How a Dryland Ranch in California Cut Herd Size in Half and Quadrupled Revenue

Challenge:
Thinning profits and market conditions forced us to look for a different business model to obtain a sustainable ranch.   My evaluations of the traditional program found cowherd turnover had increased due to poor cow conformation and structure. Conception rates had declined, and cows had a difficult time keeping finish through marginal fall and winter seasons, resulting in increased cost of inputs.  Finally, selling calves into the open market left our profit margin vulnerable to the whim of the market.  Cost of production and low herd retention had eaten up the bottom line of profit.

In 2001, David Foss, a highly experienced ranch manager from New Zealand joined our team. Working alongside David, we introduced Turihaua grass based genetics into the herd. The 100% grass-based genetics from New Zealand produced a deeper bodied cow, easier fleshing and structurally efficient animal.  Immediate results were evident in our first set of calves.  Embryo calves from New Zealand were noticeably different in stature, exhibiting smaller frames and 20% more muscle and beef.

A comparison of the weaning weights of  NZ and AAA calves favored the American Angus. However, yearling and finished weights—including retail product—convincingly favored the New Zealand genetics.

Results:
After only two years of using grass based genetics there was a noticeable imprint on the cows retained in the herd.  The operation changed to spring calving.  Outcross heifers matured into deep-bodied, moderate-framed cows with early fertility. They also kept their finish through the marginal times and pregnancy, and produced carbon copies of their beefy sires.  Full American Angus cows bred to grass-based genetic bulls had calves that improved substantially over their previous progeny by lowering frame score, adding bulk, and correcting weakness in structure.

Today, we have a completely sustainable cowherd and a new business model. We sell 18- to 24-month steers into our own grass-fed beef market, packaged for profit at $8 a pound.  The average cut-and-wrapped steer produces between 400-420 lbs. of beef.   We sell a beef steer to our local community for a gross profit of $3,200-$3,600 each.  90% of our beef sales are generated from our web site, and customers come to the ranch to pick up their orders and meet the rancher.  The building of face-to-face relationships with our community is a major part of our business model and meets the goals of providing food for our neighbors and keeping profits on our ranch.

Grass Fed Steer costs to profit                                                     

We sell 1/8 of a beef packages at 52.5 Lbs = $420.

Most cattlemen balk at the idea of retaining steers.  We have found, once they put a pencil to the plan, they see that they can run half the cowherd and increase revenues four times.  Increased profit in beef sales with improvements in the cowherd sustainability makes this a serious business model.

With lineage stretching back over 100 years, Fair Oaks Ranch genetics are undiluted and not found on the hoof anywhere else in North America.  Seeing is believing. Our genetics produce consistently functional cattle. We invite you to visit our ranch and see our program firsthand.

Our grass-based genetic bulls are the turning point to profitability. We offer individual sire straw packages, multiple packages of sires and 100% New Zealand bulls with a 3-year guarantee for soundness and fertility.  Volume discounts and semen for all programs are available.