The Ranch Management Professional™

The Ranch Management Professional™

Managing the Ranch as a Business with Restoration Grazing™

The Myth that is Conventional Range Management

by Dr. Jimmy T. (Gunny) LaBaume (Extracted from Chapter 3 of A Handbook for Ranch Managers by Jimmy T. LaBaume.)

 

Range managers like to trace the origin of their “profession” to the Taylor Grazing Act and the birth of the old “Grazing Service” which was the precursor of the modern day Bureau of Land Management (BLM). In other words, by their own admission, the so-called “science” of Range Management was a creation of the Federal Government. 

 

However, the actual birth of the “discipline” preceded the Taylor Grazing Act by several years—shortly after Teddy Roosevelt managed to ram his “Forest Preservation Act of 1899” through congress. In other words, the “discipline” was born by politics and created for the primary purpose of driving the grazer out of the forests.  

 

And things have changed very little to this day. Politicians continue to exert their control over the “science” through an army of federal and surrogate federal (state) bureaucrats. This is evident in the extent to which it controls and dictates university curriculum through hiring requirements.

 

Myth: The basis for conventional range management   

 

The field of range management is riff with myths, half-truths and even outright errors. I can’t help but laugh when I hear a conventionally indoctrinated range manager refer to what they do as “science.” No “science” can ever be underpinned by basic premises that are little more than myth.   

 

The following is a brief overview of some of these myths and half-truths. The initial part of the handbook presents the conventional “party line” of the range management “profession” which you need to know and understand before you can possibly understand the fallacies and weaknesses. Then, in the final chapter in this part, we will treat these fallacies and weaknesses in more detail. For now, the following are a few of the things you should keep in mind while progressing through the book.

 

The most fundamental of all is the myth that “overgrazing” is a function of livestock numbers. It is NOT. It is a function of time—how long the grazing animals remain on a particular area.

 

Closely behind is the old “rule of thumb” for grazing utilization—take half and leave half. This is pure malarkey for several reasons. First of all, it does a perennial grass plant no harm to defoliate it completely if it is dormant. Only if it is green and growing is grazing harmful. So, once again, the problem is solved by controlling time. Oh but we need it for “ground cover” to prevent “soil erosion” they wail. No we don’t. Approximately 85% of the forage ingested by a grazing animal is deposited right back on the soil in the form of dung or urine. Cow paddies provide ground cover. Furthermore, if the crust of the soil is broken and those paddies are trampled and churned into the soil along with plant seed, erosion would be a moot negligible.

 

And then, of course, is the concept of range condition class. The process of classifying rangeland as being in excellent, good, fair or poor condition is founded upon the assumption of some sort of mythical “climax” plant community—the range as it existed before the white man came and ruined it all.

 

First question: Good? Good for what? Giraffes? What is “good” for cattle may be “poor” for deer. All that is absolutely necessary on the range is the stabilization of the top two centimeters of the soil. All things beyond that are nothing more than rational management choices. 

 

The second question: Who can honestly say that they know what a pre-white man climax plant community actually looks like? Although the language has changed a bit in the past 20 years, this same tired old BS is now cloaked as the “Ecological Range Site.” However, it is noteworthy that I did actually hear the word “desertification” (a tired old 70s era term) used in one of the presentations at the last Society for Range Management meeting I suffered through.

 

The idea of “take half and leave half” as applied to certain “key species.” The term “key species” is defined below. For now, suffice it to say that a key species is one that is usually managed “for” – either for eradication or for proliferation. Used properly, this can be a useful concept. However, as you progress through this handbook, you will gain the understanding that the optimum way to manage rangeland ecosystems is to manage for the health of the system as a whole. If you manage “for” a particular species, you are doomed to lose that species. 

 

Then there is the idea that livestock select by species. What a ridiculous statement! To my knowledge, no one has ever heard a cow say, that’s gramma grass. I hear it is good. I think I’ll take a bite. Balderdash! Livestock select for palatability which is, not coincidentally, correlated with moisture content which is, in turn not coincidentally, correlated with protein content—according to the wisdom of nature. 

