How does a ranch run?
Hank the Cowdog explains the economics of cows and grass
Although my wife and I have several times had the pleasure of spending a week at John and Kris Erickson’s ranch in the Texas panhandle, I have to admit my knowledge of ranching is slim. So I’ve learned from John’s “Hank the Cowdog’s Ranch Life Series,” and you and your children can learn as well. That’s why over the next year, with permission from John and two partnering groups, the Ranching Heritage Association and the National Ranching Heritage Center, we plan to publish 10 excerpts from the five books in the series.
The voice you’ll hear as you read along is Hank, the cowdog with high self-esteem who styles himself as Head of Ranch Security. The setting is a family ranch in the Texas panhandle, and the main characters—rancher Loper, his wife Sally May, dogs Hank and Drover—are familiar to readers of the 76 Hank books. —Marvin Olasky
It’s me again, Hank the Cowdog. So you want to know about ranching? Well, you came to the right place. I happen to be pretty muchly an expert on the subject and I probably know more about this ranch than anybody in the whole world, and we’re talking about humans, dogs, cats, whatever, but especially cats. For starters, it’s my home. It’s located in the tippy tip top of the Texas Panhandle. Most of our country is flat to rolling, although we’ve got some pretty deep canyons up north.
Oh, did I mention that I’m Head of Ranch Security? That’s correct, and it’s one of the most important jobs in the whole entire world, because if it weren’t for me … well, just think about it. There might not even be a ranch. It might have been carried off long ago by monsters and goblins, those same scary guys I bark at in the middle of the night. So there you are. Ranch headquarters covers four or five acres and that’s where you find the corrals (also called shipping pens), the machine shed, the chicken house, the feed barn, and the saddle shed. We park our stock trailers behind the machine shed and keep the horses in the horse pasture.
Here’s the first thing you ought to know about a ranch. It’s not the same as a farm. A farm is mostly cropland, see, which means that the land is plowed and planted to crops, such as wheat, barley, rye, corn, oats, alfalfa, soybeans, milo, sunflowers, and cotton. Watermelons are grown on farms and so are nuts, berries, fruit, and vegetables. So what do we grow on a ranch? Heh heh. You’ll never guess. Go ahead, try. No, that’s wrong. Nope. Wrong again. I told you you’d never guess.
We grow GRASS, the same grass that has been here for thousands of years, long before I came along. Our ranch is what you would call “short grass country,” probably because most of our grasses are short, and we’re talking about buffalo grass, blue gramma, wheat grass, and side oats gramma, with a smattering of Indian grass, little bluestem, and sand dropseed in the rougher country. Those are your typical prairie grasses.
Our grass is short but it’s got a lot of strength in it, and that’s a big deal if you happen to be a cow. See, cows make their living eating grass. Cows can survive on grass because they’ve got a special four-chambered stomach that can digest it. Have you ever seen a cow lying around in the afternoon, chewing on something? Well, she’s not chewing bubblegum. She’s chewing her cud, which means that she's working on some of the grass she ate during the morning.
If cows didn’t go through all 10 that business to digest grass, YOU WOULDN’T HAVE ANY HAMBURGERS TO EAT! That's right, pal. Beef comes from cattle, and cattle come from grass. I'll bet you’d never thought of that. When you trace it back, a hamburger is made of grass, puredee old grass. So the next time you see a cow chewing her cud, be glad she’s chewing the grass and you’re chewing a burger.
Now we know the difference between a ranch and a farm, don’t we? Now let’s talk about ranching as a business, because that’s what it is, after all. People like Loper and Sally May don’t go into ranching just for their health. Ranching is how they make their living. It’s how they make enough money to buy food for their table and clothes for their kids and, last but not least, dog food for me and Drover.
Okay, here’s how the ranching business works. The rancher (Loper) goes to the local bank and borrows enough money to buy, let’s say, 300 mother cows. In today’s market, they’d cost about $2,000 apiece, so his initial investment in livestock is going to be somewhere around $600,000. That’s a lot of money, but it’s only the beginning. If he doesn’t own any grassland, he has to rent land from someone else, and around here a grass lease might run anywhere from $3.00 to $6.00 per acre per year, and we figure it takes about twenty five acres of grass to feed a cow year round. We call that the stocking rate.
Have you figured up how many total acres Loper needs to run those 300 cows? (Hint: multiply cows times acres-per-cow). Did you get 7,500 acres? Good. So did I. 7,500 acres is about eleven square miles, and in our country that would be a nice, average-sized family ranch that will run 300 cows year-round. The point is that ranching is a business and it requires a big investment. Loper and Sally May have a lot of money tied up in land, livestock, and equipment, and that money doesn’t come from Santa Claus, the Easter Bunny, the Tooth Fairy, or the government. It either comes out of Sally May and Loper’s pockets, or else they have to borrow the money from the bank.
If they borrow the money, they have to pay yearly interest on it and eventually pay it back.
You know what happens if they don’t make a profit in this business and can’t pay back those loans at the bank? They’re broke. The bank will hire an auctioneer to sell the land, cattle, and equipment, and they’ll be out of the ranching business. Loper will be out on the street, looking for a job and some way to support his family and feed his kids. And his dogs. Don’t forget us dogs. Life without dog food would be pretty gloomy, and that’s why I'm interested in the business side of ranching.
The rancher has to make it on his own, and what makes it tough is that he can’t control some of the most important factors in his business: the weather and the price of cattle. We’ve seen that ranchers are in the business of raising grass that cattle eat and turn into beef. But what happens if the grass doesn’t grow? Grass depends on rainfall, and if we don’t get rain, the grass doesn’t grow. In our prairie country, we often have short dry spells when the grass turns brown and stops growing. Cracks form in the ground and we begin looking up at the clouds every afternoon, hoping for a rain.
