KRIRM 2023 Fall Newsletter

From the Director

Dr. Clay P. Mathis Director & Robert J. Kleberg, Jr. & Helen C. Kleberg Endowed Chair

Reflection, Growth and a Heartfelt Goodbye After Thirteen Years Leading KRIRM

In 2010, I joined the King Ranch® Institute for Ranch Management (KRIRM) as Director and Robert J. Kleberg, Jr., and Helen C. Kleberg Endowed Chair. I have had a wonderful time working with an amazing and dedicated team towards a compelling purpose: Sustaining our Ranching Heritage. I have learned a great deal from the KRIRM Management Council, faculty and staff at Texas A&M UniversityKingsville, the 39 KRIRM graduate students who have come through the master’s in ranch management program during my tenure, and of course the broad group of friends across the ranching industry that I have made along the way. This has been an amazingly fulfilling journey.

As I reflect on the impacts of our team over these years, it’s not the vast acreage or the number of cows and horses managed by alumni that I am most proud of, it’s the student development aspect that is most rewarding. Nothing has been more satisfying and motivating to me than to witness the growth of our graduate students during the two years they spend at KRIRM, and watching them succeed beyond their own expectations. I see the influence and the positions these alumni hold today, and I think back to the new students that arrived eager to learn just a few years prior.

I am proud that the two years these students spent in Kingsville with our KRIRM team contributed to the success enjoyed by the students and their families today. Beyond that, I am proud that these exceptional alumni are modeling excellence in ranching across this nation.

Over these years, our team of faculty and students has served the ranching industry well, one case study project and one ranch at a time. As I look back on the projects and recommendations made by our students, the positive impacts of their work cannot go unnoticed. It has been immensely satisfying to see our students’ recommendations implemented and helping the Institute’s partnering ranches to better achieve their goals.

Today, KRIRM is positioned for significant expansion. With renewed commitment from university administration for additional positions, and the continued financial support of stakeholders that invest in our mission, KRIRM will be adding several new faculty positions in the coming year. These new faculty will help expand the research and outreach of KRIRM, and will certainly help to leverage the teaching and research opportunities made available through the gift of the H.R. Smith Ranch. It will be exciting to watch KRIRM grow in impact and service through the compelling mission of Sustaining our Ranching Heritage through Education, Innovation, and Outreach. However, I will watch KRIRM advance from a new perspective.

Continued on page 14

700 University Blvd., MSC 137 Kingsville, TX 78363

361-593-5401

361-593-5404 fax

krirm@tamuk.edu

krirm.tamuk.edu

Clay P. Mathis, PhD, Director and Robert J. Kleberg, Jr. & Helen C. Kleberg Endowed Chair

Emily Stribling, Editor

MANAGEMENT COUNCIL

Chair: John Alexander, Jr., King Ranch, Inc.

James Clement III, Beggs Cattle Company

Caroline Alexander Forgason, Robert J. Kleberg, Jr. & Helen C. Kleberg Foundation

Heath Grigg, King Ranch, Inc.

Jeff Hildebrand, Hilcorp Energy Company

Clay P. Mathis, PhD, King Ranch® Institute for Ranch Management

Jim McAdams, McAdams Cattle Co.

Bob McCan, McFaddin Enterprises

Shad Nelson, PhD, Texas A&M University-Kingsville

Clint Richardson, Ag Reserves

Jason Van Tassell, Sunlight Ranches

Neal Wilkins, PhD, East Foundation

On the Cover

In this Issue

Fall 2023, Volume 19, Issue 2

2 | Reflection, Growth and a Heartfelt Goodbye After Thirteen Years Leading KRIRM KRIRM Director, Clay Mathis, PhD, reflects on his time and the future of KRIRM as he transitions into the role of Department Head for Animal Science at Texas A&M University

4 | True Ranches Pursuing sustainability, data traceability and partnership with True West Beef

8 | New Students Hope to Impact the Future of Ranching KRIRM Class of 2025 begin their graduate school journey

10 | Ranch Biosecurity Planning Protect Your Animals and Your Business

12 | Education & Innovation Record High Cow Prices Can Have Lingering Effect

15 | 20th Annual HOLT CAT® Symposium on Excellence in Ranch Management ‒Drought Recovery and High Cattle Prices: Making the Right Decisions Now The 2023 Symposium will be delivered in-person and online

Our Mission

Sustaining our ranching heritage through education, innovation, and outreach.

