Steve Suther: Black Ink 11-12-12
November 12, 2012
Some costs of the drought are easy to calculate. Like the extra hay or supplement you have to buy this year at higher prices. It's those longer-term costs that get a little hard to figure when trying to assign exact values.
I rode shotgun through a lot of drought-stricken pastures this summer and fall, where producers weighed their options. Some folks had a few stores of hay saved up from good years. Some were going to cull a little deeper, while still others were making plans to rent some grass in the few places that were doing all right on moisture.
At every stop, one common theme that showed up again and again was this simple fact: any drought-related decision they made this year would have lasting impacts on their operations.
One particular visit took place on a gloomy day in September. The dark clouds threatened to ruin my photo shoot, but for all the promise, never delivered more than a sprinkle. So the couple I visited with continued to weigh their options, but thinking beyond the fiscal year.
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This Nebraska cattleman watched others swath and bale their poor corn stands, but worried about leaving the ground so "slicked off." He wanted the stubble to catch some winter moisture.
Buying hay is expensive, but what is the cost of letting your soil fly away?
Yet you can't just keep spending, hoping the black on the balance sheet will catch up to that red, so finding cheaper feed has to be part of the equation. That or run fewer critters.
Some suggest this is the year to sell off cows. If the rains come or it's a snowy winter, you can always buy back females later, but that isn't an option for this rancher. "I've got a lot, a lot of years in history and genetics that I'm not going to just haul to the salebarn and get rid of," he said. "I'll figure out some way, I don't care what it is."
It's pretty difficult to put a value on a quarter-century of engineering their ideal herd. How much time have you invested in yours?
You can analyze bull costs, but it's much harder to assess the value of those genetics infused in your herd over the long haul.
This particular producer put emphasis on pretty much everything. He placed pressure on producing good mamas, on efficient growth and final carcass quality. He usually sells calves at weaning, but recognizes that building repeat buyers and a solid reputation for gain and grade were worth the extra effort.
I don't know for sure what this rancher decided on, but one thought had to come up. The perfect cow only exists in theory. Experience and enough information gathered on a herd will always show differences from top to bottom. In other words, the best herd in the country has a bottom quartile.
They are worth more at the salebarn than ever before, and incredibly, taking in that money to feed the rest could pay even more in the long run.
Faced with the challenges of drought, finances, lack of adequate labor or all of those, good records and logic can guide you. It's not time to abandon a life's work or turn the corner toward an ordinary, commodity cowherd.
That old adage comes to mind, "It takes 20 years to build a good reputation and only seconds to destroy it."
You have to do what has to be done, but as you assign costs to each solution, keep in mind that longer-term business plan.
In the cow business, it takes decades to build up your cowherd and perhaps only one "worst drought in 50 years" to destroy it — or make it even better.
Next time in Black Ink Steve Suther will explore alternatives to culling old cows. Questions? Call toll-free at (877) 241-0717 or e-mail MReiman@CertifiedAngusBeef.com. ❖
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