Shifting focus from production per cow to production per acre adds up to a more profitable cow-calf operation, says Kit Pharo
Which is more important, increasing profits or production? This is the question rancher and seedstock producer Kit Pharo posed at a recent holistic management gathering in Valleyview, Alta. Pharo has strong opinions, speaks his mind and says he doesn’t care what other people think.
“I may not always be right, but I am never in doubt,” he says. He challenges producers to look outside the box and not get trapped in a way of thinking.
Pharo thinks livestock operations should be profitable, enjoyable and sustainable. If they are not the first two, they certainly will not be the last. A business is not sustainable unless it can be passed on to the next generation.
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“The existing beef industry is a result of a time when land was cheap, feed and fuel were extremely cheap, and labour and equipment were cheap. None of those are true today.” He states that period is over and not coming back. We are at a turning point. What worked for the last 20 years will not work for the next 20 years.
“People for the most part are afraid of change, and it is worse as we get older.” Pharo adds people must “dare to be different.” Paradigm shifts are hard because they require people to admit they were wrong.
In most industries, innovation is accepted and implemented in 17–24 months, says Pharo. In the cow-calf business, it is 17–24 years, he says. He referred to the idea of diffusion of innovation, which is a bell curve. First come the innovators, then the early adopters and next the early majority.
Pharo says producers can calculate profit by subtracting expenses from income. Income is production x market value. To increase profit, cut expenses or increase production, as those are the areas producers can control, he adds.
“The easiest money you will ever make is the money you don’t spend, and it is tax-free.”
Producers can increase profit by increasing production, “but only if that is based on per acre, not per animal,” he says. For the past 50 years, ranchers have exclusively focused on production per cow.
“Stocking rate affects profitability, or lack thereof, more than anything else. And smaller cows will always wean a higher percentage of body weight. The most profitable ranches make the most efficient use of available forage resources on their ranch.”
Three keys to improving pounds per acre are:
- planned rotational grazing
- matching the production cycle to forage reserves
- matching cow type to forage resources
He says reasons for planned rotational grazing include:
- reducing or eliminating supplemental feeding
- improving the rangeland quality, quantity and diversity
- increasing the total production per acre
To support his ideas on cow size, Pharo says that at least 65 per cent of annual cow costs are spent on feed and 70 per cent of the feed the cow consumes is strictly for maintenance, so only 30 per cent goes toward production. Form follows function, and bigger cows eat more than smaller cows, he says. Heavy-milking cows require more feed for maintenance, even when they are not lactating.
“Milk is not a maternal trait. It is a growth trait and the most expensive, so be careful selecting for milk.”
He also says the maternal trait of fertility is inversely related to high milk production. Pharo believes there is a straight-line correlation between cow size and production cost. He cited work done by Kris Ringwall at North Dakota State University’s extension service indicating the percentage of body weight weaned decreased as cow size increased.
The environment is the limiting factor for weaning weights, says Pharo. “The most important trait to select for is low maintenance requirements, which improves fleshing ability and fertility, essentially making a cow who can do more with less. Easy fleshing cows that can get bred and stay in the herd.”
He aims for a frame score of three to four at a mature weight of 1,100–1,250 pounds for the cows. He did acknowledge with our winter conditions in Western Canada that cows need more mass and they need a lot of volume to convert low-quality forage into pounds of beef. The ratio of cows per bull is easily 40 and often will go up to 60. Heifers are bred at 14 months.
“We are in the business of converting solar energy into a high-quality food product. And above all, keep it simple,” Pharo says. Adaptation to change is critical, he adds.
“No matter who we are or what we do for a living, we must realize that nothing stays the same. The present is different from the past and the future will be different from the present. There have always been huge benefits for being ahead of the curve — and there will always be consequences for being behind.”
