I hav e done quite a bit of custom grazing at different times. As I travel and talk to people I sense that there is a lot of interest in custom grazing. People want to know is custom grazing a good idea, how much can I charge, where do I find a customer, what do I need to watch out for, etc.?
Custom grazing is a tool. I realize that each situation is unique. This article is not meant to promote or discredit custom grazing. What I hope to do is to present some ideas that may help you make a better decision as you consider whether to custom graze.
I want to begin with a quote from a good friend of mine, Mark Johansen. Mark and Deb Haupstein ranch at Stockholm, Sask. They took a Holistic Management course about eight years ago. They have been pleased with the results. Mark and Deb run a cow herd and do some custom grazing. Mark’s quote is: “We need to stop taking today’s profit at tomorrow’s expense.”
I hope we all agree on this point. If we take today’s profit at tomorrow’s expense, are we really taking a profit? If we take today’s profit at tomorrow’s expense we will find it more and more difficult to make a living as time passes. If we manage to be profitable today and at the same time add to tomorrow’s profit we are on the road to profit and sustainability. I think this is where we would all like to be.
If you are managing land, the first and most important goal should be to preserve and enhance its health. Grazing your own animals, custom grazing, haying or cropping are all tools that we can use to help us accomplish this objective. Next month’s article will help us explore how to use these tools.
If our first objective is to preserve and enhance the health of the land, we need to stop the over-grazing of individual plants to allow full recovery.
A vital component of custom grazing is to find and deal with an individual who understands the concept of win-win. This applies equally to the owner of the cattle and the grazer. I strongly encourage you to keep looking for the right customer. If you can’t find a reputable person to deal with you might be wise to do something else.
Custom grazing rates seem to be in the range of 40 to 45 cents per pound of gain. Some areas may be as high as 60 cents per pound. What are the rates in your area? What can you live with?
The most significant factor in determining the rate of gain during the summer grazing period is how the cattle were wintered. As a grazer you will likely have no control over this. One way to counter this is to have a minimum rate per day, (ie. 40 cents per pound of gain x 1.5 lb. = 60 cents per day). The rate of 60 cents per day then becomes the base rate. It applies if the cattle gain 1.5 pounds per day or less. If you do a good job of grazing and the gain increases, the rate also increases. This would be open to negotiation. An example might be that for every tenth of a pound increase in the daily gain the price goes up by a cent. This bonus would be calculated and paid at the end of the grazing season. This should be a fair system for both the owner and the grazer.
If the cattle are fleshy or poor quality, the grazer gets paid for his grass. If the cattle are green or high quality both the owner and grazer should benefit more or less equally. This might be a good example of a win-win situation.
Shrink is a huge factor in custom grazing. The weighing conditions both in and out should be carefully negotiated and fair to both parties. For example if you take a 100-day grazing season and have an average daily gain of 1.5 lb., the gain per head is 150. If the cattle came in at 700 and go out at 850, a 1 per cent change in shrink is 8.5 lb. That one per cent represents 6 per cent of the total summer gain. A 2 per cent change in shrink could reduce your summer gain by 12 per cent.
I would suggest that cattle should be weighed as close to home as possible. A pencil shrink should be used. Low-stress livestock handling will pay big dividends. If you are serious about staying in the cattle business, a legal scale might be a good investment. Some groups have bought portable scales that can be used on different ranches. There is at least one person offering custom weighing services in Western Canada. I suggest you check out what is available in your area. If you can’t weigh close to home you might be better to graze on a day rate.
Here are some examples of how different rates of gain can affect the grass and the income. Use your own numbers to decide what is best for you.
Let’s start with a 100-day grazing season and a gain of 2 lb. per head per day. The total gain will be 200 lb. If this excellent rate of gain can be achieved while we preserve and enhance our land, that is excellent. That is really the end of the discussion. However if the rate of gain is forcing us to sacrifice our land management we need to reconsider. An alternative might be to allow a longer recovery period. This will likely produce more total grass but a reduced rate of gain. If the daily gain dropped to 1.7 lb. but we grew enough grass to graze for a 120 days, our total gain would be 204 lb.
In this example our gain is almost the same but in the second case we achieve our goal of preserving and enhancing our land.
In another case we will have 100 steers gaining 1.5 lb. per head per day for 100 days. The total gain will be 150 per head or 15,000 lb. on 100 head. Using a rate of 40 cents per pound of gain our income is 15,000 x .40 = $6,000.
If we start with 700 lb. steers our end weight will be 850. The average weight will be 775. A steer consumes about 3 per cent of his body weight (85 per cent dry matter). In this example each steer consumes 775 x 3% = 23.25 lb. per day. Using a 100-day graze season and 100 steers, we require 23.25 x 100 x 100 = 232,500 lb. of feed.
Now let’s see what would happen if we reduced our number of head and at the same time increased our gain per head. This should be possible because as we reduce the severity of the graze we tend to improve the quality of the feed and the gain.
We’ll use the same land base but reduce the number of steers to 80. These 80 steers have the potential to gain more as they are grazing less severely. If they can gain 1.88 lb. per head per day for 100 days the total gain will be 188 per head or 15,040 on 100 head. Using a rate of 40 cents per pound of gain our income is $6,016.
If we start with 700-lb. steers our end weight will be 888 and the average