Our Vision

We are determined to educate leaders who will make a positive difference in ranching and ensure that our hard-earned heritage is not lost.

Wyoming’s True Ranches

Pursuing sustainability, data traceability and partnership with True West Beef

By Kindra Gordon

It is said that “Big things are built one brick at a time.” For Wyoming-based True Ranches LLC that approach has established a solid foundation for their modern day, innovative beef production efforts.

The cornerstone was laid in June 1957 when Dave and Jean True, pioneers in Wyoming’s oil industry, purchased their first ranch –the scenic Double Four located beneath the shadow of Laramie Peak west of Wheatland, Wyo. The purchase of 35 Hereford cows and 1 Hereford bull named “Nugget” marked the beginning of the family’s entry into the cow-calf business.

Expansion came quickly adding cows and land. The Wheatland Farm and Feedlot was purchased in 1960, followed by the Rock River Ranch in 1961. ADA Ranch and LAK Ranch, which includes both farm ground and ranch pastures, were acquired in 1964.

Ashley True VanDeest is the granddaughter of H.A. “Dave” and Jean True, and she shares how her dad (Dave) tells stories from the family’s early ranch days and his parents’ intention of making sure a strong work ethic was instilled in their children. “He talks about working on the ranch in the summer, from the day school was out until the day it started again,” Ashley shares.

Today, True Ranches LLC is under the umbrella of the family owned, Casper, Wyoming-based True companies, which includes

Dave True with his first Hereford bull, Nugget.

LAK Ranch, acquired in 1964.

entities serving the energy, agriculture, real estate/ development and financial industries. Two of Dave and Jean’s four children remain actively involved, as well as several third generation family members.

A growth mindset has been key to True companies’ success. Within their ranching enterprise, the addition of four more ranches – Chalk Bluffs and VR both purchased in 1983, the HU Ranch in 1988 and the Bixby Ranch in 2019 – has brought True Ranches to a total ownership of eight ranches, two farms, and one feedlot, employing approximately 90 people.

EYES ON THE FUTURE

More recently, True Ranches became an investment partner with Fort Supply Technologies in 2021 with a focus on advancement of tracking solutions for the beef supply chain from the ranch through finishing and to the packer. Additionally, with an eye toward traceability and vertical integration, True Ranches has become a co-owner in Jerome, Idaho-based packing company True West Beef which is up and running since June 2023.

Of these efforts, Robert Gill, Superintendent for True Ranches LLC, says both go hand-in-hand with meeting consumer beef demand for the future. “A lot of supply chains are seeking that link of pasture-to-plate traceability more and more for consumer assurances,” he notes.

Gill has been with True Ranches since March 2015, and brought a unique skill set to the ranch as a hydrologist who also had experience in the meat business. Working with the team of eight foreman, one at each ranch location, as well as

a farm foreman and feedlot foreman, Gill communicates daily with crew members to achieve ranch and production goals. He attributes autonomy across all of their team for their success. Gill shares, “Nobody knows the ground better than our foremen, and we rely on that.”

Likewise, he appreciates the commitments from True Ranches employees, and says, “We have a very tenured team – with some 35 year employees. We have a low rate of turnover and that speaks a lot about the True family.”

Gill acknowledges that having ranches spread across the eastern third of Wyoming, from the Black Hills border with South Dakota to south of Cheyenne, is one of True Ranches’ biggest challenges. “There’s tremendous variability with precipitation along with natural variability of the landscape,” he explains, and adds, “to manage that with consistency while producing a consistent beef product is our challenge.”

MANAGEMENT EFFICIENCY

The operation is primarily Angus-based with spring calving herds bred to both Angus and Hereford sires to capitalize on terminal traits among calves destined for the beef supply. A fall calving herd is maintained on one of the True Ranches near Casper. Embryo transfer is utilized within this maternal herd to produce high quality bulls and females to utilize as future breeding stock. Additionally, artificial insemination is utilized on 2,000 to 2,500 heifers each year to produce more replacement females and sires for the herds.

“We have a very tenured team – with some 35 year employees. We have a low rate of turnover and that speaks a lot about the True family.”

