We Made The Front Page Of The Stockman Grassfarmer!"
New Venture Builds Landowner Loyalty
Beginning in 2007 we have added a new venture to our grazing operation on our leased land. I had been thinking over the years of how we could build more landowner loyalty and interest into our grazing operation. We have 10 farms, 7 of those are leased farms that are mostly owned by absentee landowners. 70% of our grazing operation is owned by absentee landowners. These folks may only see their farms once or twice a year. I firmly believe that the sustainability and longevity of our land leases is tied to keeping our landowners interest in their farm at the highest possible level.
Our new business venture is offering our landowners an opportunity in cattle ownership. I would never attempt this venture if our operation was not centered on grazing 365 days a year. We bought the first set of bred cows this summer for one of our landowners. We are grazing the landowners cows with our own herd in one mob. The landowner cows have their owners name on the ear tag. This clearly identifies their cattle from a distance, which is very important. The calves out of their cows have the landowners name on their ear tag as well. Whenever the landowner comes out, he can visually identify his own stock grazing with ours on his farm. The landowners can bring their friends out and show off their cow herd and their calf crop. They can also claim that they are officially cattle ranchers.
When we first offered this opportunity to our first landowner, he was extremely excited about owning his own cows. All of a sudden this landowner was very interested in our mob grazing system. I spent several hours with him one night walking the various paddocks showing him the differences that we were starting to see on his farm with the increased animal density. At the end of the evening he was very excited about building more topsoil each year, more grass, tremendous diversity with no purchased inputs. The High Density Planned Grazing is doing all of these things for free.
Whenever we talk now, he always will ask how the cattle are doing. He has a vested interest in the herd. It is not the Judy herd anymore, it is “OUR” herd! Not only are we going to let them graze their cows with ours, we are going to allow them to build their herd along with ours. This will be done by selecting the best grass genetic heifers from their cows to enter the breeding herd. We have 100% control over all management decisions of the cowherd including the landowners cows.
We also are marketing their calves along with ours. By marketing their calves along with our larger group of calves, the landowner will receive a better selling price. Larger groups sell better than small groups. If you have 5 head to sell, you do not have as much marketing power. By combining the landowners smaller group of calves with our large group it helps both of us. It makes our group even larger and the landowner has a better marketing window for his smaller group by combining them with ours.
This will allow us to have excellent grass genetic cows included in our herd along with good grass genetic calves to market along with ours as well. The landowner pays us $.50 per day per cow for the entire year. This covers our labor & mineral costs along with a custom grazing discount for being our landowner. We normally get 70-90 cents per day for custom grazing dry cows. We are not charging the landowner anything for what his calf grazes, which gives them another discount as well. We charge them $25 per cow for bull service, 1 purchased large round bale per cow for the winter, $30 hay for the entire winter.
We strip graze the entire winter, so very little hay is fed during the dormant season. The only time we feed hay is when the ice layer on the ground is too thick for the cattle to dig through. For the entire year the landowner has $238 invested per cow. We are keeping a lot of our calves and selling them at 7 weights to grass finishers. Last year we sold our long yearlings for $1.00/lb. If you took the average weight of 700 lbs, this would give the landowner a $700 gross return per cow. Subtract $238 (cost per cow per year) from $700 gross calf sale and that leaves $462 net profit per cow. This gives the landowner a very respectable return on his investment.
Several people have questioned why we are offering this new venture to our landowners. The reason was that once we made the decision to go to one mob of cattle with Holistic High Density Planned Grazing it simplified our entire grazing operation. We are growing more grass each year than the previous year and we need more cattle to eat all the grass. Having all this extra grass got me to thinking about offering our landowners cattle ownership. After all, if it was not for our wonderful landowners, we would not have been able to grow our operation as quickly as we have without any debt. They are a very important part of our grazing operation and we feel they should be rewarded with the cattle ownership opportunity. We could have easily brought in more custom grazed cattle to graze the extra grass or purchased more cows ourselves. We feel like we are getting a better return on our extra grass by focusing on building landowner interest.
We may be giving up some income, but we are building sustainability into our grazing operation. By having the absentee landowner participate in ownership of cattle, that keeps them more involved with their farm. Their cattle are in our herd, which are grazing on their farm with no labor required by them. I think it will also help us by keeping long leases on their farms. If they terminate our land lease contract, they are out of the cattle business because they do not have anybody to take care of their cows. They do not want the task of the daily care of their cattle. However they extremely enjoy being able to come out on pretty sunny days and walking or driving their ATV through the herd observing their cattle.
We have one absentee landowner’s son that we offered the cattle ownership option to as well. He is single, just out of college and making a nice salary while living in a large city. He is very excited about becoming a cattle owner as well. We are going to start him out with five weaned heifers and let him grow his herd with us as well. By getting the landowners son involved in the farm, I believe this is a good thing that will pay dividends for years to come.
Again, by getting the landowners son more involved in his parents farm by way of cattle ownership, this I believe is a good thing. If you can get the landowners kids involved, this is building long term sustainability as well. After all, he is the one that may inherit the farm. This kid has never had access to the idea of owning livestock in his whole life. Now he will get emailed pictures every so often sent to him by us, showing the progress of his heifers. Kind of a neat thing to look forward to if you are living in a large city and building a herd of cows in another state at the same time. The bottom line is that we are much better off building landowner interest and friendships which leads us to a sustainable grazing operation for our future as well. The best part is that it is fun and rewarding to see other people happy with what you are doing on their farm.