Why Cowboy Culture Isn't Working Anymore By Jim Gerrish

MAY, Idaho

The average working ranch in the USA is not a very profitable business.

More years than not, most ranches lose money or have a return on assets in the 1-1.5% range. Many of these ranches are very proud of the fact that they are keeping the old ranching traditions and “cowboy culture” alive. What most don't realize is the very cowboy culture they are trying to maintain is one of the greatest impediments to their profitability.

In previous columns, I have shown the relative increase for input costs like fertilizer, fuel, equipment, etc. over the last 50 years have far exceeded the increase in value of our livestock products across the same time span. This relationship can also be used to illustrate what has happened over that same time span in terms of how many calves it takes to pay for different aspects of cowboy culture.

I will use the same 1973 to 2023 contrast for cowboy costs as I have previously used for other inputs. Remember that 1973 was the all-time record high cattle prices in terms of consumer buying power while 2023 has brought us to the all-time highest nominal dollar value of cattle. Thus, I am making these comparisons in very favorable cattle price years.

Let's start with the basic wage of cowboys in 1973 compared to 2023. According to Bureau of Labor Statistics (BLS), the median cowboy annual salary in 1973 was $5,166 while it had risen to $42,024 by 2023. Of course it has gone up. Inflation and all that stuff. We'd be dummies if we thought a cow- boy earned the same amount today as in 1973.

In that record 1973 year when cattle prices were at an all-time high, calf weaning weight was around 400 lbs and weaned calves were worth about $250/head. Divide the cowboy's annual salary of $5,166 by the value of a weaned calf and we see it took the revenue from 21 calves to pay the annual salary. The average weaned calf at 540 lbs in 2023 will likely have a value of about $1200 this fall. Since we haven't made it through the year yet, we can only speculate. Divide the $42,024 median salary by a calf value of $1200 and we find it will take 35 calves to pay the cowboy's annual salary.

Since we know the average weaned calf value in 2022 was about $852, we could use that value and have greater confidence in our calculation. Based on the 2022 calf value, it took 49 calves to pay the cowboy.

Almost every cowboy needs a 3/4 ton pickup for hauling the horse trailer and other stuff around the ranch. In 1973 the median price of a new F250 was $5,170. Using the 1973 calf price of $250/head, it took 20 calves to buy him a new pickup. By 2023 the median price of an F250 was $70,000 and it took 58 of those $1200 calves to buy the equivalent pickup. You see why most cowboys drive used pickups?

The cowboy has other working needs including the horse trailer, horses, saddle and tack, etc. Every cowboy has costs more than just his salary. Talking in the past month with Dallas Mount of the Ranching for Profit schools and Burke Teichert, who was formerly VP of operations over the entire Deseret Ranch system, they both suggest the total cost of hiring, hous- ing, and equipping a cowboy is in the $100-$120,000 range. That is the revenue from 80 to 100 calves at today's record high prices to pay for having each cowboy on the place. Three years from now, the value per calf will likely be back down in the $850 range. That will take 120 to 140 calves to pay the cowboy's salary assuming it stays the same as it is today. What's the probability of that?

There are some ranches in the USA that do consistently make a profit. One of the factors that has a great deal to do with profitability is the labor requirement per cow or AU/FTE (animal units per full time employee). The goal on those profitable ranches is usually for one FTE to manage at least 1000 cows. That AU/FTE ratio spreads those high cowboy costs out over enough produc- tion units to keep labor at a manage- able level.

When I see three or four full-time cowboys on a thousand cow outfit, I know profitability is going to be a challenge. The math is real simple for a thousand cows per FTE. The annual labor bill is going to be about $100 to $120/calf. With four cowboys having a good time maintaining cowboy culture on the ranch, the labor tab per calf may be $400 or more. That simply does not work out for profitable ranching.

The worst aspect of cowboy culture that I see is the attitude that if it can't be done from the back of a horse, it isn't worth doing. Failure to understand that it is land productivity that drives ranch profits far more than individual animal performance is probably the number one factor limiting the profit potential on most ranches. In most environments, feet on the ground create far more profit than do butts in the saddle. n

Jim Gerrish is a practitioner, researcher, and educator in the realm of grazing management on pasture and range. You can learn more about implementation of and tools for Management-intensive Grazing at www. americangrazinglands.com. His books are available from the SGF Bookshelf.