Right-Sizing Your Grazing Operation – What Works Best?

John Marble and Troy Bishopp have something in common with many On Pasture readers. They expanded their grazing operations by renting pastures and grazing more cattle. John owned only two of the 11 properties where he grazed cattle. Troy rented 5 properties plus his home farm where he grazed cattle for his custom grazing business.

But that’s all changing. In December both graziers wrote about downsizing their operations in favor of making more time for more fulfilling lives. Both are letting their leased pastures go and adjusting the class and time they graze so that they continue to bring in income but also have time for family, friends and even vacations. John is downsizing and changing his operation so he has time to pursue other interests, while Troy is focused on increasing camping and grandchildren days.

This raises a question that John started to answer in his first piece, and one I think we could all benefit from thinking about:

“Well, if time is so important, why did you rent all those places in the first place?”

I think we can all relate to John’s and Troy’s answers. So, we’ll start there. (And for a bit on the other influences at work, check out Kathy’s Notes this week.)

Why We Expanded

John Marble in his own words

Honestly, why was I on that unending path of growth? What was the true driving force causing me to seek more and more scale?

An easy answer would be greed. I was just trying to make more money so I could have a new pick-up truck. Except I don’t think that is true. As my friend Dave Pratt pointed out, “You drive a twenty-year-old truck, and I don’t think you give a rip about money or status.”

That left me with another reason: Ego. Plain and simple, prideful, macho, ego. Ouch.

But my friends who know me well disagreed with that idea, and Dave suggested a different reason: “I think what you have been seeking is the validation. You want people to see the progress you are making, to see the good things you are doing here. And perhaps accept your example. You want people to appreciate your work and give validity to your efforts.”

As much as it pains me to admit it, I think my friend Dave is correct. The biggest enjoyment I got from my rental pastures was watching the ecological change that we were able to bring through managed grazing. As I walked those pastures, I saw less bare ground, less noxious weeds, stronger, more productive grass, more wildlife, and happy landowners. And I wanted people to see what I was doing and how nice these places could look.

We have had the pleasure of working with people and plants and animals. And we’re doing the one thing that every person in agriculture is always hoping for: we’re leaving this place, our land, in a better state than we found it in. Validation, then, was my biggest reward.

I hope (and believe) that I’m ready to be finished with all of that, and I’m ready to move on to more important things. I still want to make ecological progress. I still want to manage good grass and good cattle. But I want to do these things in a way that allows us to make use of the limited time we have, enjoy our own lands, and enjoy the “extra” time we will be gaining.

Troy Bishopp in his own words

After reflection I can honestly say I got bigger (back in the earlier days of custom grazing), because:

– I want to support my family financially.
– I wanted to farm full-time again but needed scale.
– Since I was a trusted grass craftsman, my customers expanded.
– I wanted to prove that with my grazing experience I could take fallow land and make good grazing out of it.
– My “ego” was thinking I might be able to lead a model in NY to reclaim land with animals grazing properly. It would be a local stimulus.

I knew there was risk and investment of time, infrastructure, logistics, many things, but I was willing to give it a go because it hadn’t been done much before. In this respect I felt like a pioneer, and I knew my financials wouldn’t be robust but over time they would become so because I could increase stocking rate, time spent per animal would be reduced and I could amortize the infrastructure over more animals.

What I couldn’t predict is the behavior of landowners to use my work against me to increase my rent (or start adding animals to my herd— “just a few”), and end relationships. Customers are always changing their scopes, and leases were too short (5 years or less) to recoup any real profit for my time and responsibility for all the animals and multiple properties. I felt like the carrot was always just in sight but one day of burnout suggested it was time to reevaluate. It’s really f*(@#g hard to realize all the work was just for wages, which many of us farmers know all too well.

Should I have been more diligent on the financial/time management part? Absolutely. But here’s the thing, entrepreneurial spirits work hard on a future vision and sometimes get a bit too excited about the prospects and maybe leave some of the details till later, as, “I think we’re doing OK and wait till next year.”

