Innovative Oklahoman says ranch management is the best job in the world
by Allan Nation
VINITA, Oklahoma: You can tell by the bounce in his step that Wally Olson is a man enjoying life. Manager of the sprawling Kelley Ranch in the Cherokee Prairie region of Northeast Oklahoma since 1987, Olson said he had “The best job in the world.”
The 10,000 acre ranch is owned by the Flint family in Tulsa. They give Wally a mostly free rein to run the ranch as he sees fit and allow an equity interest in some of the livestock.
The ranch is mostly warm-season native grass with about 3000 acres of fescue on the wetter natured soils. Many of the warm-season grass areas are overseeded with annual ryegrass for cool-season grazing.
The ranch is subdivided into 130 permanent paddocks, which are further subdivided with temporary fence on a seasonal, as-needed basis.
The animal mix is 630 mother cows, 2037 stockers and 2232 meat goats. An additional 200 cows are contract-grazed seasonally to better utilize the seasonal grass growth curve.
The cows are bred to start calving on August 15 and all of the calves are left on the cows until the following spring. All home-grown calves are grown to heavy feeders and some are finished on grass for the Texas grassfed market. “We wean by watching the cows’ body condition. We want her to suckle her calf as long as she can stand it,” Olson said.
The ranch uses Barzona and South Poll bulls from Teddy Gentry in Alabama.
Other ranch enterprises are quail, deer, turkey and duck hunting; steam coal and a native grass seed business.
“We’re also cashing in on today’s real estate opportunities. In the last few years we have sold off 21% of the ranch but have never reduced the overall stocking rate.”
GOAL OF 100% RETURN ON INVESTMENT
Olson said he has but one modest goal for the ranch - an annual return of 100% on the equity tied up in the ranch’s livestock.
This is being achieved only in the meat goats but the ranch is nearing that rate of return in the highly leveraged stocker operation which is its primary enterprise.
(A $400 calf at a 75/25 leverage ratio would have $100 equity in it. At this level of leverage a $100 profit per annum would be a 100% return. A 100% return means your wealth doubles every year.)
The ranch specializes in buying very light stocker calves in the 250-pound weight range and reselling them at between 500 and 800 pounds.
“Our greatest unfair advantage is our ability to keep very lightweight stocker calves healthy and gaining well,” said assistant ranch manager, Ryan Brand.
“Most people don’t want to fool with very light calves.”
Brand attributes this unfair advantage to his attending a Bud Williams’ animal handling school in Texas.
“Since the school we have been able to cut our death loss from 6.17% to 1.79% and our vet bill from $16 a head to only six. That’s a savings of $20,000 a year in just the drug bills,” Olson said.
Animal performance has skyrocketed as well.
NEARLY THREE POUNDS A DAY ON NEW CALVES
“We were getting only a half pound a day on new stockers for the first month,” Olson said.
“Now we average nearly three pounds a day for the first month.”
In 2003, the first month’s gain after a 2% shrink has ranged from 1.6 to 2.8 pounds per day with most calves gaining at the higher rate.
Brand says he works with the new calves daily for the first 21 days. He said Olson videotaped his work and sent it to Bud who critiqued it for free.
“There are no absolutes,” Brand said.
“You’ve got to learn to read the cattle on an individual basis. Calves that are started right gain well and continue to gain.”
Following Bud’s instructions, Brand said he takes the new stocker calves for a walk every day. Williams believes that daily exercise is absolutely essential for good health in newly received calves. “We’ve found that the more you work with your stock the more you get paid because they gain better,” Brand said.
“I can tell that their daily walk makes them happy.”
This idea of the necessity for “happy cattle” apparently doesn’t sit too well with many traditional ranchers but Olson and Brand have become believers.
“Bud told us you’ve got to be happy when you are out there with the calves. The calves can sense your mood. If you’re uptight or depressed, they know it. If you are happy they know it and will mirror your mood.”
Olson said their experience has caused them to question the value of drugs in preventing sickness in stocker cattle.
“I think ranching is an art. Maybe we ought to get more of the science out of it.”
A SWITCH TO SELL-BUY ACCOUNTING
The other area Bud Williams has been a big help in is feeder cattle marketing.
After attending SGF’s Advanced Stocker Marketing School in San Antonio in January of 2003, Olson said he went straight to his local sale barn to see if what Bud had taught him was true.
“I could have made $65,000 that afternoon but I just couldn’t believe it could be that easy. Switching to a sell-buy philosophy has been tough. It has been hard for me to give up the idea of risk management but sell-buy marketing is definitely the way to go.”
He normally sells yearlings on a national video auction and buys back light calves on the local auction market. However, he will also sell a futures contract and buy calves against that as well.
(Rather than selling cattle when the grass runs out, Bud Williams teaches that stocker and feeder cattle should be sold whenever the margin between what you can sell one class of animal and buy another is the widest. Williams believes that what you paid for an animal is irrelevant because it can’t be changed. The only thing that you can manage is the difference between what you sell an animal for and what you can buy its replacement.)
“I am getting more and more confident with it,” Olson said. “It can really enhance a ranch’s cash flow.
The ranch also grows out and breeds heifers and trades in young stocker cows.
“We like to do what most ranchers don’t like to do because that’s where the money is,” Olson said.
This contrarian spirit extends to the ranch’s newest enterprise - meat goats.
“We use (West Texas rancher) Bob Steger as a grazing consultant and he sold us on adding meat goats,” Olson said.
Currently, they are the ranch’s most profitable enterprise on a return-on-investment basis with a return in excess of 100%. Such a return is possible because the kids currently sell for more than the ranch paid for the nannies.
“There is very little forage overlap between meat goats and cattle,” Olson said.
The goats predominantly graze on ragweed, sericea, lespedeza, blackberry, ironweed, multiflora rose and sumac. They can overwinter with no hay on stockpiled fescue.
The goats start kidding on May 15 and kid for 45 days. Olson said it was very important that the kidding season be short so that the goats can be moved from the kidding ground as quickly as possible to prevent internal parasitism.
The kids are weaned in November and sold in December.
The goats are marketed right off the ranch to local customers, by the truck load to Dallas Muslims and through a nearby auction in Leach, Oklahoma, which sends them to California.
“Marketing has not been a problem. We’ve got the numbers so buyers come to us and they all get sold easily.”
After two profitable years with goats, in 2003 the ranch decided to bite the bullet and rebuild all perimeter fences with net wire. Interior goat fencing is two-wire electric.
“We were told that only hungry goats would get out of a fence. We weren’t told that goats are always hungry.”
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