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167: The Hidden Money Pits Draining Cattle Operations · CattleUSA Daily

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  Welcome to the Cattle USA Daily podcast, your go to source for
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  the latest livestock markets, industry insights and the update
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  shaping agriculture today. I'm your host, Lauren Moylan, a
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  passionate advocate for agriculture, here to keep you
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  informed and connected. Now let's dive into today's
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  episode. Welcome back to another episode
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  of the Cattle USA Daily podcast. Today we are calling out the top
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  five money pets that I see on a lot of cattle operations.
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  And not only are they seeing just on a lot of cattle
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  operations, there's a lot of research behind these money pets
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  as well from all of our extension offices, all of our
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  universities. So the goal here is simply to
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  plug leaks and find things that we can actually control.
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  We're going to hit on winter feed and hay waste.
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  We're going to hit on reproduction drag, equipment
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  creep, death, loss and health gaps, and just some silent
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  losses and marketing. For each of these, I'm going to
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  give you a quick why it leaks and then the telltale signs that
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  it's happening. And two fixes that you can start
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  right now. Let's dive right in #1 we have
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  winter feed and hay waste. Feed is usually your biggest
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  expense and winter simply just magnifies it.
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  If hay disappears into mud, wind, and sloppy feeding, you
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  are literally lighting dollars on fire.
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  Exit data routinely shows feed cost can run north of half of
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  the total cost and Cal calf systems.
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  So every percentage points you can shave off moves the whole
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  profit and loss statement at the end of the day.
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  So some things to watch out for with this are simply our long
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  winter feeding periods, ring feeders without skirts and hay
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  made because we've always made hay and pastures that go dormant
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  early when they could have been stockpiled better. 2 short fixes
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  for you guys. Number one, shorten your hay
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  season where you can stockpile forage and graze deeper into
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  winter. Even one extra week of grazing
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  can reduce annual feed cost by about 1% per head.
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  That is massive. I understand fully that we
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  cannot always control when we have to start putting out hay,
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  but try and do it data backed and not just I think it's the
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  week that we need to start putting out hay.
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  Do it with data and science backing you on when you are
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  putting those numbers out. Number two, run the numbers on
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  that hay. Owning hay equipment looks cheap
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  until you include depreciation, interest, repairs and labor that
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  goes into all of it and many budgets.
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  Machinery is a huge chunk of hay cost.
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  Some herds come out ahead by stockpiling and just buying the
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  balance of what they need for hay to make up the difference.
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  If you can replace 30 hay days with stockpile grazing, that's
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  roughly about a 30% cut to your winter feed days and it shows up
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  directly in cash flow. Again, I get it.
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  It all depends on the rain that we've had, the weather,
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  everything else in between. But do it with data backed
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  science and not just off of gut feeling because each day truly
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  makes an impact. And make sure that you are
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  utilizing your hay well, that you're putting it out in a way
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  that makes the most sense for your herd and your operation.
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  And that is not wasting any hay at the end of the day.
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  Now #2 we are talking about reproduction.
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  Nothing eats profit like an open cow.
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  Reproduction is the top economic driver in a cow herd.
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  More bred cows, earlier calves and tighter seasons, rough
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  winters and thin cow cascades into poor colostrum, weaker
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  calves and lower pregnancy rates the next turn around.
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  So what do you need to be watching for?
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  Slips and pregnancy rates? Too many late calvers?
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  Cows with body condition scores at 4:00 or lower going into
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  calving and no hard date to call opens. 2 fixes that you guys can
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  do for this? Use pregnancy testing to
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  identify opens and late breeders to tighten that season as much
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  as possible. Track with SPA style metrics so
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  that you can see trend lines and you're not just guessing as time
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  goes through with your breeding season.
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  The next one is to feed a target body condition score by calving.
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  So make sure that you have that target BCS and that you are
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  hitting that every single winter, every single spring to
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  make sure that by the time calving comes around, your cows
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  are where they need to be #3 let's talk equipment, tractors,
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  balers, extra toys in the yard. It is easy to wake up honestly
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  some days and just see a yard full of payments, even if the
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  hours on them are low. Remember here fixed cost do not
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  care about calf prices. A simple back of napkin rule is
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  that many pieces effectively depreciate around 10% of the
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  purchase price per year before fuel and before repairs.
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  So you need to be watching out for low annual hours on big
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  equipment, multiple machines that can do the same job, and
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  hay equipment that runs two days out of the entire year.