- Robert Gill, Superintendent for True Ranches LLC

Calving season begins in February with firstcalf heifers and runs through May for the mature cow herd. Depending on pasture

With an eye toward traceability and vertical integration, True Ranches utilizes tracking solutions for the beef supply chain from the ranch through the packer.

conditions, weaning begins in late August for young cows and may extend into late November for the mature cows.

In total, True Ranches produces about 7,500 calves annually for the beef supply and their own replacement needs. At birth, each calf receives a unique identification number (usually the dam’s number) and at weaning receives an Ultra High Frequency (UHF) RFID ear tag that allows for data tracking – from birth and weaning weights to health and production information – through each animal’s life. Gill notes, “We have spent a lot of time and effort on traceability, and have now invested in Fort Supply Technologies. We know traceability is part of the future.” (Fort Supply Technologies products include Dual Tracker, Health Tracker, Asset Tracker and Value Tracker.)

True Ranches also collects DNA on 16 genomic traits via the Igenity Beef program offered by Neogen.

“We use all of the data collected for ranch decisions. Our database is very robust,” Gill shares.

With their vertically integrated structure, weaned calves either go into the stocker program or to the Wheatland Feedlot for finishing and are fed feedstuffs raised on True Ranches’ farms. When extra feedstuffs allow, they also

acquire feeders to feed-out. Finished calves have been marketed live or via the grid to JBS and Cargill. Now, with their True West Beef partnership in place, more finished calves will be processed there and will be marketed under AgriBeef’s Double R brand. Gill notes that True West, via its partnership with AgriBeef, has a strong market share throughout the Northwest and international markets.

SUSTAINABLE PRACTICES

With each of the “bricks” in place for True Ranches LLC to offer pasture to plate beef products, their bottom-line remains focused on staying sustainable for the future. “Keeping our ranch operations sustainable is our continued focus,” says Gill. He points out “Drought years are our limiter.”

To that end, since his arrival in 2015, Gill and True Ranches have focused on enhancing water developments and grazing infrastructure across the ranch. This has included adding 40 miles of water pipeline, 100 stock tanks, and new fencing and processing facilities. “We see this infrastructure contributing to the ranches’ sustainability,” he says. As a result, grazing has been improved, which in turn will help to reduce reliance on feeding hay and other grain supplements to the cowherd.

Additionally, hosting a King Ranch® Institute for Ranch Management student during the winter and into spring of 2023 allowed for a detailed analysis of the range and harvest efficiency across the True Ranches properties. Gill tells that Tyler Woodland '23 modeled the acreage looking at soils, precipitation, and vegetation and was able to determine optimum carrying capacity recommendations. Gill looks forward to implementing that data and management recommendations with the ranch foremen – and moving toward enhanced sustainability – in the years ahead.

As one of the largest, private ranchlands in Wyoming, True Ranches has demonstrated that ranching requires a balanced approach to land, water and wildlife resources. Recognizing their humble beginnings in the shadows of the Rocky Mountain West, VanDeest shares that True Ranches LLC, along with all of its sister companies, is proud of the heritage and lasting legacy established by Dave and Jean True, and welcomes the opportunities and challenges they have yet to face with determination, optimism and grit.

True Ranches LLC, along with all of its sister companies, is proud of the heritage and lasting legacy established by Dave and Jean True, and welcomes the opportunities and challenges they have yet to face with determination, optimism and grit.

True Ranches produces about 7,500 calves annually for the beef supply and their own replacement needs.

WILDLIFE ALSO INTEGRAL AT TRUE RANCHES

As they work to provide beef products to people around the world, True Ranches also supports wildlife populations and allows hunting and fishing access while maintaining their working ranch heritage.

Examples of their efforts, include enrolling thousands of acres of their private lands in the Wyoming Game & Fish Department’s AccessYes program for big game hunting. Additionally, True Ranches has worked with the Department to proactively manage their LAK property southeast of Newcastle in order to improve bighorn sheep habitat and provide hunting and viewing access to this isolated population of bighorns.

More recently, True Ranches has partnered with Infinite Outdoors, a web-based hunting reservation operation. This allows hunters as well as landowners to schedule specific hunt dates and hunt areas, facilitating better hunting experiences and more targeted wildlife management.

