Enterprise Budget, Bison Cow-Calf

Enterprise Budget: Thomas Foulke BISON Steven J. Torok Cow-Calf Tex Taylor Short Grass Prairie, Eastern Wyoming Edward Bradley B-1092 January 2001 Authors: Thomas Foulke, Information Specialist, University of Wyoming College of Agriculture De- partment of Agricultural and Applied Economics, P.O. Box 3354, Laramie, WY 82071 Steven J. Torok, Associate Professor, University of Wyoming College of Agriculture Department of Agricultural and Applied Economics, P.O. Box 3354, Laramie, WY 82071 David Taylor, Professor, University of Wyoming College of Agriculture Department of Ag- ricultural and Applied Economics, P.O. Box 3354, Laramie, WY 82071 Ed Bradley, Professor, University of Wyoming College of Agriculture Department of Agri- cultural and Applied Economics, P.O. Box 3354, Laramie, WY 82071 Editor: Hattie Penny, College of Agriculture, Office of Communications and Technology Graphic Designer: Tana Stith, College of Agriculture, Office of Communications and Technology Issued in furtherance of Cooperative Extension work, acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Agriculture. Glen Whipple, Director, Cooperative Extension Service, University of Wyoming, Laramie, Wyoming 82071. Persons seeking admission, employment, or access to programs of the University of Wyoming shall be considered without regard to race, color, religion, sex, national origin, disability, age, political belief, veteran status, sexual orientation, and marital or familial status. Persons with disabilities who require alternative means for communication or program information (Braille, large print, audiotape, etc.) should contact their local UW CES Office. To file a complaint, write the UW Employment Practices/Affirmative Action Office, University of Wyoming, P.O. Box 3434, Laramie, Wyoming 82071-3434. Background marketing infrastructure are still being es- Bison have inseparable cultural and histori- tablished. Bison meat is marketed as an cal links with North America. Native “upscale” product, commanding premium Americans hunted bison for millennia be- prices. Bison breeding stock are also com- fore Europeans arrived. Plains Indians used manding premium prices since many bison virtually every part of the bison. Bison producers are still building their herds. meat ensured the survival of many settlers Currently, very few bison heifer calves are as they pushed west. The bison is a symbol slaughtered. not only of westward expansion, but also The budget of a lost way of nomadic life on the plains. This budget estimates the costs and returns At the beginning of the eighteenth cen- for a bison cow-calf enterprise. A note of tury, there were estimated to be between caution is in order, however: the market 40 to 60 million bison in North America. for bison and bison products is not fully Unregulated hunting reduced the numbers developed, so the prices that producers pay to only about 1,500 animals by the late for breeding stock and receive for bison nineteenth century. The last century has sold may vary markedly from the values been devoted to protecting the species used in this study. Potential producers are from extinction and to developing viable encouraged to thoroughly study their mar- herds. kets before starting a bison enterprise. The Herds grew sufficiently in size by the budget is intended as a guide only; it is not 1980s that bison meat started to be avail- representative of any particular ranch. The able for sale to the general public. The major assumptions are presented below. leanness of bison meat, combined with Stock characteristics society’s increased health awareness, helped to create the bison industry we see As their long history of survival demon- today. strates, bison are particularly well adapted to the harsh conditions of the open plains. There were approximately 107,000 head The bison’s digestive system allows it to of bison in the United States in 1997 eat some of the less desirable plant varieties (NBA-UW, 1997). Presently, the industry found on the plains. However, bison prefer is in a formative phase. Production and and perform better in areas that have sig- nificantly more grass cover (SAF, 1999). It is estimated that a mature bison cow, being a more effective feeder than a beef cow, represents 0.80AU (Animal Units) versus the 1.0AU of a beef cow (AAFRD, 1999). One AU equals the amount of feed one cow consumes in one year (NRPH, 1997). Yet it is also recommended that the stocking rate for the beginning bison breeder be the same as for cattle until the producer understands how bison use the available 1 range (NBA, 1990). For that reason, this Due to the variety of marketing strategies study uses the same stocking rate for bison employed by bison producers, it is