A Nebraska producer shares how he's adapting to a high-cost environment
With escalating costs facing all segments of the beef industry, trimming costs is on everyone's mind. But Nebraskan Jay Wolf of Wagonhammer Cattle Co. isn't just thinking about cutting costs, he's taking action.
Wolf, a former Denver banker, now manages the family cattle business. It includes a 5,400-head feedyard near Albion, NE, and a ranch in the Sandhills near Bartlett, NE, with a 200-cow purebred Angus herd, as well as a herd of club calf and commercial cattle. He also knows the industry well, as he's a past president of the Nebraska Cattlemen and serves on the board of the National Cattlemen's Beef Association.
Wolf expects that high costs will be part of the industry for the foreseeable future. As a result, he believes producers need to be “willing to change.”
Staying attuned to university research, as well as visiting with neighbors and other producers, Wolf says producers need to rethink traditional management practices as they seek potential savings.
For instance, he points to altering calving dates to best match available forage resources; grazing more vs. using harvested feeds; and optimizing roughage gains in cattle before finishing on grain diets.
Here's a sampling of what Wagon-hammer is doing to help curb costs:
- Natural breeding
This spring, they discontinued artificial insemination (AI) of commercial heifers in order to get them out on grass sooner. They'll continue to AI registered heifers to enhance genetic progress in their herd, exposing commercial females to bulls only.
- Calving season
Wagonhammer is moving toward a later calving season for the commercial herd to better utilize their forages and lessen feed needs. They turned bulls out July 1 this year to move their calving season to April. The management and calving time of their registered herd will remain unchanged so as not to impact their annual production sale.
With later breeding and calving, Wolf says he's less concerned about body condition scores of his commercial cows going into winter. “We don't feel the need to have quite as much condition on the cows as we used to. This winter we will target a 4.5 condition score rather than a 5,” he says.
- Fenceline wean
Traditional September weaning will continue but Wolf plans more fenceline weaning to keep calves in a roughage environment longer.
- Retain ownership
Wolf will retain most of his commercial calves over winter and run them as yearlings for more roughage-based gain and less grain feeding.
- Lower breeding weights
Holding heifer weights down going into their first breeding will ultimately help them become smaller framed, more efficient cows for his herd, he says.
Wolf is altering his rations based on price and availability of feedstuffs to combat higher feed prices. “We change diets all the time.… We utilize a lot of byproducts and we use a nutritionist to aid with ration formulations. Because it's always changing, it's constant chaos, but there are price opportunities with that, too,” he says.
Higher phosphate prices prompted Wolf to change his mineral program to use less phosphate and keep costs down.
- Health insurance
Wolf increased his health-insurance deductible to lower the premium; he's also increased contributions to his health savings account.
As his ranch and feedlot tractors, pickups and four-wheelers wear out, Wolf buys better fuel-economy equipment.
- Forward contracts
Using the volatility in futures markets can offer the opportunity to lock in prices to fix costs and allow for profits, Wolf says. He's using this strategy to lock in costs on distillers grains, diesel and propane.
Finally, while Wolf believes reducing costs is important, that's not the only goal. While producers must be cognizant of minimizing costs, they can't overlook instances where increasing costs — such as with health programs and genetics — can ultimately increase revenue more.
“Increasing net income is the ultimate goal,” Wolf concludes.
Kindra Gordon is a freelancer based in Whitewood, SD.