The economics of livestock and grass

Dallas Mount helps beef producers dial in their business practices, while also taking care of the land

Livestock farms and ranches can slowly become stale enterprises with owners satisfied to view them simply as infrastructure supporting a way of raising a family. Conceding to this long-term mediocrity is a dangerous stance for many operations.

Dallas Mount of the Wyoming-based Ranch Management Consultants (RMC) is in the business of helping ranchers transition from simply existing to thriving.

“Our company was founded on the principle of ‘knowing how to raise livestock is different than knowing how to run a business that raises livestock.’ We focus on giving long-time ranchers some business management skills to help them grow and be successful, producing the outcomes they want.”

RMC was founded by Stan Parsons, noted expert in agricultural economics and reproductive physiology. Dave Pratt, former range and livestock advisor with the University of California co-operative extension service, purchased the company in 2001. Pratt ran it until 2019, when Dallas Mount acquired it. Propelled by Parson’s original holistic approach to management, linking business and grazing to animal husbandry, the company has been aiding ranchers for four decades.

Mount says a variety of people attend their programs, from extremely successful, to some in financial stress searching for a different way of doing things. The range includes those transitioning to the next generation, managing for an absentee owner and ranching as a new occupation. Some are simply searching for better ways to operate.

“We get a pretty wide swath,” says Mount. “People are often looking to invest annually in themselves in professional improvement and we line up with that tract. You could say we get the top tier of the profession because those are the people humble enough to pursue this and attend.”

Tying economics and ecology together

With ranches dependent on grass and livestock, understanding how they connect with economics is vital.

“You can think of the ecology side as the engine running the business, so we want to keep special oil in it, tune it up and keep it running at top performance. When we get good at grazing management, we’re making sure the engine is running at its absolute best with the cows as the combine harvesting the production.”

Mount says livestock managers often spend much of their time and energy focused on the animals. “Many have never been taught to look beyond and down, at the ecology. Not only the grass, but the microbes in the soil, and the interrelationships between the pieces.

“At every step along the way, we challenge paradigms — this way of thinking, the belief system ingrained in us. And while we hold them as truth in livestock and agriculture production, sometimes they are unhealthy paradigms.”

From an economic and financial perspective, he sees three areas for potential change to increase ranch profits:

  • Overhead costs including land, labour and maintenance.
  • Direct costs such as feed and transportation.
  • Gross products derived from the value of production.

“Any one of these could be the weak link,” says Mount. “Once you find it, it gives management focus to develop strategies around improving it. We call it pruning the dead wood from the business.”

Grazing principles for growth

He uses the example of a struggling rancher with 20 pastures rotating four groups of breeding females in a 300-day grazing period. Older cows or replacement heifers might be trimmed away as the dead wood. The younger, higher-producing females could be concentrated in a single group. Dividing the yearly grazing period (300) by the number of pastures per group (20) delivers a shorter time per visit. The 20 pastures might be split into 25 or 30 fields, further reducing time spent in each pasture. This adaptation would greatly increase carrying capacity of the land.

Of course, location affects strategies and results. What may work in Wyoming or Nebraska might not fit as neatly in an Alberta situation. RMC teaches a set of grazing principles Mount believes work anywhere in the agricultural world. Simply stated:

  • Required rest in a paddock depends on growth rate.
  • Short grazing periods improve animal performance.
  • Higher stock density will improve uniformity of utilization.
  • Use the largest herd consistent with good husbandry.
  • Match stocking rate to carrying capacity.

“The straightforward principles apply,” says Mount. “Match the recovery rate to the rate of growth. This will change with seasons and climate. Forage intake declines as the quality and palatability of available forage drops. One hundred cows in a small pasture will use it more uniformly than a handful. Large groups create a ‘herd effect,’ generating jump-start succession processes, in turn improving water and mineral cycles. And finally, matching supply to demand, year after year and season after season. Graze up or down depending on speed of grass growth.”

Offering tools not prescriptions

“We’ll help give tools to come up with a plan, economically and financially, including the people pieces and cash flow, etc. Resources to develop whatever system will mesh with a specific operation.”

He believes these tools work. First, as a student 12 years ago, then assisting Dave Pratt as a teacher until he purchased the company and relocated it to Wheatland, Wyoming, he says he has been travelling the path of learning.

“I use the economic planning, grazing and business tools in my own cow-calf operation and in running the RMC business. I’m very passionate about it and it’s an honour to help ranchers from all over North America apply these concepts and lead change in their businesses.”

About the author

Contributor

Bruce Derksen lives, works and writes in Lacombe, Alta. He has 30 years of experience as a hands-on participant in numerous branches of the Western Canadian livestock industry.

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