Drought, wildfires and high feed prices have forced many cattle producers across the nation to evaluate their operating systems as they struggle to survive these weather-induced lean years. Trey Patterson, chief operations officer of the Padlock Ranch, says he’s among those concerned about the risks currently facing the cattle industry, but he’s optimistic and sees tremendous opportunities ahead for cattle producers. The key is being prepared.

Appearing before attendees of the recent 9th Annual Cattlemen’s Workshop in La Grande, OR, Patterson began by saying: “We’re as dry as everyone else around us north of Sheridan, WY, but we have the ability built into our production plan to deal with this situation.”

The 70-year-old Padlock Ranch sprawls across nearly 500,000 acres in Wyoming and Montana. After losing 80,000 acres of rangeland to wildfire last year, Patterson says the operation’s current overall goal is to get through the drought and hold the cowherd together. “The weather threats are a very real risk, but we aren’t anxious to liquidate a lot of cows.”

During his presentation, Patterson outlined some of programs and steps the operation has taken to position itself against the challenges ahead, as well as for the coming opportunities.

Part of Padlock’s plan involves utilizing raised replacement heifers. Patterson says the cost of producing a bred heifer has risen almost $200/head in the last five years. Padlock works to develop as many of their heifers as possible on ranchland in order to keep costs as low as possible.

Trey Patterson, Padlock Ranch“Those costs,” Patterson says, “get capitalized, the expenses come off of the income statement onto the balance sheet, and the animal is depreciated over a period of time. Although it’s still a tremendous cost to the operation, buying replacements in the current market would be more expensive.”

When it does finally rain, Patterson says they don’t want to be in a position to have to replace cows in an economic environment where cows are expensive to purchase and calves are going to be worth quite a bit to sell. “The predictions are that there will be some profitability in the cow-calf sector; that’s the other reason to try to hold on to these cows,” he says.

Conversely, if rain doesn’t come for another year or two, the approach will prove to be costly, but they’ve built some flexibility into their operating plan. The Padlock’s terrain ranges from mountains with snow and pines, to sagebrush and rolling hills. The operation stresses a range-based, cow-feeding program – the goal is to not feed hay.

“We’ve changed our strategy in the last 10 years to where we’ve lowered the total number of cows we’re running to accomplish a 12-month grazing season with May calving,” Patterson says.

To keep the cows in shape during the winter months, they offer modest protein supplementation from January to April. And Patterson says later calving allows the cattle access to early-season feed that can help improve their condition. Of course, in dry years, Padlock may need to supplement during the fall; they also utilize crop residues.