 

Overgrazing causes brush infestation? Not hardly. In fact, it is UNDER-grazing (often found side by side with over-grazing) that causes brush infestation.  Conventional range management recognizes what they call a “wolf plant” as an individual plant of a species that is normally utilized by livestock but is perpetually passed over and left un-grazed. These plants accumulate material from previous years’ growth that block sunlight from the growth points at the base of the plant causing the plant to become ever increasingly senescent until it eventually dies. It also provides the ideal habitat for seed germination and establishment of the so-called “troublesome” species. I took over 3,000 data points in a study I conducted on a wide variety of different range sites in Trans-Pecos Texas. Over 85% of young plants of the “troublesome” species were within the influence of one of these old, senescent perennial grass plants.

 

Finally there is the idea that high individual animal performance (productivity as measured in such attributes as calf-crop and weaning weights) should always be top priority. As you will see in the chapter on range use economics, this is not true. If you have a 100% calf crop and they all weigh 500 lbs, you will not be able to make the mortgage payment if you only have one. A much more important measure is “turnoff” or how much product actually comes off of the land.

 

Of course the purpose for all of these myths is to support the ever present underlying assumption that it is man and his grazing animals that are primarily responsible for the “destruction” and “degradation” of the world’s rangeland resources. The fact that this paradigm (and the myths that support it) continue to persist really became obvious to me at the annual meeting of the Texas Section of the Society for Range Management held in Odessa, TX on 13, 14 and 15 October 2010. I will write about that in a later post.

 

Efficient or Effective?

by Dave Pratt

 

Effectiveness trumps efficiency. It isn't important to do something efficiently if you shouldn't be doing that thing. Agriculture is replete with examples.

 

Reproductive Efficiency

 

In between EL meetings this summer I spent an evening with Bill, a former Executive Link member. He told me his shift from February to June calving drastically reduced his costs to $60 per cow. He's reduced his substitute feeding to only the most severe weather and some years doesn't feed any hay at all. He provides only a mineral and a degradable protein seasonally so cows could graze stockpile grass. He weaned an 85% calf crop, and made a healthy profit doing it.

 

Bill's neighbor, who was not an alumnus but had been on our mailing list for years, invited us over for a beer, and started asking questions. When Bill said he weaned an 85% calf crop, the neighbor scoffed and bragged that his weaning rate is usually 95%. His cows calve in March. Not surprisingly, he feeds a lot of supplement and substitute feed. After a little napkin math I showed him that his feed costs were nearly $500/cow, $440, higher than Bill's. That's $440/cow to wean 10 more calves per 100 cows or $4,400 for each of those extra 10 calves.

 

Big Calves

 

But I wean much bigger calves than Bill, he argued. At 600 pounds, his calves were about 150 pounds heavier at weaning than Bills. For every 100 cows, he weaned 18,750 more pounds than Bill (85 calves x 150 extra pounds + 10 calves x 600 pounds = 18,750 pounds). With a little more napkin math I showed him that his cost of gain for those additional pounds was $2.34/pound. To rub salt in the wound I added, Of course Bill's lighter calves are probably worth about 10¢/pound more than your heavier calves.

 

As a group, North American ranchers are the most productive in the world. We wean bigger calves or more calves per cow than anyone else, anywhere else. We are hitting the bull's eye, but we are aiming at the wrong target. We've been focused for so long on increasing productivity that sometimes we don't realize that less can be more--less productivity can mean more profit.

 

The productivity paradigm is deeply ingrained. I recently asked a workshop audience if I showed you how to lower costs by $250 per cow, but you'd be weaning smaller calves and your income would drop by $50 per cow, would you be interested? One participant, speaking for several I fear, emphatically said, No! When I asked why he'd forgo the $200/cow improvement to the bottom line, he said, I wouldn't be as productive. His bottom line isn't profitability, it's productivity.

 

To Fertilize or Not To Fertilize

 

Tom McGrady is a good friend and a former Executive Link member. Tom lives in Montgomery, Texas and on a recent visit he told me a great Efficiency vs. Effectiveness story. You can hear Tom's story here Tom's Story.

