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Seems like ranchers have to be
eternal optimists or we wouldn’t be in this business. We’re in
an industry that can’t set a price for our product, so there’s
no way we can build in a buffer to cover our costs of production
and make a profit like other businesses do. We survive the down
times by trying to be good managers, more frugal, making wise
decisions in what we spend for, hoping that the new bulls we
bought will take our cowherd in the right direction, hoping we
can save fuel costs next haying season by changing our methods a
little, hoping for a good calving season, hoping for rain,
hoping… always hoping.
That’s what our industry is built on: hope. Otherwise many of us
would not be in this business at all, since it’s usually not a
very good way to make money. Today, especially, there’s a lot of
gloom, and even despair, as many ranchers wonder how things will
unfold.
Even though we’ve had good prices
for our cattle the past several years, the costs of production,
the price of land, land rent, etc. keep climbing. The rapid rise
in fuel prices in recent months has everyone worried, since
there is no indication that it’s going to stop any time soon.
As Kit Pharo (seedstock producer
in Colorado) points out, the price of fuel affects everything we
do. There is a direct correlation between the cost of oil and
the input costs on most farms and ranches. High input operations
are affected the most. As Pharo states, many things are out of
our control, such as rising fuel costs and the shrinking dollar,
so all we can do is try to change the things we do have control
over, making changes in our own operations. We can work on ways
of managing our land and cattle that reduce our dependence on
fuel (less use of harvested feed, for instance) and put more
focus on letting cattle harvest their own feed.
Some ranchers will shift toward
lower-input cattle that can perform well on grass, so the
grazing season can be extended longer through fall and winter,
using less harvested and less purchased feed. Some stockmen will
even switch to raising grass finished beef, in hopes of shedding
any dependence on harvested grain.
Others, like Charles Chandler
(Chandler Herefords, in Oregon), hope that our industry can
continue to produce a certain amount of grain fed beef, since
that’s what many consumers prefer. Raising cattle just on grass
doesn’t work, across the board, taking longer to reach a
finished product. “For many of the people who enjoy our product,
grain-fed animals are the reason they are enjoying it. The beef
is tender and flavorful. People who prefer that kind of beef,
you are never going to change their mind about it. Beef is not
only good for you, but is a very pleasant and flavorful part of
our diet. Yet I don’t know how, as an industry, we can continue
in the manner we’ve been doing,” he says.
Chandler has been raising cattle
for all of his 89 years of life in a family operation that
encompasses 6 generations and he says that the prices we’ve seen
these past several years are one of the few times they’ve come
even close to being what they should be. Yet the costs of
production have risen faster, and if cattle prices ever drop
again, many people will have a tough time staying in business.
“There are so many things that
enter into the problems in the cattle industry, including
politics, that it’s even hard to talk about it. The future is
scary,” says Chandler. In the past we’ve weathered drought, hard
winters, cattle losses, and everything mother nature has thrown
at us, but the political future of our country and our
increasing dependence on foreign goods and food—to the detriment
of our own manufacturers and farmers—is truly frightening.
Also disturbing are the trends in
public thinking that play into the hands of interest groups that
want to put more restrictions on agricultural practices, blaming
farmers and ranchers for damaging the environment, wanting
cattle off public lands, wanting more wolves, etc.
“What amazes me is how many people don’t seem to worry about
keeping our own producers viable and think it’s ok to depend on
foreign trade. It’s not just a Democrat and Republican thing
anymore; the liberals in both parties are taking our country in
the wrong direction. This is what has me worried the most,” he
says.
“I thought this movement would
stop if enough people worried about it, but at this point in
time if we took a vote, I’d be scared to death. Hopefully it
won’t be as bad as I anticipate,” he says. “It’s frightening to
realize how many people have no clue about what’s going on, and
the aloofness they have—they are not even worried about it.”
This makes our country vulnerable
to the wrong kind of leadership; these trends may not only
disrupt our economy, but also our system of government.
Globalization seems to be taking away what little bit of self
determination we still have as a country. The future of
agriculture will depend greatly on what happens in the broader
arena of government, and whether or not we can control our own
destiny. Beyond that, however, we can only address the things we
DO have some control over.
