Ranching a Great Way of Life...

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1 PHARO CATTLE COMPANY CHEYENNE WELLS, COLORADO PHONE Helping you is our business and we take it very seriously. Ranching a Great Way of Life... Fall 2012 NEWSLETTER Ranching is a great way of life, but is it sustainable? Can it produce enough income to support a growing family? Can it be passed on from one generation to the next? In recent years, there has been much talk about a concept called sustainable agriculture but most of the so-called experts fail to mention the two most important ingredients profit and enjoyment. Agriculture that is not profitable and enjoyable will never be sustainable. I am very troubled by the large number of ranchers who struggle to make a decent living. I am also troubled by the fact that the average age of ranchers is near retirement age because the next generation is not interested in coming back to the family ranch but can you blame them? They spent their entire life watching their parents work very hard for very little pay. If ranching isn t going to be profitable and enjoyable, why ranch? This is a subject I am very passionate about, but since space is limited I m just going to hit a few high points. I challenge you to make ranching more than just a great way of life. 1. Profit and enjoyment are attainable. I know many ranchers who have both. While some have inherited a family ranch, others have done it entirely on their own. 2. Success seems to be more a matter of attitude than anything else. Those who are open to change and not afraid to think outside-the-box are most likely to succeed. On the other hand, those who like to blame everything on everyone else will seldom succeed. 3. Successful ranchers work smarter, not harder. Although they enjoy riding a horse and driving a tractor, they always set aside time to drive the desk. 4. Profitable ranchers make efficient use of the ranch s available resources. Instead of investing in the latest gadget or piece of equipment, they invest in workshops and courses that teach them how to make the most efficient use of what they already have. 5. Successful ranchers observe and imitate nature. Going against nature always requires more money and more labor (less profit and less enjoyment). 6. Production and profit are not the same thing. In fact, they are often antagonistic toward one another. It s ironic, but many ranches that were put together and paid for with 350 pound calves are now struggling and going broke with 600 pound calves. Increasing total pounds per acre is much more profitable than increasing pounds per calf. 7. Successful ranchers know who to listen to. We ve been taught by the so-called experts how to maximize production (weaning weights), but few are teaching us how to maximize profit and enjoyment. Who do you think pays for all the so-called free magazines you receive? Unfortunately, many ranchers are doing everything right (according to the so-called experts ) but they are not doing the right things. 8. Profitable ranchers have a much lower cost of production than most ranchers. Their breakeven price is so low they have a huge competitive advantage over their neighbors who are still trying to increase profits by weaning bigger and bigger calves. 9. The most profitable ranchers are selling a product instead of a commodity. They control their markets. Time spent on marketing can pay dividends ten times greater than time spent on production. 10. The easiest way to adapt to change is to create it. Successful ranchers chart their own course. They will do whatever is required to make their ranch profitable and enjoyable.. 1

2 Whenever you find yourself on the side of the majority, it s time to pause and reflect. ~ Mark Twain ( ) ~ TWO FALL BULL SALES st Riverton, WY Thursday, Nov. 1 th Burlington, CO Monday, Nov Bulls Developed on Grass Afforda-BULL prices Volume Discounts Large Selection Angus, Red Angus and Composites Guaranteed Calving Ease FREE and Very Afforda-BULL Delivery Call or to receive a Sale Catalog THE PHARO CATTLE COMPANY NEWSLETTER Published four times per year by: Pharo Cattle Company County Road Z Cheyenne Wells, CO Editor: Kit Pharo Phone: Kit@PharoCattle.com Website: Our Mission: To help ranchers put more fun and profit into their business. Call or for a Free Subscription Low-Maintenance Cattle... The reason our cattle work so well, even under extremely adverse conditions, is because they have been bred and selected for over 25 years to do the most for the least. They do not require much (if anything) in the way of outside inputs. Over 95% of the grass-developed Angus bulls we will be selling in our fall bull sales have a Maintenance Energy EPD that is in the top 10% of the entire Angus breed. Where else can you find genetics like this? With the expanding drought, producers everywhere have discovered that not all cows are created equal. Some are able to do a whole lot more with a minimum amount of forage resources. We invite you to come see what our cows are doing in these tough times. I m sure you will be impressed. There really is a difference! Our genetics have been proven to do the most for the least in many different environments. Pharo Cattle Company has cooperative herds from Minnesota and Ohio to hot, humid fescue country in Missouri all the way to the high-plains desert. We also have cooperative herds on the central plains of Texas all the way to high-elevation ranches in the northern Rocky Mountains. The current beef industry was built on cheap grain and cheap fuel. Folks, that era is over and will never return! As the cost of land, fuel and feed continues to increase, you will eventually be forced to produce cows with much lower maintenance requirements. Why not get a head start on everyone else? 18-Month-Old Bulls Developed on Grass An all-grass forage test quickly separates the men from the boys. Forage-Tested Bulls Our forage-tested bulls are developed on grass. They have never been shut up in a corral, and they have never been fed any grain. 2

