Key to improving bottom line includes reducing costs, increasing revenue

Looking back over the first few years of the new millennium, it seems that the Canadian cattle industry has been hammered by a never ending string of adversity. A combination of the 2002 drought, BSE (mad cow disease) in 2003, high grain prices in 2008 and now country of origin labeling (COOL) in 2009 has hammered prices to historical lows where even the most savvy ranchers are finding trouble making ends meet. While scores of cattlemen are trying to mitigate the challenges by expanding their herds, many of those who are following this strategy are surprised to find that while their workload and risk has increased exponentially, their take-home pay has not.

Although the political and financial landscape has changed dramatically since the turn of the century, there are still just two ways to increase profit; 1) by reducing costs and 2) by increasing revenue. Listed below are five ways that small to medium size cow-calf operations may want to consider to increase their profitability.

1) Late-summer calving

Calving in August is ideal for saving money in so many ways. A quick check of Environment Canada’s historical records will show that in virtually every province, the warmest, driest month of the year is August. That means no hourly checking of the cattle, no frozen ears, no scours.

Since the cows are on pasture it means that they are receiving top quality feed exactly when they need it, during the last trimester of pregnancy and the first three months of lactation. Low priced low quality hay can be fed as a maintenance ration throughout the winter.

Fall calving means that the calves will reach market weight earlier in the year. Since most producers market their calves in October and November and the laws of supply and demand tell us that when cattle numbers are higher, prices will be lower, it just makes sense that by marketing 600 to 800 pound yearlings earlier in the season will yield higher prices.

Last but not least, because most ranchers have calving season somewhere between January and May, their breeding season occurs some time between April to August, leaving lots of bulls eating lots of hay but not doing any productive work in return. Breeding costs can be reduced or eliminated, by renting, sharing or borrowing unemployed bulls from the neighbours.

2) Smaller cows

Since one of the biggest costs in producing a calf is the maintenance of the cow, and because feed consumption is directly proportional to the size of the cow, it just seems reasonable that having smaller cows will reduce the cash outlay for the calf without compromising the price of her 600 to 800 progeny at market time

The second advantage of smaller cows is lower birth weights which can be often related to ease of calving. The easier it is for the calf to drop, the easier it is for the rancher especially he is holding down a second job in town or attending to more profitable business units on his diversified farm.

3) Marketing cattle by products

In some ranching operations, the actual beef is the byproduct while the cattle manure is the merchandise that actually brings home the bacon. Composted manure is becoming an increasingly valuable commodity for urban gardeners that want beautiful and productive landscapes that are environmentally friendly as well.

4) Woodlot materials to build, fences corals and barns

Surprising as it may seem, even the lowly poplar tree can be used in all kinds of construction applications. As an indoor wood, poplar is second to none when used as beams, rafters or strapping. Poplar boards painted with used motor oil not only provide durable fencing material for corrals and fences, but also taste so bad that bored horses will not chew the top plank. When treated with copper sulphate, the poplar posts will last as long as pressure treated posts at a fraction of the cost.

5) Bringing the cattle to the hay

The city of Pittsburgh, Pennsylvania became the steel capital of the United States because it was cheaper to bring the iron ore to the coal, not the other way around. In the ranching business it is far cheaper cattle to where the hay is, not the other way around. That is why there is still reasonable money to be made by intensive grazing in the summer and bale grazing in the winter. In fact the single most expensive part of any haying operation is actually moving the hay from place to place.

Bruno Wiskel not only farms and ranches by the town of Athabasca, Alberta, but is also a professional speaker who delivers the seminars “Diversify or Die” and “The Rural Millionaire, 21Secrets to Marketing Agricultural Products” as well as the Keynote “The Joy of Farming”. All Wiskel’s presentations are based on changes he made on his own farm that raised his agricultural income from $30,000 per year to $30,000 per month. If you have a group who might benefit from Bruno’s experience, strength and hope, check out his websites www.brunowiskel.com,www.theprosperousfarmer.com,www.mrvs.net,or by phoning toll free 1-866-618-7337.

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