The only way some ranchers will
survive is to be as innovative as possible, and many have been
already, and that’s the only reason we are still here. The fact
we have survived this long says a lot for our ingenuity,
hardiness and determination, and our innovations and creativity
in using the plant and animal genetics available—and the
advantages of our free enterprise system. We find ways to do the
things we want to do, and as long as we have any semblance of a
free society, we will continue.
Today we need to do an even
better job than we have in the past, to help educate the public
and the consumer about the realities of agriculture, the
benefits farmers and ranchers provide for a healthy environment,
the values of meat in the diet, and the importance of keeping
our livestock producers viable in a changing world.
As Buddy Westphal (Charolais
breeder in Montana) says, at this point it is very challenging
to try to see how things can get any better, since some things
are worse than they’ve ever been—with so many cards stacked
against us. “Some of the prices we are paying for standard items
have risen so fast that when you see the price you think it’s a
misprint! In the past I never thought twice about the cost of
salt and mineral, but today it’s a lot higher, and maybe partly
due to the cost of freight. If freight goes up, the merchant
tacks that extra onto the price he charges us. But we can’t do
that. There is nothing any more inflationary than fuel, because
everything has to be transported around the country,” he says.
“You’d think the price of fuel
would start to have an effect on how much traveling people do,
but at this point most people are still traveling. Hopefully,
eating meat is also something people will keep doing, in spite
of rising costs! And with the high cost of fertilizer, you try
to weigh whether to buy fertilizer, or high priced hay because
you didn’t grow enough. This is becoming a business where you
need to use your calculator for every major decision,” he says.
“And if you spend $3000 for a bull, you want to make sure this
can be justified, in figuring what the difference will be in the
gain of the calves, the weaning weights, etc. These are things I
have to verify for my customers, assuring them that these bulls
will last a long time (5 or 6 breeding seasons) and will give
them 100% live calf crop (and not need extra labor to go pull
them), good weaning weights, and some idea of market value of
the calves and where they should be marketing them, to maximize
their value. If you can gain 50 pounds per calf on weaning
weight, and get at least 30 calves per year from a bull in a
short breeding period, this can help.”
Some of the new technology is
also helping us improve production or improve our genetics to
where we can raise more profitable cattle or enable us to reach
goals we didn’t dream of a few decades ago. “Getting better
pregnancy rates for AI, doing embryo transfer, and some of the
other strides in reproduction have made a difference,” says
Westphal.
It’s still tough, however, for
the stockman to make ends meet, and it may just get worse.
“Right now, interest rates are low, which is a help, but they
won’t stay low. We’re struggling with interest rates where they
are, so what will happen when they go up? We saw the crunch in
the mid-1980’s, when bankers ended up with a lot of ranches, and
this could happen again. Some people back then bought $1000 cows
when they shouldn’t have, or expanded their places, when they
shouldn’t have, and got caught in the high interest,” says
Westphal.
“One thing I’ve noticed this
year, more and more farmers growing wheat are not saying, ‘Oh,
this is going to be a great year and we need to buy the $200,000
tractor.’ And some are saying they could probably net more
dollars off $4 wheat than off the $10 wheat that requires $200
an acre in fertilizer and $5 diesel fuel in tractors and
trucks.” And in the beef industry, more people are going toward
lower input management, if they can. We all have some room for
improvement and fine-tuning our pencil pushing to see what’s
actually cost-effective or not. It also pays to do shop around
to find the best price on needed items.
“More people will be doing their
homework and putting a pencil to it before they do something.
Maybe this is a good thing. Too many ranchers are still doing
things the way granddad did it, and not being flexible or
innovative to do it another way,” he says. We have to find ways
we can reduce our costs.
We’ll probably see more ways that
ranchers continue to survive by bringing in extra cash flow.
“Some will cater to tourists or become a bed and breakfast, or
sell hunting rights instead of giving them away,” he says. There
are a number of ways to find another “crop” we can sell, off our
farm or ranch, to help make ends meet.
