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Colorado rancher: Happy farm is a profitable farm
Ohio Correspondent

REYNOLDSBURG, Ohio — Agriculture must be profitable and enjoyable in order to be sustainable, according to Kit Pharo.

Pharo, a Cheyenne Falls, Colo. cow/calf producer was the keynote speaker at the 2006 Ohio Forage and Grasslands Council annual conference.

Pharo noted the agricultural population is getting older and the next generation is not coming back to the farm or ranch.

“I can’t blame them, they have watched their parents work, but if they don’t enjoy what they are doing, their children aren’t going to come back to the farm,” he said. “It doesn’t have to be that way, we can change that. If we can create a business that is profitable and enjoyable, the next generation is going to be there.”

However, Pharo added he is also concerned about the large number of farms and ranches that are struggling to make a profit during the past three years of relatively high beef prices.

“If they aren’t making money now, they are facing a desperate future,” he said. “It has never been easy to make a profit in the cow/calf business, between 10 and 15 percent of cow/calf producers make a profit every year. Are you prepared for the downside of the cattle business?”

Pharo said profitable cattlemen expect to make money; they manage their farms accordingly.

“Many farms and ranches are so busy with the day-to-day tasks, they don’t have time for management,” he said. “Without management, you spend a good bit of time putting out fires, with management, you have time for things. You need to create a future for your family and your business; it will not happen on its own.”

Pharo said a good manager’s job involves vision; they have a plan of action that tells them how they are going to get where they need to be. They are not afraid to make the changes they need to make to be profitable.

Pharo said one way for producers to increase profitability is to stop producing a commodity and start producing a product to sell to consumers, so they have control over the market and the price.

Another way for producers to increase profitability is to reduce their expenses.

“The first thing that many producers try to do to increase profits is to produce more product,” he said. “When you increase production, your expenses go up as well, it is just as easy to increase profits by reducing your expenses.”

Pharo told producers that they needed to decide if their decisions were based on profit or production.

“Production and profit are not the same thing,” he said. “Production-driven goals produce bragging rights, while profit-driven goals produce more profit. But remember, some production-driven goals will decrease your profits, and some profit decisions will decrease your production.”

He stressed the need for producers to step outside of the box and look at their options. First, producers need to make the most efficient use possible of their available forages on their farm.

“I am not talking about buying more equipment,” he said. “I know that we tell our wives if we have more gadgets we will be more efficient. I mean that we need to know what we have growing on the farm or ranch, make the most out of it without putting much into it.”

The key to this is a properly managed and controlled grazing system. He stressed the need to move cattle quickly when the grass is growing fast and move them more slowly when the grass slows down.

“You can increase grass production by providing more time for rest and growth,” he said. “This can also increase the amount of grass stockpiled for winter grazing. It is not hard to put cows on welfare (feeding them hay and grain) but it is hard to get them off.”

It is important to provide the opportunity for higher producing grasses to be reestablished, as they cannot stand traditional grazing.

Second, producers need to match their production cycle to their forage resources.

“Match what the cow needs to what your ranch can produce,” he said. “It is not nice or profitable to food Mother Nature. You can, but it will require extra money and extra labor.

“Nature has many lessons to teach us, there is a reason why wildlife do not have their babies in February and March. Why not let Mother Nature feed your cows when their nutrient requirements are the highest.”

Producers need to think about what they are doing, according to Pharo, as a lot of profit is being lost because producers are not in sync with nature and if producers are using the right genetics and are in sync with nature, their cows will be able to calve on their own.

“Mother nature will select your best cows for you if you just get out of the way,” he said.

He said that calving cows in May or June does not require much effort, as the weather is better and pastures are lush.

The downside is that they are producing almost too much milk for their calves.

“If you are calving in January or February, you aren’t testing your cow’s udders,” he said.

Finally, they need to match their cow size and type to their forage resources. Not all cows are created equal, according to Pharo, as some are more efficient and profitable than others.

“Bigger cows are going to eat more feed than smaller cows,” he said. “Heavier milking cows require more feed for maintenance even when they are not lactating.”

He said that 65 percent of the cow cost is spent on feed and of that feed 70 percent is consumed for maintenance and only 30 percent is used for production.

“It does not matter how perfect the cow is if you are not managing the forages,” Pharo said. “Very few farms have cows that can survive on what the farm produces. Cows need to live within their means, they must be able to produce with minimum inputs.”

Cattlemen need to produce or purchase animals that fit their environment and management practices and cull or sell any that do not fall into that spectrum.

“Identify the cows that fall into both ends and get rid of those on the low end,” he said. “You will end up with more efficient, profitable cows. If you are going to make genetic improvement, some cows have to fail the test.”

Pharo said that if a farm or ranch can support fewer large cows should be able to support a few more smaller cows. The smaller cows will out-produce the bigger cows, producing more beef worth more money. A cow that is able to put on and maintain their body condition with limited amounts of feed is a cow that is able to support the farm rather than the farm supporting the cow.

“How many days a year are you working for the cows and how many days a year are the cows working for you,” he said. “Learn from your oldest cows, Mother Nature and father time have done the culling for you. The most profit that I can make is when I work with nature.”

This farm news was published in the March 15, 2006 issue of Farm World.