3 Love Being a Grandpa... Bull Workdays Drought Map Discount... Deanna and I love being grandparents. Living so close to Braylee is a GREAT blessing. Our daughter, Jessica, will soon present us with another granddaughter. That ll be two in one year. You won t find anything like this anywhere else. Pharo Cattle Company likes to find unique and different ways to help our customers. This drought has been tough on a lot of people in a large area. Because we understand the situation, we want to provide some encouragement, as well as some monetary assistance. With YOU in mind we will be offering a Drought Discount at both of our fall bull sales. You can receive up to a 10% Discount on all the bulls you purchase based on the severity of the drought in your area. This is our way of helping you make the best of a bad situation. NOTE: This is NOT the time to get out of the cow-calf business. When it rains (and it will) we will be rewarded with the VERY BEST of TIMES! Because cow numbers continue to decrease, we will probably see calf prices higher than we ever thought possible. When the going gets tough, the tough get going and keep going. Our Drought Discount will be based on the U.S. Drought Monitor Map. It shows five levels of drought from Abnormally Dry to Exceptional Drought. Each level of drought is worth a 2% Discount. Based on the current map, I would estimate that over 90% of our customers are in the three highest levels of drought. If they are still in those levels when the map is updated on October 23 rd, they will qualify for a 6, 8 or 10 percent discount. We will share a link to the U.S. Drought Monitor Map in our weekly PCC Updates. 3 High-Altitude Bull Sale... For the first time ever, Pharo Cattle Company will be offering 55 low-maintenance, grass-developed bulls that were developed on a high-elevation ranch in Western Wyoming. These bulls have all been PAP tested and will be guaranteed to work well on highelevation ranches. Our High-Altitude Bull Sale will take place in Riverton, Wyoming, on Thursday, November 1 st. Call or to request a sale catalog. For those who do not ranch in highelevation country, this sale will be broadcast over RFD TV and the Internet. Delivery will be provided to all of our pre-established bull delivery points. Bulls that work well at high elevations will work even better at lower elevations. According to Dr. Tim Holt highaltitude (brisket) disease is no longer just a problem for high-elevation ranchers. I was surprised to learn that it recently surpassed respiratory diseases as the number one killer of cattle in Nebraska feedlots. As you might expect, cattle with high pulmonary artery pressure (PAP) will also have reduced levels of performance and fertility. While PAP testing our bulls, Dr. Holt told us the average failure rate for an Angus or Red Angus herd is 33%. Our failure rate was only 18%. That is almost twice as good as the average herd. Though the fig tree does not bud and there are no grapes on the vines, though the olive crop fails and the fields produce no food, though there are no sheep in the pen and no cattle in the stalls, yet I will rejoice in the Lord, I will be joyful in God my Savior. The Sovereign Lord is my strength; He makes my feet like the feet of a deer, He enables me to go on the heights. Habakkuk 3:17-19

4 Low-Maintenance Grass-Developed Bulls keep going, and going, and going... and going, and going, and going, and going... Pledge Johnny B Good Tough Times won t last but Tough Bulls will All of the bulls we have purchased from you are still going strong. The oldest two are coming nine years old. (Eddie Abraham Texas) The grass-developed bulls I purchased from you are great! During an extreme drought, they gained weight. (Dan Flitner New Mexico) You said your bulls could gain weight during their first breeding season and they did. That s why we keep coming back to your sale. (Larry Gilstrap Colorado) The 12 bulls we purchased from you are very aggressive breeders and they held their condition better than our older bulls. (Ed Weppner Wyoming) My forage-tested Pharo bull is able to stay fat on nothing but grass. (Keith Boulden North Dakota) 4