Double Four Ranch Headquarters - Wheatland, WY

Learn more about KRIRM and our master's program: krirm.tamuk.edu/masters-program

New Students Future of Ranching

Hope to Impact the

By Emily Stribling

At the King Ranch® Institute for Ranch Management (KRIRM), we teach experienced ranchers to become progressive leaders and exceptional managers. Three new graduate students –Nate Edwards, Seb Killpack and Paul Quin – join the ranch management master’s program this fall and begin their journey toward advancing their careers in the ranching industry. With unique background and experiences, they share a common desire to delve into the business of ranching to preserve ranching heritage with their systems thinking mindset and leadership skills.

NATE EDWARDS

Edwards was raised in Oologah, Oklahoma. His passion for ranching began working with family on his grandparents’ cowcalf operation. While earning his Bachelor of Science in Animal Science with a minor in Agricultural Economics at Oklahoma State University, he had the opportunity to work outside the classroom on a cow-calf operation and feedlot/bull test station further expanding his knowledge and understanding of the industry. Upon graduation in 2016, Edwards spent a short time in the grain industry as a management trainee before pivoting to become the first manager of Kourtis Family Farms located in Osage County, Oklahoma in 2017. Reflecting on his tenure as the first manager of a new operation Edwards states, “I was able to play a significant role in building the ranch from the ground up, an experience that I believe can serve me well in future endeavors.”

As Edwards was beginning his ranch management career, he was introduced to the Institute through an interview on the Working Ranch Radio Show. Understanding the benefits of lifelong learning, he recently decided to pursue the program. Edwards shares his desires over the next two years is to improve and advance his business management and leadership skills in order to develop himself into the best asset possible for future employers.

Looking toward the future, Edwards desires to serve as a manager for innovative and successful ranches while playing a significant role in leading the beef industry forward. “I believe KRIRM has a proven track record for building up industry leaders who make a positive impact in whatever they pursue post-graduation through implementing real-world training.”

Edwards and his wife Ellen have been married for seven years and have relocated to Kingsville, Texas with their two-year-old son Tatum who loves to play and “work” on the ranch.

SEB KILLPACK

Raised in southeastern Idaho, Killpack grew up working with his parents and neighbors at local small farms and ranches and competing in roping events. While pursuing his bachelor’s degree in Agricultural Engineering Technology at BYU-Idaho, Killpack worked multiple jobs for local ranches gaining experience in the cow-calf and feedlot sectors as well as farming. After earning his degree in the Spring of 2020, he began working at Sheridan Ranches, a division of Ag Reserves, in Sheridan, Wyoming. He quickly transitioned from a seasonal employee to full-time and was responsible for his own herd of

Edwards and his wife, Ellen, have relocated to Kingsville, Texas with their two-year-old son Tatum.

cows and pasture rotation. “I was able to be tutored by great mentors and coworkers. My knowledge grew exponentially while working at Sheridan Ranches,” states Killpack. Prior to relocating to begin his master’s program, Killpack also worked as a seasonal employee for Sunlight Ranches on the Ceded Strip unit in Hardin, Montana.

Killpack was introduced to the Institute through his brother and KRIRM alumnus, Kord Killpack ’21. “I was able to see first-hand the growth and skills Kord attained while at the Institute and I gained an appreciation for what the program had to offer,” states Killpack. “I decided if ranch management was the career I was going to pursue, the Institute would be the place for me to attain the skills I needed to be successful in the industry.”

In the next two years, Killpack aspires to gain a deeper understanding of all aspects of the beef industry to broaden his horizon and understand the nuance of each sector and how they integrate together. He is also looking forward to learning the business-side of ranching, assessing the position of a ranch to inform decisions that drive the ranch toward profitability. Looking ahead, Killpack desires to be a capable ranch manager that creates a positive work environment for employees while running a profitable, progressive operation.

Killpack has been married for six years to his wife, Emilee, who grew up in the ranching industry in southwestern Wyoming. They have one daughter Steele (2) who loves interacting with all the animals on the ranch.

PAUL QUIN

Quin was born and raised in the horse country of Pilot Point, Texas. He graduated from Texas A&M University in 2013 with a bachelor’s degree in Rangeland Ecology and Management with a minor in Soil and Forage Sciences. Throughout college he had developed a strong passion for learning and understanding the ecology of grassland environments which ultimately led him to pursue a hands-on career in the operation of Ranch Management. Quin has 10 years of experience serving ranches in central Montana, Oklahoma, northcentral Texas, and northeastern New Mexico. The majority of his

work has assisted cow-calf production systems, both purebred and commercial, with extensive heifer development programs and intensive grazing systems focused on using cattle to heal the land.

