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Cattle producer has suggestions for profitabilityBy Jennifer Bremer Sustainability is important to farmers, but how to get to that point while still staying productive is the challenge. "We may be more productive now than we have ever been, but it's not always showing up on our bottom line," said Colorado cattle producer Kit Pharo. "Sustainable agriculture needs to be profitable and enjoyable for producers." Pharo told a group of producers at a grazing conference held at Dordt College in Sioux Center, Iowa, that the most important thing for cattle producers to do is adapt to change. "People who make a profit are the ones who are constantly adapting to change when the industry changes, such as grain and fuel prices," he said. Profitable ranchers Pharo said profitable ranchers expect to make a profit. They treat their operation like a business and manage it accordingly. "We all need to be better at managing our operations and not be afraid to make the necessary changes to keep the ranch profitable," he said. Pharo describes profitable ranchers as proactive, not reactive. They look at what they need to do before there is a problem and if they have a problem they find a way to correct it immediately. Since prices can be a major controlling factor in farming and ranching and the commodity business by definition is a break even business, Pharo said producers need to be more on top of their expenses. To increase profit potential, Pharo suggested that producers get out of the commodity business and sell their product instead and do a better job of marketing their animals and products. To increase production and/or reduce expenses, he said it is important to be better than average in one or both areas. "Most farmers and ranchers are production driven, but they need to become profit driven," he said. "Many production driven decisions will reduce profit or vice versa. Production and profit are not the same thing. Production-driven produces bragging rights and profit-driven produces more profit." He stressed that cost of production is most important and, as long as producers are making a profit, it doesn't matter how big the weaning weights are. Pharo isn't concerned with weaning weights on his farm as long as he is profitable. He said a 500,000-pound load of 400-pound calves is worth more than a 500,000-pound load of 600-pound calves. He wants producers to look at the long-term picture and the need for smaller cows to wean smaller calves on the same inputs. "We are using free solar energy and free rainfall to produce beef, so we need to be sure we are doing the best job of using those resources," he said. "We need to make the most efficient use of our available resources." Keys to profitability Three keys Pharo uses to be profitable are: rotational grazing, matching the production cycle to the forage resources and matching cow size and type to the forage resources. Rotational grazing allows grass to rest and grow during the growing season. Cattle can be moved more often when grass is growing faster and less often when grass is growing slowly. Pharo uses the theory of putting the highest number of cattle in the smallest possible area for the shortest period of time, which will allow maximum profit in the end. Rotational grazing allows an increase in grass production by providing the rest and growth periods; and an increased amount of grass can be stockpiled for winter grazing. It also allows for an increase in herd size and total beef production per acre, while also improving the land. "If you manage the land, you have control of what is happening on the land and you can get the most out of it," he said. Matching the production cycle to available forage resources allows producers to push the calving time back to May and match up the need for grass to higher grass production. He said if producers go against what nature would normally do, it will cost them more, especially in feed costs. According to Pharo, feed expenses can be reduced by as much as 70 percent by moving the calving season from March to May. While weaning weights may be smaller when calving later, he said the total pounds end up to be higher since the death loss is considerably smaller. He also sees fewer calving problems and abnormal presentation at birth when moving the calving season to be more in synch with nature. Pharo said his selection for milk production has changed as well. In order for a cow to have longevity at his Colorado ranch, she needs to have a small and productive udder. Since cows are calving during peak grass growth, they continue to be good milk producers. By looking at the big picture, Pharo said he has been able to move more toward a profitable operation than one that is completely production oriented. Jennifer Bremer can be reached by phone at 515-833-2120 or by e-mail at jbremermaj@hotmail.com. 5/5/08 Date: 5/1/08
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