5 We have purchased 45 grass-developed PCC bulls over the years, and none of them lost weight during their first breeding season. They stay fat year-round. (Grover Thompson Nebraska) My Pharo bull has survived the drought quite well. I am very impressed with how he continues to put on weight and condition. (Bob Arntz Missouri) I just sold my first PCC bull at age 12. He bred around 50 cows every year and always stayed in great shape. (Dan Temaat Kansas) After a severe winter, our Pharo bulls are in much better condition than our other bulls. From now on, we will use nothing but Pharo bulls. (Gary Howie South Dakota) We put our new PCC bull in with our heifers and he bred 47 head in 21 days all by himself! (Kathy Kissack Wyoming) I couldn't agree with you more about PCC bulls being able to breed more cows for more years than other bulls. I put my two grass-developed bulls out with 60 to 70 cows each and they did great! (Delvin LaDuke North Dakota) The ability of your bulls to breed a large number of heifers in a short period of time has greatly improved my profitability. (John Nino California) Your bulls have proved themselves so well that we have been able to reduce the total number of bulls we use by 17 bulls. (Jim Espy Wyoming) I put our newest forage-tested PCC bull out with 60 heifers, knowing he wouldn t settle all of them. He settled 59 of the 60 while gaining weight! (Howard Knuppe South Dakota) 5

6 Guaranteed Calving Ease... Most of our bulls can safely be used on heifers. Many will be guaranteed for calving ease. Profit always begins with a live calf. Fall Sale Advantages You may have a springcalving cowherd and prefer to buy your bulls in the spring. However, there are some BIG advantages to buying your bulls at one of our fall bull sales. Fall is the best time to move cattle from one environment to another especially if you re moving them south and/or east. Unlike most young bulls, our grassdeveloped bulls do not require much in the way of winter feed and care. In most cases, we recommend you run them with your older bulls. Most spring-calving producers have more time to select and purchase bulls in the fall than they do in the spring. These bulls are 18 months old going on two years. We expect them to breed more cows for more years than bulls coming out of other programs. Thickness and fleshing ability have been bred into these bulls NOT fed in. Because the drought has reduced the demand, we will be offering fewer bulls and we will be lowering our base prices. This should provide an opportunity to purchase top-sort bulls at lower than normal prices. If you need to buy something for yearend tax purposes, it makes more sense to buy bulls than it does to buy equipment that depreciates and burns expensive fuel. Talk to your tax advisor about the Section 179 Expense. Want a Catalog? Call or send an to Bulls@PharoCattle.com with Fall Sale in the subject line. Can t make the sale? Request a catalog and take advantage of one of our three Stay-at-Home options as well as our bull delivery service. How Big is Big Enough? Many ranchers claim they have 1100 pound cows that is, until the cows are sold. At that point, the cows will usually weigh between 1200 and 1800 pounds. I like to check out cow weights when I read market reports from various livestock auctions around the country. The average cow weight at a recent sale in South Dakota, for example, was 1480 pounds with a range of 1180 to For what it s worth, the 1180 pound cow was owned by a PCC customer. Cow size has increased dramatically during the last 40 years. Since big cows eat substantially more than small cows, this has forced most ranches to destock and/or to increase supplemental feeding. With the cost of feed as high as it is, it is quickly becoming less and less profitable to own those big, highmaintenance cows. Average Average Percent of Cow Cow Wt. Weaning Wt. Wt. Weaned Table 1 K. Ringwall, 2008 Beef Talk. Dickinson Research Extension Center at Dickenson, North Dakota Since smaller cows are able to wean a higher percentage of their own weight, they will always produce more total pounds and more total profit than big cows with the exact same inputs. To add insult to injury, there is evidence (see above) that smaller cows will actually wean bigger calves than big cows in a real-world, unpampered environment. Your ranch can only support so much growth, milk and size. Once you go beyond that level, you ll have to provide heavy supplementation to meet the needs of your big, highmaintenance cows. Without supplementation, your weaning weights and conception rates will suffer. Like begets like! It shouldn t surprise you that most of the Angus, Red Angus and Hereford bulls being sold today were produced by 1400 to 2200 pound momma cows that must be pampered to stay in production. What size and type of cows will those bulls produce? 6