“We have seen this a little in
the past, but it may become more of an item in the future. Where
I live, some people are being paid a decent amount for pheasant
hunting on their place, for instance,” says Westphal.
Some of us will try to find ways
to stay in business and keep going, no matter what, just because
we’re in this way of life because we love it. We might be looked
upon as “cattle addicts” and even though we may have less than
ideal situations, we use creative gumption to survive by
adapting to fit our environment and circumstances—and by a
flexibility in our philosophy of life that enables us to not be
bothered for the long hours of work for very little pay. We
enjoy what we are doing. There is an intangible value in being a
caretaker of animals, being in tune with the land and nature, at
peace with ourselves.
We are also trying to hang on,
for the next generation. “We are hoping that our children and
grandchildren will fall for it and become cattle addicts also,
and will want to continue on,” says Westphal. A ranch is still
the best place to raise children, where they can learn the
realities of life and responsibilities that make dependable,
mature adults.
“And in the end result, the work
of a ranch has to fall on family, because we are unable to hire
the caliber of help we need, to be efficient and productive and
make a profit. Often the ranch wife has to be the hired man and
the secretary and record keeper—and doing the book work is just
as important today as feeding the cows. The old saying that if
the help were any good, they’d have their own place, is usually
true. And if they are good, the competition for jobs is so crazy
that most people will go work somewhere else that pays better,”
he says.
“The labor issue is a definite
problem for ranchers, and you also sometimes question whether
you really want your child to come back to the ranch and have to
go through such tough times. The old joke that giving your ranch
to your child is child abuse, may be not that far off!” Yet in
many ways this is still a great way of life, if we can find a
way to keep doing it.
“The life style is something that
I never want to retire from, because I am already doing what I
love. I am hoping that this will go on for more generations; I’m
thrilled to have a young grandson who loves to feed with us, or
tramp through the pastures. I love what I’m doing and I hope to
be able to keep doing this until I’m very old, and I hope it
keeps me young. It keeps me working, keeps me thinking, and
keeps me in shape,” says Westphal.
“We all have to find some way to
make our efforts pay. One thing I’m doing is raising bulls. I am
utilizing the same ground to raise $3000 calves instead of $500
calves. For me this is one way to maximize the production from
my acres. It’s barely working, for me, and I shake my head and
wonder how someone can manage if the calf crop is only bringing
$500 per calf,” says Westphal. Everyone has to find a way to
maximize what their ranch can produce—whether it’s more pounds
of beef produced (at least cost, with less cows) or more money
for the cattle, or some other side crop like a bed and
breakfast, dude ranching, etc. We have to generate more income
some way.
“Obviously, family help is a big
item in whether or not we can make it, and also one of the
handful of justifications for still continuing on. I confess
that if it wasn’t for a son and a grandson that I am hoping will
enjoy this life for a lot more years, I probably wouldn’t be
trying as hard to keep making it work, right now,” he says. This
does give us incentive to hang on, and still hope that the next
generation can make it, if they want a shot at it, and we want
to hang on long enough to help them do that. This is still the
best place to raise kids. They develop a good work ethic, and a
sense that they can do an adult’s job—and a sense of self worth.
It may be a waiting game, trying
to do our best with what we have, and hoping we can out-wait,
out-last the hard times. Kit Pharo says that back in the drought
and dust storms of the 1950’s his grandfather would say, “It
will rain again, and when it does, we will need it.” A good rain
always helps.
Most of us cattlemen are in this
for the long haul, not just as a business, but as a way of life.
We raise cattle because we love this life, and we are in it for
the long haul. We are committed to agriculture in a way that no
businessman is committed to his company, job or profession. This
is more like a marriage than a business and we stick to it
through thick and thin.
Hope springs eternal, and it
keeps us going. Even if today looks bleak, there is always
tomorrow. As one old cowboy stated several years ago, over the
past ¾ of a century he’s had 2 good years: 1973 and “next year”.
Perhaps the most important characteristic of a cattle rancher is
that we are dedicated optimists! |
