Manitoba nominees focus on enterprise economics

For Tyler and Dorelle Fulton, knowing what parts of their business make a profit is the key to success

Tyler and Dorelle Fulton say it’s a sharp pencil that help keeps their southwest Manitoba cow-calf beef operation in the profit picture.

They’ve separated the farm business — managed in a joint venture with Tyler’s parents — into four different enterprises. They monitor the profit potential of each enterprise throughout the year and adjust management as needed.

“We analyze each enterprise to ask ‘is it or is it not making money, or could it be managed better and what do we have to do to change that?’” says Tyler. “Our focus has been on optimization our resources and our profits.”

Fulton cited a recent example where market research in 2012 showed the value of hay was skyrocketing in drought stricken parts of the U.S. He decided to pull yearlings off his alfalfa and grass-blend forage pastures on their Birtle, Manitoba farm. He sold the 850-pound yearlings, and later harvested a cut of high quality alfalfa hay he was able to market into the U.S. While cattle prices are improving, the hay netted a higher return than the extra pounds of beef.

New Zealand inspired

The Fultons, who returned to active farming in 2006, were the winners of the 2013 Manitoba regional Outstanding Young Farmer’s competition. Actually it was just Tyler who was returning to the family farm. Dorelle is a Winnipeg-raised accountant — a city girl — who on a trip with Tyler to New Zealand agreed that farming might be an option.

Although Tyler was born and raised on the farm, after graduating from the University of Manitoba with an ag business degree he worked for about 10 years as risk management specialist for Manitoba Pork and most recently [email protected] Marketing Services (the name is a stylized version of “hams”). After he and Dorelle married they took a holiday to New Zealand.

“We had some connections there and met some farmers and we were so blown away by their business spirit that we were both inspired,” says Tyler. “We came home from that trip with the motivation to come back to the farm at Birtle, join my parents, and see what we could accomplish.”

Today the Fultons produce hay and pasture on about 4,400 acres, run a 450 head cow-calf herd, and also a backgrounding operation. The four business enterprises include the land, cattle, hay sales and pasture — each of those has a ledger account. With Dorelle’s training as an accountant they can track the profit and loss potential of each enterprise.

“Our objective is to allocate resources to the enterprise that will produce the highest profit,” says Tyler.

Their basic business plan is to obviously, first calve out the cow herd, wean the calves in the fall and typically background them over winter, and then put them out on pasture the following year. Those yearlings could be marketed as 950 lb. feeders ready for a finishing feedlot.

“Depending on the year and market conditions we really have three different options,” says Fulton. “We can market the calves right after weaning, we can market them as light feeders in March, or as heavy feeders in August or September.” The majority of their feeder cattle are marketed into the branded Spring Creek natural beef program, based in Alberta.

Along with producing pasture and winter feed for their own cattle, the Fultons have also developed a strong local and export hay market over the years. Producing mid-size square bales averaging 750 to 800 pounds, they have developed a market for high quality hay for all classes of livestock ranging from horses to alpacas, with their largest export market being quality alfalfa hay sold into the Wisconsin dairy market.

A real game changer

One of the biggest changes in recent years which had a positive effect on all enterprises involved switching to corn for winter grazing for the cowherd. Before corn the cattle overwintered through bale grazing. The herd later this fall will be heading into the third season of 120 acres of grazing corn, which will provide 90 to 100 days of winter feed.

“Switching to grazing corn has really been a game changer for our operation,” says Fulton. “It is rarely you make one management or production change that has that impact.”

Their enterprise analysis shows corn grazing reduces their winter feeding costs by as much as 40 per cent, compared to a bale grazing system. Mature cattle will go from pasture to corn grazing around November 20. Except for a modest alfalfa supplement, they over-winter on corn until about mid-February. It is an intensive winter grazing system with the cattle moved daily to a fresh stand of corn.

Looking ahead, Fulton says they will have to make a decision on where the hay market is going. “We may cut back on hay sales and opt to increase the cow herd,” he says. While his ongoing part time consulting role with [email protected] Marketing Services is specific to the hog industry, it does provide a good overview of the whole livestock and feed sector.

“An overriding objective as we look to the growth of the farm is to make sure it is both environmentally and economically sustainable,” says Fulton. “We want it to still be here and an option for the next generation.”

While Tyler focuses on the management and production aspects of the farm, Dorelle is also brings her accounting skills into key aspects of the farm business, and she also focuses on raising their six-year-old twins, Evan and Mae. Tyler and Dorelle are also actively involved in many community projects, associations and boards, including the school board and library board, respectively. †

THE OTHER NOMINEES, 2013

British Columbia: Troy and Sara Harker
Alberta: Michael Kalisvaart and Karen Jansen
Saskatchewan: Chad and Darlene Krikau
Ontario: Dana and Adam Thatcher
Quebec: Luc Gervais and Kim Brunelle
Atlantic Canada: James and Amanda Kinsman, Nova Scotia

 

About the author

Field Editor

Lee Hart

Lee Hart is editor of Cattleman’s Corner based in Calgary.

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