- Author: Dan Macon
One of the most important economic resources is Sample Costs for Beef Cattle Finished on Grass (Forero et al, 2017). As the authors suggest, "Changing the business structure of the ranch from selling live animals to merchandising meat requires a new set of skills and knowledge." Ranchers who want to sell directly need to like interacting with the public and have a firm grasp on food safety, meat quality, and marketing regulations (for more on this, see Selling Meat and Meat Products).
According to the US Department of Agriculture's Agricultural Marketing Resource Center, value added products are defined as follows:
- "A change in the physical state or form of the product (such as milling wheat into flour or making strawberries into jam).
- "The production of a product in such a manner that enhances its value, as demonstrated through a business plan (such as organically produced products).
- "The physical segregation of an agricultural commodity or product in a manner that results in the enhancement of the value of that commodity or product (such as an identity preserved marketing system)
"As a result of the change in physical state or the manner in which the agricultural commodity or product is produced and segregated, the customer base for the commodity or product is expanded and a greater portion of revenue derived from the marketing, processing or physical segregation is made available to the producer of the commodity or product."
By definition, then, selling meat is selling a value added product - or is it? How do we know whether we're keeping a greater portion of the revenue if we're selling meat instead of selling a live animal?
The UC Davis cost study helps answer this question. It analyzes the purchase of 20, 800-pound heifers that will be finished on grass at a weight of 1100 pounds. The heifers will be grazed on leased irrigated pasture for a six-month grazing season at $30/AUM.
If you're considering selling meat (and even if you're already doing it), you might say, "but I already own the cattle - I wouldn't go out and buy heifers when I can simply finish my own! And I already have enough irrigated pasture, too - why would I rent it?"
This is a critical point in terms of analyzing a value-added business! In order to understand whether selling meat is actually adding value, the meat business has to buy the live animal (at least on paper) from the ranching business. If the ranch typically sells 800 pound heifers, the grass fed business has to rent pasture to finish these animals. In other words, the only way we can determine whether the extra costs associated with finishing and processing animals and then selling meat adds value is analyze the meat business as a stand-alone enterprise.
The cost study offers two sample economic analyses (one for selling carcass beef, and one for selling at farmers markets). I find the discussion extremely useful for thinking about the categories of additional expenses I incurred as a direct-market rancher. One important factor that I added in my own analysis, however, was the value of my time. Perhaps a typical summer week from 2012 will help illustrate this point.
During the summer of 2012, we marketed grassfed beef and lamb. I attended the Roseville Farmers Market each Tuesday, the Tahoe City and Truckee Evening Farmers Markets each Thursday, and the Auburn Farmers Market each Saturday. With this many markets each week, my sales volume was strong! However, from the time I left home in the morning to the time I'd put everything away after each market, this schedule took about 30 hours of my time (and over 200 miles of driving) each week. I did have help with some markets, but I always found that my customers would rather buy from me than from an employee (my best employees averaged about 60% of my typical sales). Alternatively, I could hire somebody to do all of the things that needed to be done at the ranch (irrigating, moving livestock, etc.). I also needed to handle scheduling with our meat processor; sort, load, and deliver live animals; pick up, store and inventory packages of meat. In other words, selling meat instead of live animals took much more of my time.
When we're selling meat, we can increase total revenue two ways: by selling more meat or by raising our prices. We found that we could get a premium for our grassfed lamb and beef, but that there was a limit to this premium. Most folks balk at paying more than $100 for a leg of lamb. While we could keep more of the consumer's meat-buying dollar in our own pocket, there was a limit to how much more most folks would spend.
Based on these experiences, I've taken the budget used in the cost study and added in marketing labor. I've also added in a line for an owner draw. After all, most of us aren't in business simply to pay our expenses - we need to pay ourselves, too! And we need to have a firm grasp on the value of our stories - how we raise our livestock is important; so is the quality of our product. That said, we found we needed to sell the entire animal (steaks as well as chucks) to be profitable.
Finally, there is a time element to all of this. When we take lambs to the auction or sell them to a processor, we have a check within a week's time. When I was selling meat, the cash flowed in more slowly. The time value of money, and the timing of cash inflows and outflows, are a consideration for any value added business, as well.
If you're thinking about marketing meat, or if you'd like to analyze your existing business, contact me at dmacon@ucanr.edu or (530) 889-7385 - I'd be happy to walk you through this analysis!
- Author: Dan Macon
Now that our Pyrenees x Akbash "puppy" Elko has nearly reached full-size, I have difficulty remembering he's still a puppy - a 120-pound puppy, but a puppy nonetheless. There are signs, however, that his brain is catching up with his body! Here are a few updates and observations.