7 NO Fat Bulls NO Pampered Bulls NO High-Pressure Are you tired of buying over-fed bulls from pampered seedstock herds at hyped up, high-pressure auctions? Our bulls were produced by some very efficient, moderate-sized cows that have never been pampered. They have been developed slowly and naturally on grass. They will NOT melt or fall apart when you take them home. These 18-month-old bulls will be presented and sold in their work clothes at our unique, low-pressure Cowboy Auction. Chance to Win... We will have a drawing at both of our fall bull sales and give away a $1200 STAFIX 36R fence charger with remote control. You must be present to win. The lot number of each and every bull you purchase will be placed in the drawing. If you purchase three bulls, you will have three chances to win. Information You Can Use... In addition to the usual EPDs, Weights and Ratios, we evaluate and score all of our bulls for: Disposition Calving Ease Fleshing Ability Longevity Thickness Low Maintenance Muscling Hair Coat Masculinity Fly Resistance We also provide an Udder Score for the dam of every bull. We use a 1 to 5 star rating for all of these traits with 5 stars being the best. As if that wasn t enough, we provide Ultrasound Data on each bull so you know what he looks like under the hide. Considering the way our bulls are developed, I think you will be very impressed with this information. Our bulls have what it takes to produce a very desirable end product with or without grain. NO ONE else in this business provides you with as much useful information as we do. To help you utilize this information, we created a unique computer Quick Sort program that can sort and resort bulls to match your exact specifications in just a matter of seconds. If you don t have a computer, we would be glad to do the sorting for you. NOTE: Even if you do have a computer, we d like to help you get started using our Quick Sort program. 7 This is the same fence charger that we have been using at PCC Headquarters. As far as we are concerned, it is the best one on the market. It is capable of energizing 200 miles of fence. Being able to turn the energizer off and on from a remote location is a GREAT feature. My good friends at PowerFlex Fence in Missouri donated a major portion of these prizes to PCC. For all of your fencing needs, go to: PCC Updates... We send out weekly PCC Updates via . If you are not receiving our weekly s, you are missing out on a bunch! We are able to share a tremendous amount of pertinent information and ideas in our weekly s at no cost. We are also able to share noteworthy thoughts from many other people at no cost. If you are not already receiving our weekly s, send your request to Tammy@PharoCattle.com. If you like our newsletters, you ll love our s. DON T WORRY we will continue to mail you a hardcopy of our newsletter.

8 PHARO CATTLE CO. PRSRT STD County Road Z US POSTAGE PAID CHEYENNE WELLS, CO PERMIT NO. 28 Grand Island, NE PHONE Kit@PharoCattle.com Deanna@PharoCattle.com Tyson@PharoCattle.com WEBSITE ADDRESS SERVICE REQUESTED Cowboy Logic: "If you re doing what everyone else is doing, you will never be better than average. Dealing with Fescue... Endophyte-infected tall fescue is a cool season grass that provides the primary ground cover on over 35 million acres in the United States. For the most part, fescue can be found from eastern Kansas and Oklahoma all the way to the east coast. Cattlemen consider it to be both a blessing and a curse. It can be a great forage resource for fall, winter and early spring grazing but it can cause major problems for animals that have a low tolerance for the alkaloid toxins produced by the endophytic fungus. Pharo Cattle Company has many customers who live in the fescue belt, and we understand that it takes a special animal to excel in that environment. We have five cooperative herds that are producing bulls for us in fescue country. The primary reason we give our bulls a score for hair coat is because we know there s a very high correlation between a good hair coat and fescue tolerance. We will provide hair coat scores for all of the bulls selling in both of our fall bull sales. 8 PHARO CATTLE COMPANY Efficient, Easy-Fleshing, Moderate-Sized, Low-Input, Grass- Based Genetics with Calving Ease Call or to request a Catalog for our Fall Bull Sales Bulls@PharoCattle.com