impos- as for beef cattle. sible to reflect the entire industry structure here. This is especially true for bull calves Herd size is a difficult parameter to quan- destined for slaughter. Bison bulls are typi- tify. Since the industry is in a developmen- cally slaughtered at 18 to 24 months of tal phase, there does not appear to be a age, with some kept as long as 30 months. typical herd size. The National Bison Sur- While virtually all of the heifers are used as vey (NBA-UW, 1997) revealed there are breeding stock, there are varying strategies extremes at both ends of the spectrum, for bull calves. Conversations with indi- though there appears to be a level at which viduals close to the industry indicate that the capital expenditure for necessary there appear to be three “marketing win- equipment seems justified. This level, ap- dows” for bulls. The first is at six months proximately 100 head of breeding cows, is of age, right after the calves are weaned. used in the budget. These calves are sold to a feedlot. The sec- The budget assumes an established bison ond marketing option is to keep the bull herd where most replacements are ranch calves for another year and sell them as raised. A linear livestock flow chart was yearlings to be fed out. Finally, some pro- created in a spreadsheet to determine producers choose to feed their own bulls until duction numbers. The spreadsheet repre- they reach slaughter weight. In order to sents three years’ worth of bison produc- reflect this variety in marketing behavior, tion (three years represents the time it the budget sells one half of the bull calves takes for a bison heifer to produce a calf), at six months and the other half as year- starting with 100 head of bred bison cows. lings the following year. This means there Weaning rate is set at 85 percent and death will be less stock to feed during the winter loss at 2 percent. The portion of the chart and that less pasture will be required in the that represents year two of the cycle in- summer. The trade-off is that the producer cludes the purchase of two yearling bulls must accept less revenue for the calves than and three yearling heifers, which were pur- he or she would for the finished animal. chased to enhance genetic diversity. Herd Older (trophy) bulls do not bring as much size is maintained by selling 75 percent of in the market, but bison producers have the open cows (both classes) in the fall. been particularly innovative at marketing their products. Online offerings of steaks, jerky, sausage, robes, and skulls were en- countered in the course of research for this report. Hunting also is done on some operations to generate additional revenue. However, this enterprise budget is only concerned with costs and returns from a cow-calf enterprise. Other alternatives would require separate budgets outlining 2 Figure 1. Simplified bison production cycle. the set of costs and returns associated with Land that enterprise. The variety of bison operations varies as Since bison mature more slowly than cattle much as the methods used to market bi- and since there are no steers, some differ- son. That is, no dominant form of bison ent classes of livestock had to be added for production has yet emerged. In developing the budget (e.g. two-year-old heifers, cows this enterprise budget, it was necessary to three to nine years, cows older than 10 make a number of assumptions regarding years, two-year-old bulls, and bulls older the size of the operation, as well as the than two years). The classes used in this type and amount of land used. It is as- study are the same as used in the 1997 Na- sumed that the ranch is located on the tional Bison Survey. The weights and eastern plains of Wyoming and has an aver- prices for these classes are from the same age productive capacity of 0.32 AUM/acre source. Figure 1 shows a simplified pro- (Animal Unit Months per acre). One duction cycle for bison. The significant dif- AUM is one twelfth of an AU or the ference from beef cattle is that bison heif- amount of feed that one mature cow will ers are bred at two years of age, whereas consume in one month. The above AUM/ beef cattle are bred after one year. acre figure is considered typical for the re- gion (Bastian and Hewlett, 1996). In ad- dition, it is assumed that bison will be fed 3 for four months out of the year. The im- ing and handling equipment required. It plied acreage and associated land capacity was assumed that the enterprise requires is calculated at 6,541 acres or 2,077 one full-time employee and that the owner AUMs of range forage and 1,038 AUMs is employed one-half time in the enterprise fed for a total of 3,116 AUMs of feed re- with management duties.

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