So Elin, What Do You Do All Winter?
Posted By cowgirlblog on March 16, 2011
When I explain to folks who want to know… that Music Meadows Ranch is a summer-time operation… that I purchase cattle each winter & spring to stock the pastures then sell them in the fall, they invariably ask, “So what do you do all winter?”
One of the things I do is purchase the cattle. This requires time, thought and effort. If moisture conditions are normal to good, I purchase about 1,000 head of yearlings for Parker Ranch at Arriba, CO and 700 head for Music Meadows. I have “put together” small groups of cattle from 10 or so on up to make a truck load (about 100) at a sale or sometimes purchase hundreds in one deal off one ranch. I like to spread out the purchase’s of different bunches from about December through April in order to do some price averaging since the market can be up and down during that time. I also don’t want all of the cattle to have a lot of “pre-grass” days which is winter-time care and feed in some suitable place that is not at either of our ranches. It costs about $1.20 per head per day which may not seem like much to you but do the math… $1.20 x 1,000 head x 100 days and it ties up alot of capital in a hurry. The calves just gain a pound per day which is worth a little more this year than $1.20 so it is just a wash. I don’t want them to gain more than that because they need to just grow and be “green” (healthy but not fat) at turn out time so they will gain the majority of the weight on the cheap summer grass.
The benefit mainly is that typically the calves bought in December are cheaper than the calves bought in April. The other reason to do it is to get the calves that are good quality and good performers whenever they are available… hopefully calves we have owned before and know they are healthy, easy to handle and grow well. Later in the spring the competition increases for these good calves or they are gone.
I find these calves a variety of ways. I go to the sale barns in La Junta which involves driving 2 1/2 hours one way, walking through all the pens to evaluate the calves and write down the ones I’m interested in, sitting to watch the sale for hours, and being prepared to bid on and purchase the calves I want. Being prepared means: having homework done before hand such as making arrangements for the calves to be recieved by a cowboy who has the facilities and the know-how to care for them till summer; studying the current market and plugging in the projected costs, gains and sell price into a spread sheet to determine how much I can pay and still hope to make a profit; being mentally prepared to do all that and still go home without a purchase if the price seems too high or the quality of cattle is lacking; knowing the futures market and whether hedging is an option for me to protect the purchase I make. Then, if I buy cattle…I make arrangements with a local trucker to haul them to their new home and stay until the calves are loaded and on their way, usually late at night. Then I drive 2 1/2 hours back home. Next morning I call the cowboy who recieved them to hear how they made it in and how they are doing. Then I call my broker to discuss the possibility of placing a futures hedge on the cattle to insure a profit and protect against a loss and either take action or not. From there it is a matter of going to look at the calves about once a month and check in with the cowboy every week by phone; pay for feed and care; and pray for snow for the summer grass.
The source of the calves can also be direct sale via private treaty from the rancher who raised them using a commission cattle buyer to help make the deal,write the contract, broker the payment and to deliver the calves. I find out about these deals by being in contact with the order buyer and letting them know what I am looking for. Not all order buyers are created equal. Some of them understand what I want and communicate accurately what the cattle are. For these I do not have to travel to see the calves myself… if it is a great distance I don’t. But other order buyers do not see cattle the way I do so I either don’t do business with them or I always go look myself to see if I want the cattle or not.
Another variation of the direct sale is the Video Auction. It all works the same way except I have to bid on the cattle over the internet or the telephone but I have to either trust the auction rep or have gone to see the cattle in advance. Both of these venues are better than the sale barn because it is less stressful to the calves since they are only loaded on a truck once and then off loaded at their new home. At a sale barn that is doubled plus they are exposed to bacteria and virus from other cattle that come through the sale barn. All this increases the risk of the calves gettiing sick which is very costly if it happens.
This stage of the game is the most important in the yearling business because decisions made set the stage for profit potential for an entire year… or not.
Next blog I’ll share with you what the sources are for for our Naturally Raised Grass Fed Beef which you can purchase directly from V Bar Beef. It is an entirely different operation at Music Meadows but the most exciting and rewarding to me!
Happy Trails
This is the time of year when you can count on the weather changing dramatically from one day to the next or even from morning to evening! It is the time of year when I am liable to misplace a coat because it is utterly necessary one minute and intolerable the next! April saw abnormally high temps which caused a rapid snow melt and flooding all over the Valley. County roads washed out, my driveway washed out, water just flooded off the prairie. Then came the wind…then another foot of wet snow…now more wind. But the grass is beginning to green up and the promise of summer is in the air.