Range Professional Says Manage
For Risk First, Supply Later

By Colleen Schreiber

ABILENE — Those in the range profession need to help ranchers manage risk rather than supply. That was the gist of remarks made by New Mexico State University range scientist Dr. Jerry Holechek at the recent Texas Section Society for Range Management annual meeting here.

"In my opinion, the range profession has been too oriented toward promoting supply and not enough toward focusing on ways ranchers can manage risk," Holechek told the group.

"I found that it’s wrong to start with the soil and the livestock. Start with the money and work your way down, and then you’ll get their attention.

"In my view," he continued, "ranching is much more of a process than a goal, more of a journey than a destination. I say this because there’s so darn much risk involved in this business. I’m in firm agreement with Will Rogers, who said that people should be more concerned with the return of their money than the return on their money."

Holechek discussed the four basic risks in ranching, the greatest of which is climatic risk.

"New Mexico ranchers who became overconfident after a long run of good years really paid the piper in 1995 and 1996," he said.

Holechek said he is convinced that the so-called "greenhouse effect" will cause a slight warming over the next several years, but added that in his opinion, that’s not all necessarily bad.

"We’ve had 20 percent above-average rainfall over the last 20 years," he explained, "and climatologists say there’s a 50 to 60 percent chance that we are going to become wetter still. They also say we’re going to become more volatile."

Holechek said he’s unsure how the climatic cycles of the past will relate to the future, but the future will no doubt be filled with climatic uncertainty.

"I would just say be careful."

Financial or market risk is also often directly linked to climatic risk. More times than not, he reminded listeners, drouth and low cattle prices go hand in hand.

He also noted that just because a rancher has heavily capitalized his ranch in terms of putting in waterings and fencing doesn’t necessarily mean he’s a good manager of the range.

There are also very real political risks as well. Holechek said he is encouraged by the reduction in taxes that came about during the last legislative session. He also voiced approval of government getting out of the business of subsidizing agriculture.

As for biological risk, he said, one of the greatest problems is the uncertainty of range management practices.

"Lots of times, when ranchers talk to the experts they think the certainty level is much greater than it is. There are so many things that can go wrong, and part of it just relates to climatic risk."

The New Mexico researcher said he doesn’t recommend borrowing money to do range improvements.

"I’m not against aggressive range improvement practices," he explained, "but I think they have to be carefully thought out and done strategically. There are instances where brush control can greatly enhance the efficiency of the ranch, but I’ve also seen instances of brush control that involved very high risk and very low reward. Mesquite control is very much that way in New Mexico."

Most of Holechek’s comments focused on the biological risk associated with various grazing practices.

Research throughout the southwestern U.S., he contended, indicates that stocking rate has far more effect than any other variable on what happens with the range resource, financial returns, wildlife and livestock production.

"It’s a much bigger factor than what grazing system is used," Holechek insisted. "Any grazing management system can be made to work if the rancher is committed to the strategy and he doesn’t overstock.

"The bottom line is that a blade left is not a blade wasted. If you deplete the residue, you don’t get water into the soil and therefore you don’t grow as much grass and it doesn’t matter which system you use. If you take it all, or take too much, you’re not going to grow as much feed."

Holechek said research shows that a continuous grazing system works well in flat country that is conservatively stocked. In fact, he said, in the Chihuahuan desert it’s been the best system.

Research gathered from the college experimental ranch in New Mexico, which has operated under a moderately stocked continuous grazing system since 1968, produced better vegetation and livestock performance than the best pasture system on surrounding ranches, he reported. Another study done in Arizona showed the same thing.

Holechek noted an ongoing debate which suggests that higher stocking rates might be more advantageous to a rotational scheme as opposed to a continuous system.

"My view is that a conservative stocking rate under a continuous system is one strategy. It can be made to work very well in flat country, particularly if you fence off the watering points and use access to watering points as a tool to control degradation around the sacrifice areas."

In another experiment, Holechek studied three different grazing strategies at a ranch at Fort Stanton, where the average rainfall is somewhat higher, 14 inches, than around Las Cruces. The systems studied were heavy continuous, moderate continuous and the "best pasture" system. Research was carried out under different climatic cycles and cattle cycles.

In this study moderate continuous grazing gave the highest returns over a 10-year period, but when carried out over a 20-year period, the "best pasture" system began to look good.

