Restocking After the Drought
I know many of you reduced your herd in 2012 and likely did little herd building in 2013. With the wet fall we have had this year and the excellent prices being received now, cash flow and optimism may have put restocking on your mind.
Before you go full speed into rebuilding the cow herd, here are a few strategies I think you should consider.
Variable Forage Supply
Have you ever looked at or thought about what a graph would look like of the variation of forage supply on your ranch from one year to the next? In your mind or on paper, put the last 10 to 20 years across the horizontal axis then chart your forage production per acre or total ranch animal unit months (AUMs) on the vertical axis with the average being somewhere in the middle. There is a lot of variation isn’t there? Likely there are more dry years than wet years.
Looking at this graph consider how much of that forage supply you are willing to devote to your base cowherd. If it is a pretty large amount, then each year there is a forage shortage you will be selling cows or buying hay to make up the gap.
The point of this is that ranching in an environment with highly variable forage supply and stocking the ranch heavily with a cowherd you are reluctant to sell creates a reoccurring problem. We are likely to either leave lots of forage unused in the wet years, or more commonly, we have to destock or buy feed in the dry years.
There is another way.
What if a significant portion of the total ranch forage supply was reserved every year for some type of flex herd? This would be livestock that could be easily added in years of surplus and easily removed in years of deficit.
Ideas would include cow-calf yearling, take-in cattle, holding over open or soft-cull cows, etc. Likely one of these would fit your operation better than others.
The challenge is to consider how much of the annual forage supply you would like to devote to the flex herd.
Economists have researched this idea, and with the danger of over-simplifying their answer, they found that somewhere around 40 percent of your ranch’s forage supply should be devoted to a flex herd to produce consistent and good returns.
So, before you jump off head first into rebuilding the cowherd, have a discussion as a ranch about increasing the proportion of your ranch’s forage supply that is devoted to your flex herd. The next drought may not be far away, and you will be better positioned to respond.