He also served as the bison manager of a large scale, 560,000-acre ranch in northeastern New Mexico. “Taking a pot load of bison up to 9,000 feet through steep switchbacks to then herd through high mountain meadows and streams was an incredible experience I will never forget,” reflects Quin. His passion for ranching comes from a genuine love for the land, livestock, and people that are so closely connected to it.

Quin first heard of KRIRM during his time at Texas A&M University. “What sparked my interest to apply to the program was my desire to grow in excellence as a ranch manager and to become more adept in making decisions for a ranch. As I thought and learned more about the program, I came to realize the education, resources, and training they offer is the avenue to help me to achieve a higher degree of excellence in this industry,” states Quin.

Quin is looking forward to further developing the skills needed to financially evaluate an operation and to better understand the relationships between meaningful financial benchmarks saying, “I am a firm believer that ranching can and must be profitable to continue the legacy and heritage of this incredible industry.” He also hopes to be challenged in his understanding of systems thinking and to connect with other excellent leaders in the industry while improving his own leadership skills. When asked what his long-term goals are within the industry, Quin states, “To be the Ranch Operations Manager for a business that highly values faith, family, and purpose. I envision the Institute challenging my own paradigms and thought processes in how we develop a vision and goals for a ranch, which are foundational to the business of ranching.”

Quin has relocated to Kingsville, Texas with his wife Jessica and three daughters who love riding their horses and playing; Fairres (5), Josie (2) and Ranie (1). Jessica has previously served as an elementary special education teacher as well as a track and cross-country coach and looks forward to homeschooling their three daughters during Paul's time at the Institute.

Killpack and his wife, Emilee, enjoy the ranching lifestyle with their daughter Steele (2).

Quin and his wife, Jessica, with their three daughters; Fairres (5), Josie (2) and Ranie (1).

Ranch Biosecurity Planning:

Protect Your Animals and Your Business

By Julia Herman, DVM, MS, DACVPM

Every day cattle producers are taking steps to protect their families, animals, and operations from various risks. These risks could include inclement weather, poor nutrition, predators, viruses and microbes, contaminated water, among many others. The cattle production system in the U.S. does an amazing job of upholding high standards of animal care and handling, as outlined in the Checkoff-funded Beef Quality Assurance (BQA) Program. Biological risk management is also essential for the people working on farms and ranches and for preventing the spread of human illness between these operations, as seen with COVID-19. These biosecurity techniques can also be applied to your cattle herd. As discussed in BQA, the goal of biosecurity is to protect animals from disease by minimizing the movement of biological organisms such as viruses, bacteria, parasites, etc. within or onto an operation. This in turn promotes animal health and minimizes the time and labor resources required to treat a sick animal.

Prevention of common cattle diseases occurs every time a rancher checks on their herd. This may involve quarantining new additions to the herd in a separate pen for 21-30 days before introduction to the herd. This reduces the risk of spreading diseases that could be incubating and provides time to test incoming animals for parasites or other diseases of concern, like Bovine Viral Diarrhea Virus (BVDV) or Johne’s Disease. Or it could be washing buckets, bottles, trailers, or other equipment between uses for individual animals or groups of animals. This is especially important when managing young or sick animals whose immune systems are not as developed or compromised. Vaccination is a common way to aid in prevention of diseases such as Bovine Respiratory Disease in your cattle herd but applying biosecurity principles remains important because not all diseases have vaccines available. Improving general husbandry including environmental

hygiene, annual employee training, and reducing stress all contribute to disease prevention. In the end, developing and maintaining a biosecurity plan that is specific to your operation is essential to keeping your herd and our food supply safe.

Daily biosecurity practices include some of the most important steps to protecting the cattle herd. BQA has partnered with the USDA funded Secure Beef Supply (SBS) Plan to develop resources for cattle producers on how to properly prepare for daily cattle diseases. The BQA Daily Biosecurity Plan for Disease Prevention template offers an introductory, stepwise biosecurity plan for identifying biosecurity risks on cattle operations. Producers can customize plans to their own operation, allowing flexibility for producers and their resource team to evaluate what management practices work best for their situation. Working with the herd veterinarian provides unique opportunities for evaluating current practices and collaborating on steps for improvement.