"The problem with the first 10 years is that you have to pay for the fence and the extra livestock," Holechek explained. "By the second 10 years you no longer sustain that cost. From this I concluded that if you’re looking at a long-term investment horizon, I think this ‘best pasture’ system has a lot going for it."

In areas where annual precipitation ranges from 18 to 25 inches, rotation systems prove to be beneficial, particularly on bluestem ranges, he noted. Rotation in these situations is important in maintaining such species.

At the Texas A&M experimental ranch at Throckmorton, Holechek said, researchers found that the Merrill four-pasture, three-herd system gave the highest economic returns with the lowest risk over an extended period of time and resulted in an upward trend in range condition.

"I am convinced that if I were a rancher in the Throckmorton area, I would try to use that system and emulate that strategy," Holechek said.

Researchers at the Sonora Experiment Station also found the Merrill four-pasture system proved best, providing the highest returns with the lowest risk.

"The Merrill system seems to be well suited for common use grazing," Holechek told listeners.

In the coastal prairie country, Holechek said the best strategy, in his opinion, is a continuous system run at a fairly conservative rate or a rotational scheme if bluestem grasses are predominant.

As for far West Texas, he recommended a continuous or "best pasture" system at a conservative stocking rate.

The researcher noted, however, that any one study in one particular period can be somewhat misleading. He admitted that there are always exceptions, and it’s those exceptions that often confuse ranchers.

"We need to track these studies over long time periods and across locations," he said.

Dr. Richard Teague with the Texas Agricultural Experiment Station at Vernon is doing just that in partnership with the Waggoner Ranch.

Range professionals, Teague said, have not done a very good job of making results from experiments applicable to ranchers. Nor have they done a good job of relating the scale of research to the scale on which ranchers operate.

"We tend to dismember things and deal with things as individuals. A rancher needs to understand how certain things are going to affect his operation as a whole," he said.

"In management you can’t just deal with one problem," Teague continued. "Lots of times we simply focus on brush problems, but we have to understand how that brush infestation affects the whole operation from the vegetation composition to the water.

"We have to look at these systems the way a rancher would need to solve the problem," he continued. "We all know that ranchers must make sufficient profit to stay on the land, but society is putting increasing pressure on them. That means we not only have to change the ranching business, but we also have to change as researchers and Extension as well."

He told the group of range professionals that researchers and ranchers alike must consider the cost of doing things, but also the cost of not doing things.

Holechek noted that making a living today in ranching has become increasingly difficult. "Real cattle prices are in a downward trend adjusted for inflation, and ranching costs have been going up since about 1973. The bottom line is that ranchers have been in a profit crunch for some time."

Though some ranches in New Mexico average a 20 percent return, he said, the average return is two percent.

As in many places, the importance of income from wildlife continues to grow for New Mexico ranchers. Holechek said he knows of one 18,000 acre ranch that will net $140,000 from elk. "Our ranchers are becoming less interested in cattle and livestock and more interested in recreation and wildlife."

He reiterated the point, however, that the condition of the country, particularly desert country, has a huge impact on returns from the land.

Other speakers echoed Holechek’s sentiments about focusing on the bottom line first and foremost.

Noble Foundation economist Dr. Mark Skiles agreed.

"I had an older gentleman tell me, ‘Son we’ve got to survive this industry before we can save it.’ We need to remember that as professional range people. When we go to a producer and suggest what he do or not do, we should first look at how it will affect his bottom line."

Range nutritionist and feed dealer Kent Mills agreed.

"Survival of the business is paramount to the rancher," Mills told the group. "If what you tell them means that they can’t stay on through a drouth, you haven’t helped them a lot. Or if they’re in a drouth, and you tell them they can only run 100 cows but they need 150 to pay the bills, your advice doesn’t help them. You have to help them figure out how to run 150 cows to pay the bills."

Mills echoed previous speakers’ sentiments that information often isn’t relayed to ranchers because of the bureaucratic system and all the paperwork that goes with it.

Range professionals giving advice to ranchers, Mills said, must first keep the rancher’s goals in mind.

"Get to know your client. That is a critical part of helping them. You have to understand what they need first," he reiterated.

Holechek told listeners that he believes the greatest challenge of the 21st century will be to sustain ranching as a way of life and to sustain open space. The two, he noted, are interconnected.