the same soil. When that same range degrades from fair condition to poor condition, the production decreases to 25 percent (or less) on the same soil, he says. This differential between range condition classes is even more pronounced in drought years. The same can be said about the mismanagement
of bermudagrass and other introduced pastures, he says. Failure to apply proper fertilizer to bermudagrass pastures results in lower production, eventual stand decline and, ultimately, in reduced carrying capac- ity. For optimal production, introduced pastures like bermudagrass require regular fertility management. If fertilizer is not applied, the stocking rate should be reduced accordingly. Ideally, stocking rate decisions should be made and
adjusted seasonally to balance forage demand with forage supply, he says. “Unfortunately, fi nancial obligations often force
producers to maintain a stocking rate that is too high for their available forage supply,” Ellis says. Drought and low market prices often prompt produc-
ers to hang on to their livestock in hopes of squeezing out more profi t when, in fact, it can cause long-term damage to rangeland and at least short-term damage to introduced pastures, he says. “The optimal stocking rate required to maximize
production per unit of land varies with the quantity and quality of forage produced,” Ellis says. “This variation is refl ected in the ranch’s profi ts, because with high stocking rates production costs generally increase at a faster rate than do gross returns.” Eventually the point of diminishing returns is
reached. “Some producers have been unknowingly operat-
ing on the wrong side of that point for a long time,” he says. As profi t levels decline, there is a greater chance that the ranch will suffer catastrophic loss. Again, producers have been conditioned to think
in terms of inventory instead of margins. “Producers associate the number of head with gross
revenues but fail to associate it with gross margins,” Ellis says. “Gross margin per unit of land is a better metric to use.” To the surprise of many, the fi rst step to improving
gross margins is reducing stocking rates because of the associated reductions in production costs, he says. “Stocking rates should be set based on forage pro-
duction, hedging on the conservative side,” Ellis says. “Texas will probably endure more dry spells than wet spells over the next few years, so producers can’t base
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March 2015 The Cattleman 61
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