Date of this Version
Our goal at Deseret Land and Livestock is to maximize long-term profit. Our profit is a function of the following factors: the prices we receive for our production, our amount of production, the costs of production, and the productive capabilities of our land and labor. Prices, production, and cost are managed on an annual basis. The long-term outcome of one’s management is determined by their attention and skill in enhancing the capability of land and labor.
These factors of profit can vary tremendously within and between years. For example, prices for 400-500 pound steer calves from 1979-1989 varied nearly $.58/pound over the period and on average the prices varied $.17/pound within any given year during this time, with a maximum within year difference of $.26/pound (Cattle-Fax 1991). Our range forage production has varied in the same 10 year period from less than two weeks of active growth to over three months. Finally fuel and interest on borrowed money costs have oscillated dramatically over this same period with all costs tending to increase.
The tremendous variability of both the biological and financial environments in which ranchers do business make it a very high risk business. No single fixed strategy, no matter how good, will maximize long-term profitability. We believe that in this type of business environment the key to success is to have the flexibility to adapt.
We calve late because it provides us with the best fit between the cattle’s nutritional requirements over their production cycle and the ranch’s naturally produced forage. This match has helped us become a low cost operation, has reduced our susceptibility to inflationary pressures on cost, has increased our production, and has broadened our marketing opportunities.
Over the last twelve years, we decreased our total cost per pound of calf produced from over $.90 to $.62. We have gone from a cow/calf operation to a cow/calf/yearling operation. Finally we now look for marketing opportunities year-round instead of having to sell the calves each fall.