I spent my first five years as a farmer raising custom cow-calf pairs, but my custom grazing days are over. After 40+ hours of spreadsheets, calculations and analysis, I decided to spend 2018 breeding and flipping heifers under my ownership.
Custom grazing allowed me to get my start in farming, but did not fit the future I have planned for my business. My vision has always been to make my own decisions without being beholden to someone else. A custom grazier technically is not a partner or employee of the herd owner. However, working with a herd owner does limit your freedom. You will almost always need to alter your operation in some way to keep them happy. If you don’t accommodate your herd owner, you won’t have one for long.
It’s very important for both owners and graziers to choose each other carefully. Not seeing eye-to-eye with the other party, or working with a business that is having internal problems, will bring an early end to your joint endeavor. Both of my custom grazing deals ended in less than 2 years. I need a business plan with future stability. More on this in my next article.
You need to make sure before signing a deal that custom grazing is really the most profitable thing you can be doing with your land and resources. What I discovered when evaluating my options this past winter is that I was leaving money on the table by custom grazing cow-calf pairs. You will usually be signing a contract for a set amount of time. Say you sign for 3 years, and at the end of year one, you realize you’ll never make any significant profit doing this. You are then doomed to two more unprofitable, wasted years.
Here’s why I chose to switch to developing owned heifers. I can put more yearling heifers on my land than cow-calf pairs, because heifers eat less, and because the heifer operation is seasonal. Not having to save stockpile for November and December grazing allows me to increase my summer stocking rate. The gross margin I make from one custom cow-calf pair in a year is the same as what I will make from one heifer, bought open and sold pregnant. So I have gone from 25 units grossing $400/year to 40 units grossing $400/year! Going to a seasonal operation is saving me tons of overhead expense too. I no longer need to buy, transport and feed hay. I save 4 months of maintenance and fuel on my four-wheeler, which was really getting damaged by trying to drag hay through New York mud with it all winter. I also live an hour’s drive from my farm, so I save 4 months of fuel and wear-and-tear on my truck by not making that drive over the winter.
I feel that a seasonal operation is the more natural choice for my area. The soil structure and heavy precipitation in my area create a need for expensive, high-input management (tractors, barns, harvested feed and animal confinement) if pastures are to be protected from damage during our wet, snowy winters. I bale grazed my past custom herd through the winter successfully, but still ended up with a lot of mud, a lot of work, and a lot of wasted money. I can see the point of choosing to bale graze a year-round herd for the fertility boost on poor pasture. I have seen improvement in my pastures on my bale grazing areas after the initial period of lost production due to recovery from the mud. But being on rented land that I know I will never own, I will not be paid back fast enough for putting money into hay as a soil amendment. Any economic advantage generated by pasture improvement from hay will be cancelled out by the additional overhead expense of being year-round instead of seasonal.
Bulls are in with my heifers now. I plan to pregnancy check them on October 15, and have them delivered to their new homes by Thanksgiving. No one has spoken for them yet, but I wish to sign a sale contract and take a deposit on them as soon as possible. Once they are gone and the final money numbers are in, I’ll know whether or not my choice to get out of custom grazing was worth it.
Questions? Comments? Suggestions?
We’d love to hear from you in the comments below.
OR, come talk with Meg and other On Pasture authors at the National Grazing Lands Conference in Reno, December 2-5.
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