Flexibility May Be Greatest Management Tool in Livestock Operation

US - High corn prices, drought, terrorist attacks, mad cow disease, more drought and high fuel prices have all cut into beef prices in the past 10 years, said a Texas Cooperative Extension specialist.
calendar icon 20 January 2007
clock icon 3 minute read
Nobody knows when these issues will develop, but building flexibility into the livestock management plan can help a producer weather the storm and come out on the other side, said Dr. Ted McCollum, Extension beef cattle specialist. He spoke at the Southwest Beef Symposium, held Jan. 16-17 in Amarillo.

"Having a system where you can react and respond, to be nimble and have room to adjust, is important," McCollum said.

Dr. Ron Gill, Extension livestock specialist in Stephenville and speaker, said several producers had to liquidate their herds for one reason or another. The rebuilding time gives them the opportunity to introduce flexibility when re-entering cow/calf production.

"The primary goal is to prevent forced management decisions," Gill said. "Many times we are forced to do things in reaction to drought or something else. Sit down and plan out where you need to go."

Being forced into an immediate management decision can be one of the most economically damaging events in a livestock operation, he said. Having a management plan that anticipates both negative and positive influences in the business can help prevent large losses and capitalize on available opportunities.

Plan for a loss of grazing acres; explore more stable leasing options, Gill said. Wildlife or hunting ventures may be another area to build a little flexibility into the operation.

The key areas to introduce flexibility are stocking rate, enterprise selection/diversification, counter-cyclical management, genetics, supplements, outside investment and emergency reserve, Gill said.

"There's no flexibility if you are already stocked to the hilt," he said. "Allow the stockpiling of standing forage to use later for feed or fuel."

The enterprise can vary between cow/calf, young stocker cattle and stocker cows, Gill said. Stocker cows that have come through an ordeal and are thin, but healthy, can put on good weight gains and be more valuable on the other side.

Retaining the calf crop and putting more weight on them on grass before they go to a feedyard is an option, as well as purchasing calves that are sold cheap and putting them on grass for a cheaper gain than the feedyard, he said.

Niche markets, natural beef and counter-cyclical marketing, or timing the calf crop to eliminate competition with the major fall calf crops, are other means of building flexibility into a management plan, Gill said.

Jay O'Brien, an Amarillo cattleman and speaker at the symposium, said shipping yearlings in September and October is traditional, "but what is the gain you get in the fall if the yearlings are big by late summer? Would you more than make up for it by shipping in July or August if the yearlings are big?

"We can fit flexibility into our operation in making our long-term plans," O'Brien said. "But we must plan to enable flexibility. There is no way that we can be flexible in our stocking if we are perennially short of grass. Part of the cost of flexibility is to have a safety margin of grass to spare."

In summary, McCollum said producers at the symposium did not learn about new management technology, but instead heard about the importance of developing a plan and implementing proven management strategies that fit their resources and help adjust to situations.

"It's all about production risk management," he said. "Everything we heard about, from managing costs to adjusting to situations, are necessary to come through disasters and other pitfalls."

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