Looking back at this is painful for me because I thought my work-ethic would overcome all obstacles. I come from “No one will out work me or tell me something couldn’t be done”. My mindset or action item should have been, “You can’t outthink me!”

Water under the dam now, but these types of hard lessons signal to the next generations to have good goals, realistic plans, and people to help you on your journey. And find a work-life balance ratio you can manage.  It gets pretty lonely out front and may cloud judgement without continued monitoring and evaluation. Isn’t that why On Pasture is trying to highlight these topics?

More from Troy via his Quebec Farmers’ Association Webinar

In this recent webinar, Andrew McClelland asked Troy the same question we’re looking at this month, “What is it that made you want to do all those extra tasks around the farm to begin with? Do you remember that impulse within yourself or why you thought you had to take on winter grazing responsibilities? Or customers who didn’t pay that? What was it that made you always want to expand and have more and more tasks? ”

Troy’s answer starts with the same idea of ego driving his expansion. And then he talks about the rewards of providing ecological value that John shared. So perhaps, like John, validation could also be a motivator.

I wanted you to see this because Troy also goes on to look at the financial aspects of what he was doing and how his look at the dollars and cents revealed practices that didn’t serve him well and ways that he could be more profitable. He explains in this 8:34 segment of the webinar. Then we finish off with some questions you can consider that highlight the points that John and Troy are making here.

Caution! Adult language ahead.

Transcript:

Andrew McClelland

Often when we’ve talked to them, this has come up: the idea that you can scale back your operation and sometimes make a comparable amount of money and be rewarded with a larger chunk of time. And one of the things that I hear pretty consistently from farm families is the idea that agricultural producers have been sold for the past 70 years, that expansion is the key. Go big or go home. And then I hear from a lot a lot of producers, “Oh, we expanded, we got loans, we built more buildings, we got a larger herd. And when you come right down to it, we’re making the same level of profit.”

When you look at how your operation was before 2019, before you and your wife decided to kind of downsize and focus on the on the important things after your brother’s passing, what is it that made you want to do all those extra tasks around the farm to begin with? Do you remember that impulse within yourself or why you thought you had to take on winter grazing responsibilities? Or customers who didn’t pay that? What was it that made you always want to expand and have more and more tasks?

Troy Bishopp

Well, that’s a good question…….
.
.
.
.
I believe it’s a man thing.

Andrew McClelland  

Yeah.

Troy Bishopp

There’s a certain level of money that’s coming in. Let’s say there’s more money coming in. And I wasn’t as focused, and I should be on the expense side. So, you run around, money comes in, money goes out, and you’re saying, “Oh, hey, this is good.” And then when you get your taxes done, you really see.

What happens is, at least for me, I can justify anything. So, I say, “Yeah, I can take that on.” And, you know, there’s a certain pride, you could call it, or arrogance, or you want to be scale, where somebody says, “Oh, that guy is at scale, you know, we can listen to him.” You know, there’s a little bit of ego going on.

And it clouds your judgment. Brian, and I talk about it a lot. We don’t talk about financial stuff, financial decisions, like honing right in, is this profitable? If it’s breakeven, and I lose my time, is it really profitable? You know, what is the depreciation on starting that tractor, or all those other things. I was always justifying some of these things. I was bringing in feed to feed these cows, and I could justify this extra work because I was going to get this free fertility while the customer is paying for the feed.

That’s bullshit. There’s not enough soil health benefits for me to basically work for soil health. I say, bullshit on that. For me.

Because I was like, “You can bring in three, four or 500 bales, and you’ll feed them on the land, and, come come to find out, you’ve smashed up a bunch of paddocks from feed bale grazing and now you’ve got to reseed it or do something. It takes longer to recover.

And I say, “Well, I got all this good fertility.” But I lost my time.

I traded, I justified it. Everyone has to make decisions. And for me, I justified it. And then got kicked a little to focus in harder. What does it really cost to do this, and what does it cost not to do it? You know, what are the advantages and disadvantages? Again, it has to come down to finances.