 

I enjoy hearing Efficiency vs. Effectiveness stories like these. If you have an experience you'd like to share please post it to the blog.

 

Permalink: blog.ranchmanagement.com/2012/12/11/efficient-or-effective.aspx

 

Bud Williams Made Things Better For Animals and People

Bud Williams Made Things Better For Animals and People

 

by Dave Pratt

 

Bud Williams, known world-wide as the authority on low-stress livestock handling, died Monday, November 26, from pancreatic cancer. There is a brief message on Bud's Stockmanship website (www.stockmanship.com) that reads, Thanks to all of you for helping us make things better for the animals.

 

 

There's no doubt that Bud's concepts and methods made things better for the animals, but they also made things better for the people working those animals. He taught hundreds how to settle livestock after shipping. He explained to his students how they could apply cell grazing without fences by placing livestock in pastures. He taught how to move herds faster and more calmly without an army of people. He developed and taught practices for working animals in corrals that didn't rely on yelling, chasing or hot shots. He developed innovative facility designs like the Bud Box.

 

These are so well accepted now (even if they aren't always well practiced) that it is easy to forget how controversial they were just 20 years ago.

 

I first heard about Bud from Stan Parsons at a Ranching For Profit school in 1988. Stan showed the class some amazing video of Bud walking a cow away from her calf and single-handedly loading a cattle truck using a Bud Box. I'd never seen cattle flow that quickly, effortlessly, and silently. He showed scenes of Bud working elk in corrals and it ended with a remarkable demonstration of walking a massive herd of reindeer into a ramshackle set of corrals. Stan concluded the presentation by saying that Bud's techniques could reduce stress on animals and people, improve livestock performance, reduce costs and increase profit. Stan said that what Bud was teaching would be a breakthrough for any rancher open to learning these principles and techniques.

 

Not everyone was open to learning. The difficulty in learning something new often lies, not in understanding the new idea, but in letting go of the old one it may replace. Bud was an effective teacher, but our paradigms about the way we handle livestock are tightly held and difficult to suspend. I saw that first hand when I attended my first Bud Williams Stockmanship school a few years later. The concepts and techniques he presented seemed so simple and obvious, but went against just about everything I'd ever been taught about moving animals. Everyone I'd ever worked with used fear and force to make animals go here or there. Bud used positioning and motion, sometimes very subtle motion, to let the animals do what he wanted them to do.

 

Bud's contributions to ranching and ranchers went well beyond the pasture. His unique take on marketing focused on the three things we have in our inventory: money, grass and livestock. Bud said that you'd never go broke having too much money or too much grass, but you sure could have too many animals at the wrong time. He observed that most ranchers love their cows and hate their grass and said that it ought to be the other way around. He argued that you can't buy undervalued animals if you don't have grass to put them on and, since our cows eat up that grass, we ought to care about our grass at least as much as we care about our critters.

 

Conventional wisdom has been that you make a profit when you sell something. Bud disagreed and taught that you make the profit only after you replace the inventory that you sold. He'd challenge his students that, every day whether we realize it or not, we either buy or sell every animal we have. If we choose not to sell an animal at the market price today, then we ought to be willing to buy her (and another one just like her) at that price today.

 

Bud and his wife Eunice, married for 60 years, made an amazing team. Bud could not have had the impact that he had without Eunice's tireless support. When I first attended Bud's stockmanship school, Eunice ran the projector. She added her own valuable insights to the class to reinforce the concepts Bud was teaching us.

 

Bud and Eunice were especially committed to the next generation of ranchers. While they'd always go the extra mile (or more) for people serious about applying their concepts, they'd go even further for young people who were just starting out.

 

Several Ranching For Profit Alumni transformed their businesses using Bud's marketing and stockmanship principles. It's hard to think of anyone who's touched as many people (and animals) as powerfully and positively as Bud. While his influence survives in capable hands, he will be missed. Nearly everyone I meet who worked with Bud has a story to tell about the experience.