This plan is a precursor to the Secure Beef Supply (SBS) Plan, an enhanced biosecurity plan which will be necessary during a potential foreign animal disease outbreak such as with foot and mouth disease (FMD). The SBS plan and training materials have more amplified biosecurity steps protecting against FMD, the most contagious viral disease that affects cloven-hooved animals (such as cattle, pigs, sheep, goats, and wildlife). This disease causes blisters in the mouth and on the feet of these animals. Thankfully FMD does NOT affect public health or food safety so humans cannot get the disease and meat and milk from affected animals are safe to eat and drink (A note –FMD is different than Hand, Foot, and Mouth Disease which does affect humans). The effects on our economy, trade, and way of life would be tremendous if this disease were to enter the U.S. or North America. On the SBS site, producers can

Beef Cattle Specialist Veterinarian, NCBA, a contractor to the Beef Checkoff

learn more about FMD, what it looks like in affected animals, and find tools and design concepts to incorporate into their facilities and their business plans.

To improve their biosecurity practices, cattle and livestock producers can prepare by:

Writing operation-specific biosecurity plans during peacetime that can be implemented during an outbreak

BQA Daily Biosecurity Plan for Disease

Prevention along with an example plan is available at: www.bqa.org/resources templates-assessments

Example enhanced biosecurity plans and templates for feedlots and cattle on pasture are available at: securebeef.org/beef-producers biosecurity/

Developing contingency plans for periods of restricted movement

For example, financial risk management will be critical if you are unable to move your animals or product during an FMD outbreak.

This information can also be used when developing an emergency action plan

Keeping movement records of animals, people, equipment, and other items on and off your operation

Having a national Premises Identification Number (PIN) issued by the office of your State Animal Health Official

With these biosecurity goals, realize that biosecurity is always a work in progress as your business may change from year to year. Dr. Nick Lyons, a veterinarian focused on international animal health, has said, “Biosecurity is a verb, which means it’s always adapting to the situation.” Producers can prioritize action from the BQA Daily Biosecurity and SBS plans on what your operation has already done or can do quickly versus what could be developed over the next year. Record keeping is extremely important during normal business operations and especially during a disease outbreak.

who are not infected with FMD, movement permits will be required to move animals or products. Enhanced biosecurity plans that are submitted will be the minimum requirement to receive a movement permit. State animal health officials will prioritize risk and work with federal animal health officials to coordinate movement decisions. Producers with these enhanced plans will likely move to the front of the line when it comes to getting permits approved, it is advisable to work with your state veterinarian’s office to better understand their requirements. It is also possible that an enhanced biosecurity plan will be needed to qualify for indemnity payments if your animals are infected and get depopulated during an outbreak. This enhanced plan proves to the state veterinarian and USDA officials that you had been implementing biosecurity steps prior to the outbreak. Even though we hope FMD never gets to the U.S., producers should recognize the benefits of biosecurity planning for every day diseases and for those transboundary diseases (also known as foreign animal diseases) such as FMD.

Biosecurity is one thing that the producer has the most control over. Biosecurity can be adapted based on risk assessments for an operation. Resources in your community such as your veterinarian, extension agent, or BQA state coordinator can work with you to write a biosecurity plan, implement the plan, and update it. They could also be instrumental in employee education on these biosecurity guidelines to focus on every day.

During an FMD outbreak, there are advantages for producers who already have an enhanced biosecurity plan established and enacted. For operations within a control zone of an outbreak

The most difficult concept about biosecurity is both preparing for a disease that is common, such as BRD, or a disease we hope never comes, such as FMD. These concepts are helpful in keeping both humans and animals healthy and can be continually improved upon. For more information and downloadable preparation documents, please visit Beef Quality Assurance at bqa.org or the Secure Beef Supply Plan at securebeef.org. We encourage this proactive and stepwise approach to protect your animals and your business now and in the future.

Biosecurity is one thing that the producer has the most control over [and] can be adapted based on risk assessments for an operation.

Education & Innovation

Record High Cow Prices Can Have Lingering Effect

By Rick Machen, PhD

The US beef industry is experiencing record high prices for calves, feeder and fed cattle. Cow prices are rising rapidly and expected to surpass 2014-15 replacement female prices.

La Niña weather patterns are shifting to El Niño. Great Plains soil moisture conditions are improving; the current U.S. Drought Monitor map has improved appreciably (except Kansas and eastern Nebraska) since January. Widespread rainfall and rising prices are reason for excitement in the beef industry.