I work with probably two hundred, three hundred farmers a year. And when I ask anybody right off the street, any group. “Hey, what’s your wintering cost?”

Silence … Yeah, that’s what I get. Right? Well, you don’t know. You don’t know!

If somebody asked me, I can say it’s $2.65 per day per head. I can make a decision based on what I know. That’s just one example.

Steve Kenyon talks about enterprise analysis, as does everyone in Ranching for Profit. It is a financial game to make these tradeoffs. So, we just traded off trying to keep the cows where they are, have a manageable herd. Not how many I can graze, you know, but what’s the right size for an operation. And we’ve determined that it’s right size for us to have less cows to graze longer than it is to have more cows and graze less. It’s pretty standard on our farm. And then we get the benefit of having these plan vacations, these playing getaways on the weekends or, you know, weeks, or whatever, during the growing season.

What keep talking about is “What’s the point of money if you have no time?” Like, who gives a shit? And we’re not giving ourselves enough. We’re not giving ourselves a break enough. Where everyone’s telling us “Well, you need to look at the property” and yes, yes, you do!

But can we talk about the time part?

Your family loves you and they want your time.

We say, “I’m sorry, I gotta make hay, the cow calved or, there’s a million things.” And I just felt like it was time to talk about trying to plan for the time off, whatever that means, whether it’s a day here a day there, whatever rows your boat is fine. But for us in this realm of agriculture, we have to plan for fun, or we won’t have any. There is something that has stuck with me for many years. Somebody else said it: “If you don’t plan for fun, you’re not going to have any.”

Yeah! Because the animals don’t care. They’re happy where they are. If you’re happy not having somebody trying to move fences, making diagonals and whatever, fine. But I get a little bit cranky when I come home. I have a plan. And I like it to be stuck to. And then you’re like, “Oh, what is going on?!” [😱 screaming] I just as soon make a static paddock for three or four days. I have plenty of feed, and I waste the feed. But I get my grandchildren days where I’m not stressed out and I can focus on them and my wife and my kids.

So, to me that’s more profitable.

Thinking about it.

Expansion isn’t necessarily a bad thing if it fits with your vision and goals and creates the life you want. But you might also find that the size of your operation may be getting in the way of that. If you’re wondering if you’re on that path too, here are some things to consider.

Why are you doing what you do?

Validation, pride, and creating something of value are all potentially good reasons for doing something. It’s helpful to know what our motivations are.

Are you getting what you want?

Here’s a story from John Marble about finding out that maybe he wasn’t getting what he wanted:

The Sandford place was a nice little ranch right across the road from a rather large place where we ran a hundred custom cows. The fences were terrible, the water was difficult, and it would only run seven cow-calf pairs. But the price was right: free. One day I got a call that the water was out in the pasture, and of course I went right over to fix it. When I got home a few hours later, my wife asked what the problem was. I guess I should have been a bit suspicious since it was our anniversary. Next, she asked how many cows we had there. And then she asked the big question, the basis for decision-making in any business proposition.

“How much money do you actually make on that place?”

“Gosh, honey, I don’t know, maybe $500.”

“So, if I just gave you $500 could we please stop running cattle on that place?”

“Well, sure, I guess.”

My wife’s gentle point was that the cost of running cattle on a free ranch was simply too high, and that cost was time – as in, lost time. As in, the cost of an anniversary dinner with my spouse.

We quit running cattle on the Sandford place.

Is there money in it?

John’s story brings up an important point, and Troy talks about it too. You need to make money. And to know if you’re making money, you need to know what your costs are.

Troy talks about knowing his cost per head per day. He also talks about the actual value of soil fertility as a way of deciding on farming practices. His conclusion was there wasn’t enough value compared to the work involved. But each operation has its own goals and money and time goals. You may come to a different conclusion, but you need to at least have the data, and an awareness of how you’re achieving your goals and objectives.

John and Troy hope their experiences and willingness to talk about such personal things is helpful to your success. We’re sharing them here at On Pasture because we want you to have a happy, healthy life, and a grazing operation that gets you there.