For much of the winter and spring, Elko has been with our rams (who graze separately from our ewes except for a six-week breeding season). This allows us to keep Elko with livestock without great expectations that he'll need to provide protection - we find that our rams are less susceptible to predators, especially when we graze them at our home place. But this arrangement also gives Elko some sense of what his job will be when he's mature. He definitely seems bonded with sheep - while he's a friendly dog who is enthusiastic about feeding time, he'd prefer to spend his day in the company of ovines rather than humans - critical for a livestock guardian dog in our operation. The rams have also helped teach Elko some manners.
The next step in Elko's education has been to move him with the rams to another location. We typically move dogs with the sheep in the stock trailer; last Sunday, we hauled the rams and Elko to a pasture several miles away. I was encouraged to watch Elko walk the entire perimeter of the new field when we unloaded - that's something our working-age dogs do consistently.
After we wean the lambs in early June, we'll plan to put Elko with the dry ewes and one of our older dogs. Hopefully, the older dog will help Elko continue to learn about how to behave around different classes of sheep (much like our oldest dog, Reno, taught his protégé how to act around lambing ewes this winter). I'll keep you posted!
A final note: we typically have not had to clip our livestock guardian dogs in the summer - they don't seem to get stickers even if they're rough coated, and they seem to handle the summer heat just fine. Elko's coat is different, however; we'll likely give him a haircut before the end of the month.
- Author: Dan Macon
A number of larger ranching operations in the Sacramento Delta have been grazing sheep and cattle together on a large scale with promising results. Typically, a rangeland manager (like me) would suggest that one cow equals five sheep in terms of stocking rate; in other words, for every five sheep a rancher adds to a pasture, he or she would have to remove one cow. The ranchers in the Delta, however, are finding that this ratio doesn't necessarily hold. Ryan Mahoney of Emigh Livestock, for example, reports that he can increase the stocking rate on his pastures by grazing sheep and cattle - without over-utilizing the pastures.
But what about animal performance? Obviously, the point of any commercial grazing operation is to put pounds on livestock or to produce offspring. I recently came across a 2001 paper in Proceedings, Western Section, American Society of Animal Science by B.C. Glidewell (of the USDA Agricultural Research Service in Oklahoma), J.C. Mosely (of Montana State University) and J.W. Walker (of the Texas Agricultural Experiment Station). In an experiment conducted at the U.S. Sheep Experiment Station near Dubois, Idaho, the authors compared the diets and average daily gains (ADG) of yearling Columbia ewes and yearling crossbred steers in four treatments:
- Cattle alone
- Sheep alone
- 75% cattle / 25% sheep
- 50% cattle / 50% sheep
Paddock size varied to keep stocking rate constant between treatments. Fecal samples were used to determine the botanical composition of sheep and cattle diets during the 28-day grazing periods.
Keep in mind that the experiment was conducted on a vastly different range type than the annual rangelands and irrigated pastures in our foothill and Sacramento Valley regions. However, the analysis of dietary preferences suggests more dietary overlap that I would have expected. The diets of both were grass-dominated (see Table 1).
Livestock | % Grass | % Forbs | % Shrubs |
Cattle | 80% | 19% | 1% |
Sheep | 76% | 22% | 2% |
Table 1: Dietary Preferences
When sheep and cattle grazed together, dietary overlap averaged 86%. These findings were consistent with other research conducted on similar forage types in eastern Oregon (Vavra and Sneva 1978), which found dietary overlap of 78-86%. They differed from results in western North Dakota (Kirby et al. 1988), which found 30-35% overlap. The nutritive quality of sheep and cattle diets (as measured by the percent of crude protein (CP) and neutral detergent fiber(NDF)) did vary by treatment. Cattle diets were less fibrous when they grazed with sheep (that is, they were lower in %NDF), likely because cattle ate less grass due to competition with the sheep.
Steer performance (measured in ADG) did not vary significantly among treatments, but did trend higher as the proportion of sheep increased. Similarly, the performance of the yearling ewes in the trial trended higher when sheep grazed with cattle.
The authors also compared total gain per hectare (roughly 2.5 acres). As you might expect, total gain per hectare was related to growing-season precipitation in eastern Idaho. Interestingly, total gain by hectare also seemed to be related to the combination of sheep and cattle. In a wet year, multi-species grazing produced more pounds of livestock per hectare than cattle grazing alone. In a dry year, multi-species grazing produced as much gain per hectare as cattle grazing alone. The authors suggest that over the long term, at least in eastern Idaho, gain per unit of rangeland should increase by grazing cattle and sheep together.
Obviously, multi-species grazing won't fit every operation. Sheep and cattle often require different working facilities, fences, and management skills. However, as ranchers in the Delta are finding anecdotally, grazing cattle and sheep together may actually increase production from a given pasture. We should consider doing a similar study on annual rangelands and irrigated pasture!
Here's the complete reference to the paper:
Glidewell, B.C., J.C. Mosley, and J.W. Walker. 2001. Sheep and cattle response when grazed together on sagebrush-grass rangeland. Proceedings, Western Section, American Society of Animal Science. 52: 156-159.
