Measuring Ranch Profitability For Efficiency and Sustainability

 

With all the posts I’ve done on cow size, I wanted to address the individual performance vs. per acre calculations.

For the past few decades–maybe longer, since the 50s?–individual animal performance has been the basis for how to calculate and determine profit, loss, success, or failure. This resulted in dismal failures! This is not the correct way to measure an operation’s success because it does not take enough factors into account. It’s measuring something that is variable and easily changed, instead of a more constant factor.

This was about the same time larger weaning weights were pushed and became the end all-be all of ranch success. It was the wrong measuring stick! Read more about that on Increases In Cattle Size and How It Affects Cow/Calf Profitability.

There are some that have a different way of calculating and that is by the acre. This is because the number of individual animals on a piece of land can change, but the land stays the same size. An acre is always an acre; a cow is supposed to be calculated as 1000 lb (animal unit) or the equivalent through some formulas.

Because the majority of people have been taught to measure individual animal performance, and look at things from that perspective, I find it easier to start there and then work through it to per acre calculations. People that are used to individual performance seem to more easily understand when led through this order, rather than just jump right to per acre.

The other reason I like to do it that way is that the whole is comprised of parts, individuals. The cow herd is one thing, but it is made up of individuals. Being the data freak I am, I like to know which individual is not pulling her weight–so to speak–and which girls are toting more than their fair share.

As with anything there is going to be a top and there is going to be a bottom. The best herd in the world will have individuals that are at the top and individuals that are at the bottom. To improve the herd, the best will be multiplied and the bottom will be culled out. Then guess what happens, there is still a top and a bottom!

So how do we measure an individual cow’s performance on grass vs. another? It’s harder because they are out in fields, eating grass. There are processes of clipping grass, measuring area, and figuring out how much grass is in a field.

Watching the cows and noting who is out eating more often, while the other cows are laying around, then comparing that to the cows’ condition compared to other cows, and how the cow’s calf is growing in relation to other cows. It’s not an exact science, but it the least expensive and pretty darn accurate.

Miracle with her bull calf, Dust, on April 24, 2014. Dust was 5 weeks 5 days old in the picture.

Miracle with her bull calf, Dust, on April 24, 2014. Dust was 5 weeks 5 days old in the picture.

There will be individuals that are notably in better condition, seem to always just be lounging around–because they don’t have to be out grazing and consuming feed–but are staying fat and their calf grows bigger and bigger. These are the cows that calves should be first selected for replacements. These are going to be the most profitable cows on the operation! They are what you want to multiply!

A popular calculation is acres per cow. That is how many acres it takes to support a cow for a year. It varies dramatically by the area, and even sometimes within a certain area. Especially in our area, where there is irrigated and unirrigated ground. It also varies by the year here, depending on the irrigation and the growth rates of the grass.

This year we are struggling to get water across all our fields, the grass just doesn’t want to grow. I think it is a combination of the soils drying out more over the winter and not quite as much irrigation water as we normally get. We are not the only ones having the problems, after talking to some of the neighboring places.

Back to acres per cow… The ground required, would include all the ground required to supply that cow with food for the year, whether grazed or hayed. For instance, if an acre per cow is required for summer grazing, but 5 acres are hayed to produce feed for that cow for the rest of the year, the total acres would be 6 acres.

The easiest way, obviously, to calculate acres per cow is to take your total acreage, and divide it by the number of cows you run. This is going to tell you what your current efficiency is. This does not tell you what you *could* do, but it is what you are currently doing. It is the baseline.

To increase efficiency, you make changes, then measure again, compare it to the previous year and figure out if you have improved or decreased efficiency.

Getting off topic again. Everything runs together! The point is, individual performance does matter, but the measurement that really matters for profitability and sustainability is the per acre profit. The only way to measure ranch profitability and sustainability is by the acre. The way it is increased is through individual performance, not based on weaning weight, but on the cow’s ability to utilize the feed efficiently.

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