building fence and 5-10 minutes moving stockers and I would go eat breakfast at 7:00 am wondering what the hell I was going to do the rest of the day. With the cows, my ranch manager and I worked some days from sun up to sun down chasing sick calves and trying to get the cow herd in one bunch for most of the calving season….I still have nightmares. And I think stockers do a much better job of “mob grazing” than the cows do. So my mind is pretty well made up. There’s not much to report on the blog during the winter…we should have more than enough stockpile to get us thru the winter which means another winter of feeding ZERO bales of hay. It’s nice to say that knowing we are running over 50% more cows this year than we were 3 years ago.

Thanks again for the email,

Nathan