Recall the 2014-15 scenario wherein consumer demand for beef was strong, beef supply had decreased, and record prices resulted. Optimistic cattlemen paid high prices for replacement females (ex. $4,250 per head for open two-year-old crossbred heifers). Almost a decade later, a retrospective look indicates those record high replacement female prices had a lingering effect on weaned calf unit cost of production.

Unit cost of production is calculated by dividing total annual cow maintenance cost by average weaning weight adjusted for weaning rate. (Unlike breakeven cost, the calculation does not include secondary income (ex. revenue from open replacement females, market cow and bull sales)). Supplemental nutrition, labor, and depreciation are typically among the top five contributors to annual cow cost. Supplemental nutrition is influenced by weather and stocking rate, labor is usually a fixed cost. Depreciation (a non-cash cost) can be influenced by management actions/decisions.

Two variables determine depreciation: cow cost and salvage value. Annual per head depreciation is determined by dividing the cow cost – salvage value difference by years of useful life. Most managers adopt the IRS allowable five-year useful life. Some argue that the useful life denominator should be longer (i.e. 7 years); note that depreciation (numerator) is not influenced by useful life.

Results of a KRIRM study considering the relationship between cow longevity and cow/calf enterprise economic performance indicate that, using an average 87% weaning rate and an aggressive once open culling practice, average cow age was 6.76 years. Consequently, a five-year depreciation schedule for commercial cows seems appropriate.

Annual depreciation is often quantified as dollars per cow, and since it is a non-cash cost, it tends to get lost in the numbers. Perhaps a more resonating approach is to quantify the impact of cow purchase price (and the concomitant depreciation) on weaned calf unit cost of production. The base scenario for such a comparison is described in Table 1.

Assumptions for the two depreciation variables are merely a starting place. For the base scenario, a cow purchase price of $3,000 per head seems reasonable given current market conditions. Since depreciation is calculated over a five-year useful life, a five-year average utility cow salvage value of $932 per head (1150 lbs., $89.06/cwt) was determined as described in the Table 1 footnote. Projected annual average utility cow

prices for 2023-2027 are shown in Figure 1. According to CattleFax data, using a 2022 Texas Canner/Cutter cow annual average price ($71/cwt) would have lowered the base price for projections by $6/cwt.

The influence of four primary variables involved in calculating depreciation’s contribution to weaned calf unit cost of production is shown in Table 2. Note the impact of cow depreciation: $98/cwt of calf weaned for five years. Decreasing purchase cost or increasing salvage by $100/head had the same $4.80/cwt impact. A 25 lb. increase in average weaning weight had a similar $4.70/cwt impact. A 1% increase in calf crop weaned reduced depreciation per cwt of weaned calf by $1.20. Note the combined impact of the four changes is $15/cwt ($84/cwt of calf weaned). Recall this appreciable addition to weaned calf unit cost of production is for a five-year period.

The disparity between market price for replacement quality heifers and the book value of raised heifer calves will encourage the retention and development of replacement females. Larger cow/calf operations that need several hundred (or more) replacement females annually will continue to retain and

develop and thereby enjoy an economy of scale advantage. Ranches that choose to purchase replacement females usually assume greater depreciation cost per cow.

Though not included as a variable in the analysis, cow longevity has an obvious impact as well. Cows that remain productive beyond their removal from the depreciation schedule turn the depreciation expense to a ‘depreciation credit’. Productive cows remaining in the herd after weaning a fifth calf do not incur depreciation expense and therefore wean calves with a lower unit cost of production. Likewise, long productive cows reduce the number of heifers kept for replacement or the number of cows purchased in a high-priced market.

In market conditions like those described in the opening paragraph, it is easy to get caught up in the “never going to be another bad day” mindset. The scenario developed here likely does not mirror that of any reader, nor is the intent to dampen the current beef industry enthusiasm. Rather, the intent is to encourage ranch managers to make decisions in the longterm best interest of the cow/calf business by remembering to consider the long-term implications of cow purchase price.

1Projected 2023-2027 average Texas Utility cow price. Projection based on CattleFax 2022 average Texas utility cow price projected for 2023-2037 using FAPRI Utility cow price forecast. The projected five-year average annual Utility cow price for 2023-2037 was $89.06/cwt.

