interested in getting any bigger. That leads to the question of how this ranch will be able to adjust to what the economist calls “the slow, gradual march of increasing expenses.” If the ranch is already at its maximum stocking rate, how can it continue to improve its performance as its expenses continue to creep higher? As Bevers puts it, the answer is “I better have
some years in here where I have some exceptional (calf) prices.” He brands as inaccurate the claims that it costs
$400 to $500 to run a cow. His model ranch’s costs exceed $700, including all expenses and deprecia- tion. “Even in 2014, when they were really making a lot of money — you would have to call that an exceptional year — they only got 8 percent re- turn on their investment,” he says. “This is as good as it’s going to get, so what can I continue to do to make this ranch better?” This was the ranch achiev-
Can female reproductive rates be better? One way to generate the most out of each acre is
to check your female reproductive rates and look for ways to increase them. “If I’m going to spend dollars, I am going to spend them on trying to get one more cow bred,” Bevers says. “It’s not so much about the weaning weights. You have to have a calf before you can worry about what it weighs, and if you don’t get the cow bred, you don’t have a calf.” Second, he told the group at Wichita Falls, produc-
You have to have a calf before
you can worry about what it weighs, and if
ing near optimal performance according to Bevers’ records. Two others, one on the eastern side of the Great Plains and one on the western side, felt the full brunt of the 2010 to 2014 drought. “In both cases,” he says, “they are not yet back to where they were in 2009 before all this happened.” This means that unlike the ranch doing the best, they were still down on their cattle numbers and were unable to take advantage of the record high prices, while still saddled with fi xed costs, land ownership costs and machinery costs. The long-term stocking rate, says Bevers, is thought
to be primarily dependent upon rainfall where the ranch is located. In the Vernon area, rainfall aver- ages 23 inches a year. He says that means he ought to be running one female per 25 to 30 acres. Those fi xed costs, Bevers says, are a huge part of the stock- ing rates equation. “It doesn’t make any difference whether I have
one cow or 1,000 cows,” he says, “this is what it takes just to keep this land together and operating, in some form or fashion.”
66 The Cattleman January 2016
you don’t get the cow bred, you
don’t have a calf.
ers should try to minimize their fi xed costs, which represent about 55 percent of what it costs to run a cow. Bevers says cost-conscious ranchers often key in on variable costs like feed and veterinary supplies, but those expenses really don’t change very much. “It’s the fi xed cost of the
operation that is the real is- sue,” he says, “and how do you minimize that? In some respects, you just quit buy- ing stuff. None of us likes to use old trailers — it’s danger- ous if the fl oor is bad — but sometimes we have to. I try to minimize what my investment dollars are in the operation of that ranch, in terms of the fi xed cost.” Third, while ranchers can-
not control the average price of calves, what they can infl uence is whether their own returns are above or below that average. They can try to keep their receipts above the average by running their calves through programs like VAC [value-added calf precondition- ing programs], or by backgrounding. “Whatever I can do to make sure I stay above the average for the year, or 2 years or 6 months, I need to do that,” he says. “It all starts with having good inventory and fi nancial records, and being able to do an analysis on the ranch.” There are still some pricing opportunities for cow-
calf operators, like forward contracting, and there are new insurance policies that can reimburse the rancher for forage lost to weather. Bevers says he has used those himself, but the jury is still out on them. “I think there are things out there from a forage
insurance standpoint that at least merit looking at,” he says. “This was a decent year for rain, so I didn’t
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