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  So some fixes that you can make for this right size or outsource
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  custom work or sharing equipment can slash ownership cost without
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  killing timelines that we need to maintain as cattle producers
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  #2 potential fix that you can make is bundling that hay
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  decision with the equipment decision that we just talked
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  about as well. If machinery drives about 40% of
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  hay cost in some budgets, switching part of that hay to
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  purchased or grazing for longer or things like that can make a
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  big impact #4 our second to last one.
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  We're going to talk death, loss and health gaps.
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  Calf losses are brutal. They burn revenue and waste
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  every single dollar already sunken into that cow.
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  National snapshots show small herds are especially vulnerable.
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  It doesn't take a mathematician to figure that out that if you
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  lose 1 calf in A10 calf crop you just took 10% off of your weaned
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  numbers. Things like scours outbreaks,
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  spotty colostrum intake, inconsistent colostrum quality
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  from thin cows, and no written protocol and calving are all
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  things that we need to be watching out for and biting in
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  the butt as soon as humanly possible because there is
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  nothing worse than losing calves and not having calves to take to
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  market in a few months. Two fixes that you can have.
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  Protect the front end guys. You've got to manage your cows
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  to calve well, to have the right body condition score to set them
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  up for success and have a simple written colostrum slash newborn
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  protocol that you can give to anyone that is helping you with
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  your management during calving season.
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  The next thing is have a standardized health and weaning
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  thing that you are doing on your operation.
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  Preconditioning and clear protocols set you up to capture
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  value when you sell those cattle.
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  And #5 our last one that we are heading on today is Silent
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  Losses in marketing. We've touched on this a few
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  times with John on the podcast, but just to recap it a little
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  bit, the fact of the matter is you could raise a good calf and
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  still leave money on the table at the sale.
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  You have things like on uniform groups or poor timing, different
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  things like that, that all at the end of the day are going to
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  affect the amount that you are going to get on a dollar per
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  pound basis. So make sure that you are
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  talking to your sales reps, you're talking to your local
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  sale barns and that you are actually looking at those things
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  and making sure that you are not going through all of this work,
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  you have a great calf and then dropping the ball when it comes
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  to sale day. Again, John and I touched on
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  this a ton in our past episodes. So if you guys want to dive in
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  just like silent losses in marketing and potentially
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  leaving money at the table at the sale barn, go check those
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  out because we go into so much more detail there.
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  But some fixes that you guys can have is simply sell a story that
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  buyers can trust. Vaccination records, weaning
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  period protocols and source slash age consistency is
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  extremely important and calves that actually match that
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  paperwork. The next thing, lean in to the
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  people that you can trust at those sale barns.
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  Talk to your market auction owners and ask them when is the
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  best time for me to bring my cattle.
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  And that is simply the single best thing that you can do to
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  not leave money at the table at the cattle market.
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  So here is the five line audit that you can do this week.
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  We're looking at heydays versus grey days, grey days, Grey's
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  days. Check those out.
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  What are you doing? When are you doing it?
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  And use data backed decisions there #2 you've got your
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  pregnancy rate and calving distribution.
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  Look at it again, use data backed decision making here,
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  guys. Number three, you've got your
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  equipment. What are the hours on it?
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  Are you actually using it? Do you look out in your yard and
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  you just see a yard full of payments?
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  Maybe re evaluate that #4 calf health guys, get those protocols
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  in, make sure that you are setting yourself up for success
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  before those calves even hit the ground.
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  And then #5 you've got your sale plan again.
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  Talk to your local market, market auction owners and get in
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  the loop on what is best for you and your operation.
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  Pick the best week for you, build a uniform group and prep
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  well. The thing is guys is money pits
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  do not fix themselves, but they are usually visible once you
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  actually look for them. Trim winter feed waste, keep
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  cows bred and in the right body condition.
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  Score that you need them to be in for your operation, right
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  size your equipment ratio, protect your calves and sell the
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  kind of cattle that buyers are willing to pay for.
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  If you plug in two of the five that we talked about today, your
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  year is automatically going to change all 5.
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  You've just completely hit the reset button on your ranch.
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  Thank you guys so much for listening to another episode of
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  the Cattle USA Daily Podcast. I will see you all tomorrow on
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  another episode of the podcast. Thank you all so much for
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  listening. If you enjoyed today's episode,
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  make sure that you like subscribe rate and review.
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  We really appreciate it here at the team and we will see you all
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  later. Have a good one guys.