 

Buds Influence Lives On

 

Fortunately Buds influence will live on through the people hes influenced. Buds daughter Tina and her husband Richard McConnel offer courses on stockmanship and low stress livestock handling. To learn more click here.

 

Steve Cotes book Stockmanship: A Powerful Tool For Grazing Lands Management, which Bud reviewed and approved, does as good a job as a book can do describing Buds principles and techniques. Click here to download the book.

 

University of California, Livestock & Range Advisor, Roger Ingram, spent a sabbatical working with Bud to better understand his stockmanship principles. Roger wrote Low Stress Livestock Handling on Pasture and Range which does a great job of summarizing many of Buds stockmanship principles. Click here to access Rogers paper.

 

Permalink: blog.ranchmanagement.com/2012/11/27/bud-williams-made-things-better-for-animals-and-people.aspx

 

The Case Against Genetics

"But our choice of enterprises and the way we structure those enterprises ...trump the economic impact of genetics. It doesn't matter what breed of cow you have or how good a bull you use if you ought not have cows!"

 

I once asked Stan Parsons a related question. Say I only have a limited amount of capital--enough to buy a little better genetics but not enough for a large capital expenditure--would it be logical to purchase semen, for example. His response: "Shoot the salesman when he comes down the road."

 

Jimmy T. LaBaume, CEO

Land & Livestock International, Inc.

The Case Against Genetics

by Dave Pratt

Moments ago I read the following in a popular industry magazine: “…given the multiple challenges you face that are beyond your control drought, rising feed and fuel costs, escalating land values genetic selection may be the single most important component of your operation that you control.” If anyone out there believes that please explain it to me because I think genetics is WAY down the list of critical factors on which we as business owners need to focus. This really isn't a case against genetics. It is an argument for other things first.

 

What comes first? If you own a ranch and profit is one of your goals, start with the land, not the animals. Ranch land is worth a lot of money these days, but only a fraction of its value is tied to its potential for agricultural production. Capitalizing or concessionizing ranch resources may make a six or even seven figure difference to our bottom line. It's unlikely you'll get that kind of return from evaluating EPD’s.


Next? Some places are better suited to growing stock than breeding stock. Cow-calf enterprises on irrigated pasture usually aren't as profitable as stocker or heifer development enterprises can be on that same forage. It'd be a good idea to make sure we have the right enterprise mix before we get too worried about the genetic make-up of the animals in that enterprise.


And there's more. Assuming a cow/calf enterprise is a good fit to our resource, let's determine how it fits. We'd be well served to make sure our production schedule matches the forage cycle. In the Great Plains winter calving (February-April) might produce a big calf but usually requires winter feeding and all of the overhead costs that go along with that. Spring calving (May-June) may mean smaller calves, but often means less cost. The type of animal ideally suited to winter calving is unlikely to be the same that is ideally suited for a low-cost summer program. Before we worry about breed and body type and start picking bulls and replacement heifers, wouldn't it be best to know which production strategy produces the highest margin, the lowest overheads and provides the most protection from risk (severe winters, drought, etc.).


Since I brought it up, what about those heifers? The decision to buy them or raise them ourselves can have as much or more impact on our profitability than the type of heifer we choose. Furthermore, who ever said that replacements had to be heifers? Some of your neighbors, particularly those with herds calving later than yours, might be well advised to buy your open and late calving cows as their replacements. That avoids the cost and stress of calving out first calf heifers and the difficulty of getting them pregnant for the second time. These are just some of the questions that often trump the economic impact of genetics.


This is not to say that genetics isn't important. I'd be naive if I didn't recognize the value of having animals selected for and adapted to the environment and production schedule. But the article is wrong in suggesting that it is the “single most important” thing that you control.


Perhaps the thing that really set me off as I read the article is the way it portrayed us as victims. It implied that we are victims of drought, rising feed and fuel costs and other externalities. I don't mean to diminish the challenges we face when input costs rise faster than cattle prices or the economic and emotional toll we pay in drought; but the fact is that some of us weather the storm (or lack thereof) better than others. It's true that none of us individually dictates the cost of feed or fuel, or can make it rain. But our choice of enterprises and the way we structure those enterprises has everything to do with our exposure to the risk of drought, our need for feed and fuel and just about any other external factor you can name. Those decisions trump the economic impact of genetics. It doesn't matter what breed of cow you have or how good a bull you use if you ought not have cows!

