Canadian grazier finds selling year around grazing management to be a profitable niche

Staff report

PICKARDVILLE, Alberta: Canadian custom graziers, Steve and Stacey Kenyon, have no doubt about what business they are in.

“I’m in the cash flow business,” Steve said.

It was this realization that allowed him to quit his day job, and two years later in the spring of 2004 become a full-time grazier at age 31.

Rather than seeking to personally own land and cattle, in 2002 the Kenyons switched to seeking out people who owned land and cattle but were too busy to manage them well.

“In our situation with urban and oilfied pressures on land values, land ownership created a negative cash flow. I realized my first priority had to be in creating a steady year-around cash flow. We only own our home quarter out of 1800 acres.”

Once he stopped believing he had to own the land he grazed, he found lots of grazeable land that could be leased from absentee landowners or landowners who don’t want to manage their land.

“We also realized that we just couldn’t take the risk of cattle ownership. Just starting out, I couldn’t afford to make any mistakes. Custom grazing is an inherently low risk business with the bonus of a monthly cash flow. Our only risk is weather, and by using Management-intensive Grazing, we limit our risk to this as well.”

In 2002, Steve liquidated their personal cowherd and started looking for grazing clients, whom he terms “contributors.”

Their timing couldn’t have been more propitious for either the whole herd liquidation or starting a custom grazing business.

GETTING OUT WHEN THE GETTING WAS GOOD

First, he got $1500 for the cows he had purchased for $950/pair in 1996.

“I know that’s not the way agriculture usually works, but it sure works better if you sell high and buy low,” he said.

Second, Alberta was headed into what may have been its worst drought in history. This was then followed by the closing of the USA market due to BSE. The combination of these two factors sent the demand for grass through the roof, not to mention the good timing for the Kenyons not to own any cattle.

This gave the Kenyons the luxury of picking and choosing who they would do business with.

“My first priority was to find people who could pay their fees and secondly, contributors who would keep their cattle here year around,” he said. Year around cattle not only provides year round income for the Kenyons, but it provides pasture fertilizer with the feed that is brought in for the winter-feeding enterprise.

Today, the Kenyons have a year around herd of 200 animals with 275 more scheduled to come in this spring for year-round management. “We are aiming at bringing in smaller framed cows that can gain well on grass for our grass-finished meat market.” “I also have seasonal contributors each year to manage my surplus grass in the peak season. I call these animals my disposable herd. In 2004, we had 125 cow/calf pairs and 200 yearling replacement heifers as disposable herds.”

These are used to keep the spring flush of growth under control and are a critical element because Kenyons own very little equipment.

“My total equipment investment includes my pickup truck with a bale deck, my portable handling facility and my three portable water systems, which is all valued at less than $10,000.”

He charges a dollar a day per pair for green-season pasture and supervision. The contributor pays for all other additional costs.

His perennial pastureland is subdivided into permanent grazing paddocks with interior minimalist electric fencing.

The growing season in his area of Alberta is from the beginning of May to mid September. However, by utilizing stockpiled grass, he is able to spin his perennial pastures out until January.

He said the cows have no trouble grazing this even if the snow is in excess of 12 inches.

LOVES TO SEE THE FROST COME

“I love to see the frost. It works as my swather and turns the grass into standing hay. At 13% to 18% protein, it is higher quality than a lot of the stored hay fed in Alberta. Then the snow moves in to protect it.”

He charges out this fall and early winter grazing slightly higher than his green season grazing. They charge $1/dry cow/day for dormant season grazing.

“If you don’t have stockpiled grass, the alternative is to feed stored forage. Because of this, I believe our fall grazing is worth a little more than our summer grass,” Steve said.

“As a custom grazier, we also make more money grazing in the dormant season because we can ration the grass out better. A paddock that would last for three days in summer will last four to five under the snow.”

He then offers two deep-winter alternatives.

First they offer custom swath grazing of pea straw residue. The Kenyons direct graze the cows on swathed pea aftermath for $.85 cents to $1/dry cow/per day depending on the situation.