Most of the time we get the rain, though it never seems to be enough and we always wish for more. But sometimes the rain doesn’t come. The dry spell goes on for weeks and months, and sometimes even for years. A prolonged dry spell is known as a drought or drouth, and that’s a bitter word in ranch country. A drought brings suffering and hardship for every animal and human on the ranch. The cows get thin because there's no grass to eat. The calves get thin because their mothers aren’t giving as much milk as they should.
During dry periods, Loper stays in a gloomy mood because he has to watch his livestock suffer, and every day he sees his poor land being thrashed by hot dry winds. Day and night, he’s worrying about how he’s going to pay his bills and feed his family. That makes it hard on his family, and also on his dogs. We dogs try to keep up a cheerful front, but the longer the dry spell, the harder it is to look happy about it. Let me tell you, fellers, a drought is no fun. There are other kinds of weather that can bite the rancher. Sometimes we get terrible hail storms that beat the grass down to the roots. Until the grass comes back, we have no grass and have to move the cattle to other pastures, or feed them store-bought feed.
Oh, and don’t forget those blizzards. In a normal snow storm, the flakes fall straight down, but here on the Great Plains, we often get powerful storms that can pack winds of forty or fifty miles an hour. That’s a blizzard, and what happens is, the snow piles up in big drifts that can bury fences, roads, everything. For days, or even weeks, we can’t drive the ranch roads or haul feed to the cattle, and sometimes they die of starvation.
Another weather-related event that can affect a ranch operation is lightning. During a dry spell, we sometimes get clouds that bunch up and promise rain, but instead of giving us the rain we need, they give us “dry lightning.” Fellers, when that dry lightning starts popping, you’ll find ranchers walking the floor, looking off toward the horizon, and sniffing the air for smoke—grass smoke. I guess you’ve figured out why. When lightning hits the ground, it can start a prairie fire, and every creature on this ranch is scared of prairie fires. If the wind happens to be howling at fifty miles an hour, that fire can fly across the prairie and nobody can stop it. It burns everything in its path: trees, brush, houses, barns, fences, and livestock. And grass. After a prairie fire, there’s nothing left for cattle to eat.
Another thing that makes ranching a risky business is that Loper has no control over the price he gets for his product. The price of cattle—the cattle market—is set by supply and demand. It’s really pretty simple. Every day in the United States, livestock buyers are in the process of buying cattle, and buying them as cheaply as they can. The price they pay is determined by the number of cattle that are for sale. When the number of cattle for sale is low, the price goes up. When there are plenty of cattle coming onto the market, the price goes down. That’s the way a simple supply and demand market functions. Low supply = high price, and high supply = low price.
Diamonds are more expensive than rocks, because the world has a whole lot more rocks than diamonds. But Loper has a problem the diamond merchant doesn’t have. Cattle eat, diamonds don’t. In the fall of the year, when our grass stops growing and loses its food value, Loper wants to sell his calf crop and make some money to support his family for the rest of the year. If the cattle market is low, he doesn’t have to sell the calves, but if he doesn’t sell them, he will have to hold them through the winter and buy feed for them.
Instead of creating income for the family, he’s creating more expense and bigger feed bills.
If he holds them through the winter and sells in the spring, the market might be even lower than it was in the fall. If that happens, he might never recover the cost of his labor or the money he’s invested in feed and hay. If the market’s down, all the year’s work you put into those cattle might bring you zero profit. Or they might even lose money. That can be pretty discouraging, working hard all year and then getting nothing for your effort.
Okay, enough about livestock economics. It gives me a headache. There are two types of cattle in this world: beef cattle and dairy cattle. Beef cattle are raised for the meat they produce, while dairy cattle are raised primarily for their milk. We won't spend much time on dairy cattle, because that's not what we have on this outfit. There are many different breeds of beef cattle: Herefords, Angus, Brahmans, Brangus, Beefmasters, Longhorns, Santa Gertrudis, and on and on. They come in different sizes and colors, but what they all have in common is that their body shape, or conformation, is better suited to producing meat than milk.
All cattle breeds have certain things in common, but each breed also has certain qualities that make it unique. The cattle that were here in Texas when the first settlers arrived in the 1830s were called Longhorns. These animals had been brought to the New World by Spanish colonists, but some of them escaped and lived in the wild. After the American Civil War, cowboys gathered millions of these wild cattle and drove them in big herds to railroad towns in Kansas and Nebraska. This was the Trail Driving Period, and for about fifteen years, from 1865 to 1880, those Longhorn cattle provided beef for the growing cities on the eastern seaboard.
In the 1880s the cattle industry went through a major change. Settlers moved into the Great Plains region, a vast sea of prairie grass that stretched all the way from Central Texas up into Canada. They brought cattle with them and created ranches, plots of grazing land that were owned by individuals and set apart with fences. Many of the ranches that were established at that time are still operated today by members of the same families. Ranch people and cattle share the same piece of land. They live together every day of the year and they have to figure out how to get along with each other.
It’s a bit like belonging to a big family. If the family members fight all the time, that’s not good. Cattle and people have to adapt to each other, and most of the responsibility falls on the people. Any time cattle are sorted and worked in the corrals, the rancher tries to handle them in the easiest, gentlest way, knowing that in the long run, it works out better for both livestock and humans. The secret to handling livestock is to figure out what the cattle want to do and, when possible, adapt to their habit and quirks.
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