Considering grazing management is an asset for producers
Deadwood, S.D. – “An asset is something that puts money in our pockets, and a liability is something that takes money out of our pockets,” stated the University of Wyoming Extension Educator Dallas Mount.
He noted that using this definition, from Robert Kiyosaki, producers might not always know what their assets and liabilities are.
During the Joint Wyoming-South Dakota Farm Bureau Young Farmers and Ranchers Conference in Deadwood, S.D. on Jan. 17, Mount looked at improving grazing.
Mount continued, asking, “What business is the ranch involved in? What are its enterprises?”
An example ranch may have a hay business, a cow/calf herd and a land business. Each of these sectors generates different levels of income for the operation.
On the example ranch, Mount explained, “They are buying and developing heifers and turning around and selling them. They are profitable and therefore an asset.”
He outlined the various enterprises of the sample ranch, noting that not all of them make for positive returns.
“We are looking at this from an ag value analysis,” he said.
Determining which areas of the operation are losing money will help determine steps for making a more lucrative business.
“The grass and the land business might be the biggest assets on the ranch,” he stated. “It might be the thing that is putting money in our pockets.”
A look inside
Mount reviewed in-depth analyses of 20 to 30 ranches a year, looking at the various components of the business.
“For most of these ranchers, the land business is continually the greatest asset of those enterprises that they are going to need,” he explained.
That is why he believes it is very important to discuss grazing management.
“The least management-intensive grazing program would be continuous grazing,” he said.
Various kinds of rotational grazing involve a bit more management, and management-intensive grazing (MIG) can involve moving cows every day.
“We can find something that meets a medium,” Mount said of management intensity.
“Combining herds, for most people, is the greatest leverage they have to impact a grazing program, before they build one stinking piece of fence,” he added.
Although he recognized there are production implications to combining herds, he believes it can provide advantages to managing grass.
“Maybe some of our pastures would get more rest if we had one herd instead of two,” Mount suggested.
There are three things Mount proposed that can be managed in grazing – rest period, graze period and stock density.
“Rest period is how much rest we are giving the plants,” he said.
One advantage to including appropriate rest periods is the ability to affect species composition.
“If we don’t ever give those plants that we want a time to rest, they are going to disappear, and then we are going to have weeds,” he said.
Leaving a pasture empty in the wintertime does not count as a rest period.
“We really need to have growing season rest, and the best time of rest is that rapid growth period. There is a season on our ranch where most growth occurs,” he explained.
He noted that grazing during that high growth period has the most detrimental effect on grass production.
Graze period, he continues, is the amount of time that animals are in an area.
“We can overgraze a pasture even if it’s very lightly stocked,” he said.
For example, placing five horses in a section of pasture will lead to grazed patches.
“Those horses are going to overgraze it in spots and under-graze it in other spots,” he noted.
He then explained that there are two ways to overgraze. One is to stay too long, and the other is to return too soon.
“It really has to do with utilization,” he added.
Stock density is another tool to manage utilization.
“Stock density is how many animals we have in a particular spot at this instant,” he stated.
For example, consider how a pasture is grazed in relation to the water tank. The grasses closest to the water, where the stock density is highest, will be heavily grazed, while the borders further from the tank will have very little grazing.
“If we are managing rest periods on the ranch, graze periods so cows aren’t staying too long, and if we can get our stock densities up, the ranch could increase carrying capacity and see improved range conditions at the same time,” Mount explained.
Mount also warned that producers should not be using tools from the 1900s. People tend to use systems that we they know and are comfortable with.
“Most people think four-wire or barbed-wire fence is necessary,” he noted, as an example.
Looking into quality electric fencing and pastures with temporary fencing that can be moved may provide better value. Mount suggested looking into systems with poly-wire that provide full access to water tanks.
“This year has provided an interesting opportunity, maybe, to reinvest some money into the operation,” he stated.
To take advantage of higher profits, it may be a good time to foot the up-front costs for systems and tools that will save money in the future, he said. It could also be an ideal time to evaluate which enterprises can be changed or modified within the operation.
“I think the world has changed in 2014, and we need to be aware of that in how we manage our business, in short-term and long-term strategic planning,” explained Mount.
He noted that it is important to look at the financials over the past number of years. One year of numbers will not represent how the operation runs as a whole.
“When the tax accountant walks in and says we’re going to have to pay a whole bunch of taxes and need to spend this money on the business so we don’t have to give the government a piece of it, what do we do with the money?” Mount asked.
He briefly posed the possibility of paying the taxes and putting the money into the bank as a rainy-day fund, adding it to a retirement fund or buying a new tractor.
“I think that if we change our focus to how we can make grazing, as an asset, even more efficient, that might be the greatest thing that we can do to increase the profitability of our ranch,” he said.
Natasha Wheeler is editor of the Wyoming Livestock Roundup and can be contacted at email@example.com.