 

 

Permalink: blog.ranchmanagement.com/2012/11/13/the-case-against-genetics.aspx

Rich Dad, Bankrupt Dad

This article is reminiscent of Stan Parsons who had (and still has) a great perspective on “capitalization” of the ranch. I recall some of his wisdom:

 

  1. Over-capitalization has a way of sneaking up on the ranch, one pick-up at a time.
  2. You don’t need all that fancy equipment. All you need is a Tyotoa pick-up and three hammers. That way, when times get hard, you can sell a hammer.
  3. Forget all those chemical and mechanical range improvements and improved animal genetics. The ranch improvement that will return the highest rate is fencing because it is fencing that gives you control over time.

 

(Author’s Note: Contrary to what conventional range managers might try to sell you, overgrazing is not a function of animal numbers. It is a function of time.)

 

Jimmy T. LaBaume, President & CEO

Land & Livestock International, Inc.

 

Rich Dad, Bankrupt Dad

 

By Dave Pratt

 

Earlier this month, Robert Kiyosaki, author of the best-selling financial advice book, Rich Dad, Poor Dad, filed for bankruptcy for one of his companies, Rich Global, LLC. Don’t worry about Kiyosaki.  He’s not about to become Poor Dad. It sounds like the bankruptcy laws protect his personal fortune (estimated at $80 million) and short his creditors by over $20 million. 

 

That doesn’t seem fair to me, but regardless of your views about the ethics of Kiyosaki’s bankruptcy, there are valuable lessons to be learned in Rich Dad, Poor Dad and I hope that the important message in Rich Dad, Poor Dad isn’t lost because of the messengers’ issues.

 

The most valuable lesson in Rich Dad, Poor Dad involves a unique definition of assets and liabilities.  Kiyosaki says that this is rule number one and that,  “If you want to be rich, this is all you need to know.”  What’s the rule?  In Kiyosaki’s words, it is simply this: “An asset is something that puts money in my pocket. A liability is something that takes money out of my pocket.” In Rich Dad, Poor Dad he writes, “Rich people acquire assets.  The poor and middle class acquire liabilities, but think they are assets.”

 

Of course Kiyosaki’s definitions run contrary to the way most of us normally think about assets and liabilities.  Economists, bankers, accountants and our balance sheets tell us that assets are things that we own and liabilities are things we owe.  That isn’t wrong, but it doesn’t explain why most ranchers are wealthy on the balance sheet and broke at the bank.  Kiyosaki’s definition does.

 

The assets on our balance sheet include things like vehicles, machinery, land and infrastructure.  But using the Rich Dad, Poor Dad definition these things are usually liabilities.  Ask yourself, Do these things put money in, or take money out, of my pocket? 

 

Repairs and maintenance, fuel, insurance, interest payments, taxes, these things take money out of your pocket, and unless you are in the car, equipment or land rental business, they don’t put money in your pockets. 

 

Kiyosaki would call these, and most of the other fixed assets we own, liabilities.  Owning these liabilities is a huge constraint to creating wealth because when most of your money is tied up in things that cost you money, you don’t have much left to invest in things that actually produce income.  This is the biggest financial problem in agriculture.  To view a four minute video with a more thorough explanation of this issue and a brief discussion of things you can do about it, click here.

 

In Rich Dad, Poor Dad, Kiyosaki explains that, “The rich can hide their wealth to protect their assets from creditors.”  That’s exactly what he’s been able to do. Whether or not that’s fair is a good question.  I sure wouldn’t think so if I was one of the creditors. 

 

Either way, it doesn’t diminish the valuable perspective on assets and liabilities offered in Rich Dad, Poor Dad.

 

Permalink: blog.ranchmanagement.com/2012/10/23/rich-dad-bankrupt-dad.aspx

  

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