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Putting The Profit Back in Ranching

Putting The Profit Back in Ranching

Story by Dee Ann Littlefield

�Think outside the box,� Colorado rancher Kit Pharo challenged his attentive audience at the �Moving from Production to Profit in Ranching� seminar in Decatur on September 29, 2010. The Decatur seminar was one of three stops on Pharo�s speaking tour of Texas, hosted by the Texas Grazing Conservation Initiative (GLCI), the Natural Resources Conservation Service (NRCS), Texas Soil and Water Conservation Districts and AgriLife Extension. Other seminar locations included Commerce and Beeville. Over 400 people attended the seminars statewide.
 
�The production-driven paradigm most ranchers operate in no longer makes sense,� Pharo said. �They have unknowingly reached a point in which every increase in production actually reduces their net profits.

�But making a shift from a production-driven paradigm to a profit-driven paradigm is much easier said than done,� he explained. �Even though a paradigm shift won�t be easy, it will be necessary if ranchers want to remain profitable through the downside of the cattle cycle.�

Pharo, a rancher from Cheyenne Wells, Colorado, made the paradigm shift in 1990. He began by assessing all his input costs of production and determining ways to decrease those costs.

�The only way you can save money is to not spend it,� Pharo told the audience men and women ranchers and NRCS employees.

Pharo encouraged the audience to open their minds to new approaches to their current ranch management plan. He explained he reduced his herd size to more conservative stocking rates and gradually replaced his hay feeding with a rotational grazing plan.

Next he matched his cow�s production cycle to available forage resources on his ranch, so he didn�t have additional feed input costs, such as hay. He moved his calving schedule to May and June so the cow�s nutrient need would be met by what the ranch could provide. He still weans his calves in October.

�I wean smaller calves, but I wean more total pounds because my conception rates are higher and my death loss is lower,� he said.

Pharo added that the lighter calves are worth more per pound in the marketplace, which increased his ranch�s profit. Moving to this schedule reduced his labor and input costs, such as hay.

In addition to putting less money into his operation, Pharo said he also puts in less time than he used to, while still making more money.

�I�m not up all night trying to calve heifers in a snow storm in February,� he said. �There�s three extra months I�m not riding around the ranch checking cows to see if they�ve calved. My whole operation is easier.�

Another factor Pharo considers a key to a rancher seeing a profit is building a herd of �optimum cows.� Pharo points out that if a ranch can support 100 head of 1400-pound cows, it will support 120 head of 1100-pound cows on the exact same inputs.

�That�s 20 percent more cows producing 20 percent more calves, and they will still produce more total pounds of beef than the larger cows,� he said. �And again, the calves out of the smaller cows, because they have smaller individual weights, will be worth more per pound.�

Pharo cautioned that ranchers need to reduce their cow size only to the point that their calves still fit the parameters of the existing corn-based commodity beef industry.
Pharo feels that not all cows are created equal and says a strict culling program has been one of the major keys of success. The cows the required more inputs were deemed inefficient and culled from the herd. After implementing this culling method 20 years ago, Pharo still annually culls the bottom 10 percent of his herd.

�Producing efficient cows that meet their environment is an absolute must in a low-input program,� Pharo stressed.

The audiences responded well with Pharo�s talking points, and had extended question and answer sessions.

�(GLCI Coordinator) Jason Hohlt and I heard Kit Pharo speak at the Fourth National Grazing Lands Conference meeting in Reno last year,� says Jeff Goodwin, NRCS GLCI coordinator in Cleburne. �We felt his innovative approach to help ranchers put more profit and enjoyment in this business was something Texans would appreciate hearing.
�We have had a really good response to his seminars,� Goodwin added.

Pharo is nationally known as a successful rancher and business man. For more information on his program, visit www.pharocattle.com. For more information about GLCI, including upcoming workshops and seminars, visit www.glci.org. Information on NRCS can be found at www.tx.nrcs.usda.gov.
 

Rancher Kit Pharo provided ranchers with time-tested, no-nonsense information they could readily and easily put to use in their own operation.

Kit Pharo, nationally known rancher and businessman, was invited to speak at three seminars across the state of Texas in September. The series, titled �Moving from Production to Profit in Ranching,� was attended by over 400 people statewide.

Rancher Kit Pharo provided ranchers with time-tested, no-nonsense information they could readily and easily put to use in their own operation.

Kit Pharo, nationally known rancher and businessman, was invited to speak at three seminars across the state of Texas in September. The series, titled �Moving from Production to Profit in Ranching,� was attended by over 400 people statewide.

Colorado rancher Kit Pharo maximizes his profits by minimizing his inputs. Another key to his success have efficient cows in his heard. On his ranch, the optimum cow is a 2 to 4 frame cow that weights 1000 to 1,250 pounds and produces calves that work well in the feedlot system.  

Colorado rancher Kit Pharo maximizes his profits by minimizing his inputs. Another key to his success have efficient cows in his heard. On his ranch, the optimum cow is a 2 to 4 frame cow that weights 1000 to 1,250 pounds and produces calves that work well in the feedlot system.