- Author: Dan Macon
Last week, I held my first California Cattle Grazing School at the UC Sierra Foothill Research and Extension Center in Browns Valley. The two-day school, an adaptation of Roger Ingram's long-running California Grazing Academy, included classroom talks and field-based learning activities. And as I had hoped, it also featured a great deal of rancher-to-rancher learning. Sometimes, I think, many of us learn as much from these informal conversations as we do from prepared lectures - I know I do!
One of the class participants, Clay Daulton, is a long-time Madera County rancher. I've known Clay since I was just starting my professional career more than 25 years ago. Clay recently became a California Naturalist, doing his capstone project for the program on the varieties of grass and forb species on his foothill rangeland. Clay told us, "I spent half of my life paying attention to cattle - I could pick out a sick calf in a pasture from 100 yards away. But I should have been paying attention to my grass." Clay showed us how he calculates the carrying capacity of his ranch each fall based on the weight of the steers he's contracted to graze and on the amount of carryover forage available from the previous spring.
Earlier in the day, after I gave a formal talk about fencing systems and stockwater development, Paidin Gillis, who ranches in Lincoln, shared his technique for keeping water troughs from freezing in colder climates. He sketched out the system on a flip chart while the rest of the class looked on. Clifton Dorrance, from the Hollister area, shared his technique for burying concrete water troughs to keep cattle from undermining the trough - and he told us that this technique also makes water more accessible to wildlife.
During the first day, a group of local ranchers (known humorously as the "Foothill Grazing Geeks") joined us to talk about how they use the managed grazing principles we cover in the school. Connie Scheiber, from Lincoln, talked about switching their operation from fall calving to spring calving to match forage demand with the period of rapid growth. Joe Fischer, Brad Fowler and Rob Thompson talked about the value of forage diversity in their irrigated pastures. As teachers, Roger and I sat back and listened!
In one of my favorite essays ("Let the Farm Judge", which can be found in Bringing it to the Table: On Farming and Food), Wendell Berry writes,
"What does it mean that an island not much bigger than Kansas [England] ... should have developed sixty or so breeds of sheep? It means that thousands of farmers were paying the most discriminating attention, not only to their sheep, but to the nature of their local landscapes and economies, for a long time."
I was reminded of Berry's emphasis on the knowledge of farmers (and ranchers) this weekend. While much of our work in cooperative extension focuses on research and teaching, I think we serve our communities most effectively when we create space for people to learn from one another, as well.
If you missed this year's California Cattle Grazing School, consider registering for our California Sheep and Goat Grazing School in September - stay tuned for details!
- Author: Dan Macon
While it may be difficult to imagine with another atmospheric river storm bearing down on Northern California this evening, irrigation season is just around the corner. Most of the water districts in the foothills will begin delivering water around April 15 - and six months of moving water through irrigated pasture will begin for many of us! Here are a few tips to help make this coming irrigation season run smoothly!
First, we should schedule irrigation (or design our systems) to provide the right amount of water at the right time to meet plant needs. These obviously change as we go through the irrigation season - after this weekend's storm, we should have plenty of soil moisture for a week or more.
Plant and soil water demand, ideally, should determine the quantity of water applied and the frequency of irrigation. This will help improve forage quality, reduce runoff and increase water use efficiency. But how do we know what the plant and soil water demand is?
One of the easiest ways to determine this is simply to learn to assess soil moisture by feel. The Natural Resources Conservation Service has a great pamphlet entitled Estimating Soil Moisture by Feel and Appearance. If you'd rather have a hard copy of the pamphlet (it's even printed on waterproof paper), we have copies at the office!
Another way to determine soil and plant water demand is to use the California Irrigation Management Information System (CIMIS) to estimate evapo-transpiration (or ETo). ETo is the amount of water transpired by plants and lost through evaporation; CIMIS has weather stations throughout the state that provide regional estimates of ETo. The closest stations for our region include one near Auburn and one at the Sierra Foothill Research and Extension Center in Browns Valley. The CIMIS website provides data regarding daily (and even hourly) ETo, precipitation, air temperature, soil temperature, humidity, wind, and a variety of other parameters that can impact irrigation.
Finally, if you'd like to know exactly what's happening in your pastures, I can install a WaterMark moisture sensor. These sensors can help you track the effectiveness of your existing irrigation system and adjust the quantity of water applied and the frequency of application. Call the office if you'd like to schedule an appointment! You can reach me at dmacon@ucanr.edu or (530) 889-7385.
In future weeks, look for additional blog posts about managing irrigated pasture! Also, mark your calendar for Saturday, May 19 - I'll be co-hosting an irrigated pasture workshop with the Nevada Irrigation District and the Nevada County Resource Conservation District in Penn Valley from 8 a.m. - 11:30 a.m. - stay tuned! In the mean time, enjoy the coming rain!