“Pea straw vines have pretty good feed value and second trimester cows have no problem grazing a swath through the snow. As long as we can avoid warm weather that causes the snow to melt and then freeze, we do just fine and have grazed through one and one half to two feet of snow.” They supplement minerals, protein and/or energy depending on the quality of straw and how cold it gets. “When we get down to -40 or -45 degrees (C or F, take your pick it is still really cold), the animals need some extra energy. We also use energy reserves off the animal’s back in our cold climate. I value a body condition score lost at $25/BCS in feed savings per cow. (1-9 scale)

He said the swaths are made by disconnecting the straw spreader on the rear of the combine. This concentrates the pea straw into a reasonable swath.

“With crop residue grazing, I don’t have the cost of seeding or swathing like regular swath grazing. I don’t own any machinery and don’t want to. We pay the grain farmer for his straw and it never leaves his land. We also bring in added nutrients through supplementation that benefits the grain farmer as free fertilizer.

He said to keep the grain farmers happy he is careful not to bring cows to the fields until they are frozen to prevent soil compaction. Usually this is not a concern anyway because they are still on dormant season pastures until early winter. “We usually try to swath graze until February but in the past we have grazed right through until the end of April.”

Because few grain fields are fenced in his area, he has to build a temporary two-wire electric perimeter fence. He then uses temporary, one-wire electric fences to ration out the swaths.

Portable, solar heated waterers are used in the early winter if there is not enough snow for the cows to lick. These have been made from old rock-pickers.

Kenyon’s second winter-feeding option is to feed purchased hay for 30 cents per head per day yardage plus the cost of the feed.

The one thing he will not do is put the cows in a pen and feed them.

Steve jokingly stated, “I hauled manure once in my life and it almost cost me my marriage. I now make the cattle I manage spread their own manure and not only is it more profitable for us but a lot easier on my wife!”

All custom hay feeding is done on his personal 160 acres or on long term leased land. He said he actually prefers feeding hay to swath grazing because he wants the nutrient transfer from the brought-in hay to enrich his land.

“I actually pencil in a net gain for our grazing enterprise of 24 cents/cow/day in soil nutrient gain. And, that only counts NPKS, not micro-nutrients or increased soil organic matter.”

He puts out two weeks worth of feed at a time with one day’s feed in each paddock. Access to the feed is rationed by opening a gate just like summer grazing. And Steve only has to start his pick-up once. He reduces feeding time by having multiple bale yards across his land, which reduces the distance traveled to put out feed.

“I try to open gates in the evening so the cows can benefit from the warmth of rumination at night in the cold weather.”

FREE LAND FOR LANDSCAPING SKILLS

A serious student of Greg Judy’s book No Risk Ranching, he began to seek out absentee landlords in his area. He will bring them to his ranch to show them what he is doing and would do on their land. “I spend a lot of time educating landowners on the ‘what and why’ of our operation. I have lost or have been turned down for land because of landlords who don’t think we can manage the land without any equipment. Traditional farming mentality is hard to overcome in our area.

“By managing land with scenic and wildlife values in mind, I have been able to get most of my land for very reasonable rates, some even for free. I now have people calling me to manage their land for them.”

He said for landowners who liked to hunt, he promises to be off their land from the first of July until the first of December. This allows for the stockpiling of forage for the November hunting season and we follow this with December dormant season grazing.

He has expanded this absentee owner program into finding land for Edmonton investors who want a place in the country but don’t want to have to manage it. Most of his investors only visit their properties once a year, if at all.

“Whether it be for recreation or simply an investment in land, it is a good deal for both of the parties. Investors get to participate in our area’s appreciating land values and we get to profit from improving their land.”

Edmonton is about a 45 minute drive from Pickardville.

Steve’s wife, Stacey, is also a big part of the operation with her own specialized expertise. She is a Certified Equine Massage Therapist through EquiTouch Systems, owns a Professional Pet Grooming business and has a Herd Health Technician diploma. The Kenyons have three children and feel that family time is very important in the upbringing of their children. Working off-farm only takes away from this, and their goal is to maintain a profitable business working together as a team and as a family unit.

© by The Stockman Grass Farmer

If You Would Like To Read More Articles Like This One, CALL 1-800-748-9808 And Request A Free Sample Of THE STOCKMAN GRASS FARMER TODAY!
Or Order A Free Sample Of THE STOCKMAN GRASS FARMER online. CLICK HERE.