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Fodder for Thought

We Need A Net-Profit Ranching Mindset

Four-step ranching plan from Colorado beef producer can lead us toward net-profit thinking.

I'm continuing the discussion on profit from last week and want to share some thoughts from a series of books I recently finished.

These were sent to me by Chip Hines, a well-seasoned Colorado beef producer who has worked with a number of different ranches over the years and for a time ran his own outfit.

This self-published, opinionated cowboy takes a critical and honest look at the problems he believes the cattle industry currently faces. Then he suggests alternative solutions to overcoming what he describes as the "high-input-low-net-profit system" used by the majority of cow-calf producers today.

Instead, Hines promotes a low-input ranching philosophy which uses management instead of money to solve problems.

The backbone of his low-input philosophy includes the following four fundamental management principles:

  • Calve in sync with nature.
  • Require cattle to live in a more natural environment.
  • Use genetic selection and rigorous culling for smaller cow size and lower milk production.
  • Adapt more intensively managed grazing.

With these management changes, Hines says producers can expect an increased carrying capacity on their land from several efficiencies. First, smaller cow size allows more cows as opposed to fewer large cows which can be grazed on the same acreage. Second, you will have lower maintenance feed costs from decreased milk production and smaller cow size. Third, you will have increased forage production  because of improved grazing management).

Ultimately Hines’ management suggestions mean producers can run more cows with less feed costs, which in turn means more calves to sell and a higher net-profit potential.

To some mainstream producers these management changes may seem outlandish. To me, however, they seem quite logical if one takes the time to consider the facts. Hines gives plenty of examples of evidence to support his case in his three books. In addition, a recent blog post by Dave Pratt at the Ranching for Profit blog, gives further clout to this low-input philosophy.

Pratt sums up the current state of the cow-calf sector quite well in the following statement:

“As a group, North American ranchers are the most productive in the world. We wean bigger calves or more calves per cow than anyone else, anywhere else. We are hitting the bull’s eye, but we are aiming at the wrong target.  We’ve been focused for so long on increasing productivity that sometimes we don’t realize that less can be more…less productivity can mean more profit.”

Bigger is not always better and doing more will not always guarantee better results. Less can be more, and in the case of Hines’ call for low-input ranching, it can yield higher net profit in the long term.

A good manager knows it is important to take a step back and reevaluate methodology on a regular basis. Isn’t it about time we do the same for our industry’s focus?

Learn more about Hines’ low-input ranching philosophy on his website and find his books on Amazon.

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