Profitable ranching

Kit Pharo, an eastern Colorado rancher, talks about profitability and sustainability during the Idaho Range Livestock Symposium in Twin Falls on Jan. 7.

TWIN FALLS, Idaho — Kit Pharo has run cattle on eastern Colorado grasslands for the past 35 years with common-sense ideas that go against the grain of traditional ranching.

That’s led to a profitable and sustainable cow-calf operation, cooperative herds in 12 states and a seedstock business that now sells more than 1,000 bulls a year.

Bucking the trend has proved successful for his operation, and he encouraged ranchers at the Idaho Range Livestock Symposium to likewise think outside the box.

The status-quo way of doing things stopped working 30 years ago. But most ranchers are operating the same way their parents and grandparents did, he said.

“Ranchers today are doing good just to break even,” he said.

Weaning weight

Over the past 50 years, producers have bred for bigger weaning weights. That might have given them bragging rights, but that’s about it. Cow size increased, and stocking rates had to decrease, he said.

“The stocking rate affects profitability, or lack thereof, more than anything else,” he said.

The industry has nearly doubled weaning weights over the past 50 years, but cost of production has increased and profits have decreased, he said.

“Why are we focusing on the wrong thing, and why did we do it for so long?” he asked.

The industry is now at a tipping point. Producers have to change or they’ll go out of business, and those slowest to change are going to get run over. Those who can’t cut or eliminate expenses might as well cut their losses, he said.

Pounds per acre

“Production is a great way to increase profits but only if you increase production per acre — not per cow,” he said.

Johann Zietsman (a legendary cattle rancher in South Africa) once said if corn growers thought like beef producers, they’d space their plants far apart and focus on maximizing the number of ears on the plant and the number of kernels on the cob — ignoring production per acre, he said.

The beef industry should have been focused on doubling the pounds of beef per acre instead of doubling weaning weights. Ranchers have been successful in increasing overall beef production but they don’t have enough income to cover costs, he said.

“The first step to double profits is to start focusing on pounds per acre and stop focusing on pounds per cow,” he said.

Stocking rates

That gets back to stocking rates. Big cows eat substantially more than smaller cows and wean at a lower percentage of their own weight. So using smaller cows at a higher stocking rate produces more total pounds per acre and more total profit than larger cows, he said.

For example, the same available forage resource would accommodate 100 cows weighing 1,000 pounds or 71 cows weighing 1,400 pounds. The smaller cows can wean half their weight (500 pounds), producing 50,000 pounds. The larger cows need more forage for their own maintenance and wean a smaller percentage of their own weight (about 600 pounds), putting their total production at 42,600 pounds.

Not only does the rancher have more pounds to sell, but the lighter weight calves typically bring a higher price per hundredweight, he said.

Using big, high-maintenance cows has forced ranchers to destock and increase supplemental feeding. With land and feed costs as high as they are, ranching has become less and less profitable, he said.

But ranchers can double their profits, he said.

“To do it, we’ve got to stop doing what we’ve always done,” he said.

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