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ARS Home » Plains Area » Fort Collins, Colorado » Center for Agricultural Resources Research » Rangeland Resources & Systems Research » Research » Publications at this Location » Publication #336294

Research Project: Improved Management to Balance Production and Conservation in Great Plains Rangelands

Location: Rangeland Resources & Systems Research

Title: Adapting to Mother Nature's changing climatic conditions: Flexible stocking for enhancing profitability of Wyoming ranchers

Author
item Ritten, John - University Of Wyoming
item Bastian, Christopher - University Of Wyoming
item Derner, Justin

Submitted to: Popular Publication
Publication Type: Popular Publication
Publication Acceptance Date: 6/20/2017
Publication Date: 7/11/2017
Citation: Ritten, J., Bastian, C., Derner, J.D. 2017. Adapting to Mother Nature's changing climatic conditions: Flexible stocking for enhancing profitability of Wyoming ranchers. Popular Publication. Reflections 2017. pg. 8-11..

Interpretive Summary:

Technical Abstract: Ranching is a dynamic business in which profitability is impacted by changing weather and climatic conditions. A ranch-level model using a representative ranch in southeastern Wyoming was used to compare economic outcomes from growing season precipitation scenarios of: 1) historical precipitation data, 2) average precipitation received each year, and 3) variability in growing season precipitation is increased by 25% with the amount remaining unchanged. Model results reveal that profitability for the ranch is overestimated by 81% over a 35-year horizon if a ranch planned for average weather every year instead of the actual historical precipitation data. Destocking during dry years (when prices are unfavorable), coupled with the production lag associated with rebuilding through retention, has a very negative impact on ranch profitability. Dry years hurt profitably by liquidating breeding stock (or purchasing additional feed), and the ranch can lose out on sales in subsequent years as it tries to build herd numbers. Ranches also can lose out in wet years due to the inability to rapidly increase stocking to take advantage of additional grass supplies. It is simply infeasible to quickly adjust cow numbers when additional forage is available if retaining herd genetics is important by keeping heifers. However, if steer calves are retained as a separate stocker enterprise (to provide flexibility in the operation) profitably can be increased. The added flexibility from utilizing stockers to match forage availability with forage demand can improve long-term profitability by over 23%. When growing season precipitation variability was increased by 25%, cow/calf only operations could expect to see profitability decrease by an additional 20% whereas ranches that add a stocker operation would increase long-term profitability by 35% compared to cow/calf only operations. The addition of stockers allows the ranch to better match forage demand to availability. This translates into opportunities to utilize “extra” forage in good years while minimizing overutilization in bad years. The second benefit of including stockers into a cow-calf operation is that the ranch has a more stable number of cows. This benefits ranchers by not having to liquidate valuable herd genetics in drought years. Our results suggest that the addition of yearlings can allow the ranch to better adapt to growing season precipitation variability and related changes in forage supplies.