Tuesday, September 02, 2014

Managing Drought Risk on the Ranch

Southern Colorado - Welch Ranch

Ranch Locations

Colorado operation (family business) – Southern Colorado, with leased lands in Montana, Kansas, Texas

Operations

Colorado – cow/calf

KS – cow/calf

MT – cow/calf and yearlings


Inventory

  • Native range, multiple locations

Critical Dates

  • Makes decisions when moving through rotation, based on forage availability

Monitoring

  • Monitors rainfall and forage production

Before Drought

Rotational Grazing System and Stockpiling Forage

"The grazing rotation system is a great help to get through dry periods. ...It stockpiles grass ahead of you. It's really signficant in fairly arid climates."  

"Stockpiling grass doesn’t have as much benefit further east in higher rainfall areas because that grass loses so much nutritional value when it cures. And so what you get is a bunch of straw ahead of you that doesn’t do you much good."

"In southeast Colorado, we get about 13 inches of precipitation a year. And that grass tends to cure strong.  It's grama grass, some buffalo and some western wheat, the sort of grasses that don’t get so high in cellulose and that tend to retain protein. So if I can stockpile grass out ahead of my grazing herd, then I can use it later on." 

"The other advantage is, I think you tend to grow a greater volume of grass, especially a greater volume of the more desirable grasses. So not only do you have it stockpiled out ahead of you but you’ve got a greater volume of feed."

RMA rainfall insurance


During Drought

"We've got planned destocking. What I’ve found with the rotational grazing is you’ve got feedstock piled out ahead of you, and you can pretty well calculate, we’ll be in here roughly this long, here roughly this long. So you know that if you’ve gone all the way around [the rotation] and it hasn’t rained and there’s been no regrowth, you’ve used up that stockpile. So then you’ve got to destock.  You’ve either got to do that or buy feed and haul it in. And I think everybody’s shown that [buying feed is] not economically feasible. So what we did is said ok, what do we sell, how do we plan our market."

Planned DeStocking

  1. Stocker cattle. 
    • If you’ve got a combination of stocker and cow-calf operation, those stockers are your buffer group that is easy to either move or sell and not have to disturb your core cow herd.
  2. Old cows
    • Selling or relocating the old cows
  3. Bred heifers
    • That seems terrible to do because that’s the future of your herd, but they are the most difficult to get rebred after they calve. They have to have the most nutrition in order to rebreed for their second calf, of anything that you own, so although you hate to give up on them, that was the [next] group [to desctock]. 
  4. Yearling replacement heifers 
    • Then you’re into your young age cows and you start having to cull them. This is assuming you’ve taken out any unproductive cows or anything like that. Then you’ve got to start in on your youngest. 

Lease ground in less dry areas

"...we began to find places, lease country, for the rest of them. … when I ran my cash flows, I projected having to give more for those cows to replace them, and as a result, I was more inclined to hang onto the cows that I had. Once I got into the heart of the cow herd. Now the old cows or something like that, I think selling them made more sense. But that real core part of the cow herd, I felt like I could justify keeping them longer."


After Drought

Grazing System and Timely Destocking help after drought

"With rotational grazing, I think the grass comes back faster because ... you haven’t just stayed on there and hammered that same plant over and over again. You rotate around. And you rest them longer. So to me the root system is more healthy. It can respond faster, come back quicker." 

"Destocking fairly quickly also helps after drought.  I think that our country came back faster than the guy that just hunkered down, kept his cows there, went to feeding, went to caking, because it really did degrade the range conditions enough that it took longer to come back than [the] country that you got off of right away."

Financial Matters

Be careful of liquidating assets and living off of the income

"If you liquidate and live off of that money that you brought in, then you don’t have the money to replace."

Consider off-ranch employment if necessary


Lessons Learned

"You know, I can remember when some of this real intense grazing came out, the advertisement said drought proof your ranch. Well, in 2002 there on that ranch for that 12 month period we had 3.8 inches of rain total, of precipitation of any kind. And I can tell you this, you cannot drought proof a ranch. You can help and you can delay the effects and you can minimize them, but you can’t drought proof your ranch."


Recommendations

Don't assume precipitation will immediately make grass

"[It's] important to remember is it doesn’t rain grass. It rains water, and that grows grass, but not immediately. So you can’t say, whoa we got a half inch last night, we can quit moving cattle. It’s got to be something substantial that you know will grow some grass. Because even in that driest year, you know, we got 3.8 inches of rain. So there were times when it rained. And if you just say ok I got a half inch I’m going to quit [destocking] now, well then you’re kind of fooling yourself."

Consider a rest rotation grazing system

"I’m a believer in some sort of rest rotation grazing system. I think it increases the vigor of the plants and it makes them respond quicker when we do get rain. So I think the first thing I would do, I would look at my operation and say, does it lend itself to going to some kind of rotational grazing like that."

"And you’ve got to think about the infrastructure, you’ve got to think about the cost of fences, the cost of water development. We couldn’t have done it without NRCS."

Make a destocking plan ahead of time and write it down

"My second [recommendation] would be to set down to make a list of here’s how we’d destock when it’s necessary. And everybody always says you never make a good decision in a drought and you never make a bad one when it’s raining, and that’s pretty much right. But you’ve got to start."

"[A plan helps] to remove the emotional side of it. It's like the general has a battle plan before he goes into battle. You can’t just make it up as you go because the shells are falling all around you. So you’ve got to have something like that to take the emotion out of it, and say, "Ok I’m going to ship these 50 head of old cows." Now if it rains the day after I ship them, that’s great because I’ll have more [forage] left. But I’ve got to go ahead and on the 15th of June, ship this many cows."

"I think it’s real important to have that discipline, and writing it out is probably as good a way as any to get that discipline."

Make decisions based on current conditions

"You don't know when you're going into a drought. Is this just a dry spell? Is it going to rain next week? Is it not going to rain for another five years? There's no such thing as knowing you’re going into a drought. And so what you’ve got to do is say, "For my present, current conditions, how do I need to adjust my stocking rate. This is no longer a ranch that will carry 1,000 cows because it doesn’t have the grass, so I’ve got to cut down to 800." I think it’s important to not try to say, "Am I going into a drought or am I coming out of a drought or is this the end of a drought." You’ve got to say, "What are my current conditions, and with the amount of grass I’ve got, what can I run?" And I think that’s a mindset that’s important, because like I say, every time you get a little shower during a drought, that gives you false hope if you’re not careful."

Colorado Drought Plan Examples

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