REGINA – Other people’s cattle are grazing Bob Ivey’s land, but he
doesn’t mind, “because I’m making a 15 percent return on the deal.”
The Ituna, Sask., farmer, who also operates a 2,000 head feedlot, said
his farm has been able to stay in the family because they have been
willing to take calculated risks.
In recent years, Ivey’s son has returned to the 4,300-acre farm after
completing an agriculture degree. Ivey is now trying to find a way to
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involve his daughter, who works in Alberta as a livestock nutritionist
and advises her family on animal management.
“We’ve found that any time we can eliminate a middleman, buy locally or
convert steps in our operation that will result in lower labour and
inputs, we become more profitable. And fencing off cropland, seeding it
to grass or just renting it out after harvest all make money with a
minimum of cost or labour,” he said.
Ivey told a crowd of farmers and ranchers attending a Saskatchewan
Agriculture seminar at Canadian Western Agribition last week that they
didn’t have to own the cattle on their farm to make money, “just own
the land.”
In an interview he said, “if you buy a (quarter) for $40,000 or $50,000
and fence it, you can generate 30,000 pounds of beef on that land in a
season. And somebody will pay you $12,000 for the privilege of putting
their cattle on your land.”
Ivey said many cattle producers pay 35 cents a day per acre for custom
grazing of their stock.
“You buy the fences once and they work for you for a long time.
“You provide water and mineral and keep the fences fixed, check the
cattle every day. Very little risk, just some fertilizer, grass seed
and time.
“You make 10 to 15 percent return on your investment and something for
your time and in turn you build up your asset base,” he said.
Ivey said the system works well for young farmers starting out because
they can show their banker a profit with few risks in their business
plan.
He said the same marginal land could be cropped with “much more risk”
and “less profit and a lot more labour.
“There are potholes and bush on lots of prairie land that aren’t
available for grain that are great for cattle, even somebody else’s
cattle. And custom grazing that land often returns a lot more money
than grain farming around the holes.”
He said renting the land out after harvest for three months can
generate $2,500 a quarter. Somebody else’s cattle will eat the chaff
piles, the crop regrowth and fall weeds.
“We made about $25 (per) acre by grazing after harvest this year,” he
said.
“If a cattle producer knows he can pull his cattle off of range in
August by moving his cattle to your land and rest his pasture for the
fall, he can increase his stocking numbers and both of you will make
more money and he gets better pasture the following year,” he said.
Ivey estimates that custom grazing brought an additional $50,000 to his
farm this year with few costs.
“We are a small farm trying to stay small by staying profitable. There
is room for 20,000 head feedlots and 20,000 acre farms and there is
room for us too, it’s just another way of doing business on the
Prairies.”