2Number of cows exposed / number of calves weaned

Table 1. Base Scenario for Determining the Impact of Annual Depreciation on Weaned Calf Unit Cost of Production

Table 2. Impact of Depreciation Determinants on Weaned Calf Unit Cost of Production

Reflection, Growth and a Heartfelt Goodbye After Thirteen Years Leading KRIRM, Continued...

Beginning October, 2023, I will assume the role of Department Head for Animal Science at Texas A&M University. I look forward to the opportunity to lead the department and to serve and support agriculture, and I will cherish my time spent at KRIRM. Even though my tenure as director is ending, I will always have a passion for the mission of KRIRM and the Institute’s success. I want to convey a sincere thank you to the King Ranch Family, the leadership of King Ranch, Inc., Texas A&M University-Kingsville administration, and each of the donors that have partnered with KRIRM in this journey to serve the ranching industry. The future for KRIRM has never been brighter!

Figure 1. Projected Utility Cow Price, $/cwt Year

Price,

Clay Mathis, PhD will assume the role of Department Head for Animal Science at Texas A&M University in October 2023.

Drought Recovery and High Cattle Prices:

MAKING THE RIGHT DECISIONS NOW

October 5-6, 2023 || Kingsville, Texas & Online

THURSDAY, OCTOBER 5, 2023

11:00 AM Registration & Trade Show

1:00 PM Welcome & Introductions

1:15 PM Weather Outlook: El Nino?; Matt Makens, Meteorologist, Makens Weather LLC

1:45 PM Restocking After Drought: Soils, Roots, and Forages; Burke Teichert, Ranch Consultant

2:30 PM Break & Trade Show

3:00 PM Cattle Price Cycle and Market Outlook; Derrell Peel, PhD, Professor of Agribusiness, Oklahoma State University

3:45 PM Finding Opportunity in an Evolving Beef Industry: Looking Ahead 20 Years; Lee Leachman, CEO, Leachman Cattle of Colorado

4:30 PM Speaker Panel Discussion

5:00 PM Adjourn

5:30 PM Social Hour at Caesar Kleberg Wildlife Research Center

6:30 PM Prime Rib Dinner

7:30 PM Recognition and Texas Farm Credit Certificate Awards

Beef inventories and markets are cyclical. Drought dissipation and bullish cattle prices indicate real opportunity for ranchers is just ahead. Register to hear symposium speakers reflect back and look ahead to better days and strategic choices for business improvement.

FRIDAY, OCTOBER 6, 2023

7:00 AM Coffee & Trade Show

8:00 AM Consideration on Counter Cyclical Marketing in this Cattle Cycle; Jason Sawyer, PhD, Chief Science Officer, East Foundation

8:45 AM Strategic Investment of Windfall Profits; John Maddux, Owner and Manager, Maddux Cattle Company

9:30 AM Break & Trade Show

10:00 AM King Ranch: Strategies for 2024; Robert Hodgen, President & CEO, King Ranch, Inc.

10:40 AM Padlock Ranch: Strategies for 2024; Trey Patterson, PhD, President & CEO, Padlock Ranch Co.

11:20 AM Speaker Panel Discussion

5:00 PM

For more information and to register, visit: krirm.tamuk.edu/symposium

700 University Blvd, MSC 137 Kingsville, TX 78363

Continuing Education in Ranch Management

2024 Event Schedule || Events Available in Person & Online!

Successful Operations RequireWorld-Class Training for Ranch Employees

It is more crucial than ever that ranch employees have the tools they need for successful ranching operations. Our unique approach to continued education in ranch management means we provide multiple opportunities throughout the year for hands-on, applied learning that fits into a professional schedule and covers a wide-range of industry specific topics. Register and view more information at: krirm.tamuk.edu/outreach

Application of Advanced Genetic Technology in Beef Cattle

February 23-24, 2024 || Fort Worth, TX & Online

Managing the Cow-Calf Business Lectureship

April 12-13, 2024 || Kingsville, TX & Online

John B. Armstrong Lectureship on Systems Thinking

August 12-14, 2024 || Kingsville, TX & Online

Managing Farm and Ranch Employees Lectureship

September 20-21, 2024 || Kingsville, TX & Online

HOLT CAT® Symposium on Excellence in Ranch Management

October 2024 || Kingsville, TX & Online

Connect with us online for the latest news and updates on the KRIRM program!

All events count toward the TFC Certificate in Advanced Ranch Management