Beef Buzz News
Profits Over Production Makes More Sense Than Ever to Rancher Kit Pharo
Wed, 29 Aug 2012 06:48:27 CDT
Ron Hays talks with Kit Pharo about profitability versus production.
Businessman Kit Pharo decided he wanted to be a rancher. He took a look at the cattle business and thought he could see how to make a profit on a ranch in eastern Colorado. He and his wife began implementing a profit-centered approach and it has rewarded their efforts.
Pharo recently spoke with Ron Hays at the Southern Plains Beef Symposium in Ardmore. He says the secret to the success of the Pharo Cattle Company is simple: it’s not just about producing quality cattle it’s about making money.
“We had been in other businesses prior to this and I knew I had some business sense and I decided the ranching was either going to make me a living or I was going to do something else. And, unfortunately, it looks to me like a lot of ranches are just a way of life. They’re not as profitable as they should be. In fact, I think most of them are break-even at best.
“So we decided to do some things differently. We didn’t want to decrease production, necessarily, but we realized that production was not the same as profit. So we started focusing on profit and realized fairly quickly that inputs or expenses played a bigger factor than production. So, if we could reduce or eliminate expenses, we could increase our profits. And that’s been very positive for us as far as the ranching business. The easiest dollar that I’m ever going to make is the dollar I don’t spend.”
For the last 40 or 50 years, the emphasis in the cattle business has been on producing every last pound of gain. Pharo says that strategy has reached the point of diminishing returns. With cattle prices being high, he says, high-producing ranches are doing well. When the market takes a dive again, as he believes it will, he thinks many ranchers will be find their operations in trouble.
Pharo’s viewpoint is echoed by Dr. Dave Lalman of OSU who wonders if we haven’t bred cows too big to make maximum profits.
“I think, yes, we’ve realized we went too far and now it’s time to turn around, and that’s encouraging,” Pharo says.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
right-click to download mp3
WebReadyTM Powered by WireReady® NSI
Repeal of WOTUS Strikes Emotional Chord with OCA's Michael Kelsey, Reflecting on Action's Significance Fri, 13 Sep 2019 11:36:52 CDT
American Angus Assoc. CEO Mark McCully Reflects on the Angus Breed's Role the Beef Industry Today Thu, 12 Sep 2019 11:49:28 CDT
Fall Looking Like a Mixed Bag for Beef - Peel Advises Producers Pay Close Attention to Market Dynamics Wed, 11 Sep 2019 10:06:31 CDT
Fall Looking Like a Mixed Bag for Beef - Peel Advises Producers Pay Close Attention to Market Dynamics Wed, 11 Sep 2019 10:04:16 CDT
Cattle Markets Not Expected to Improve as Seasonal Demand Shifts into Lower Gear Heading into Fall Tue, 10 Sep 2019 10:22:26 CDT
State Officials in Colorado Help Local Farmers, Ranchers Launch New "Better With Beef" Initiative Mon, 09 Sep 2019 11:21:19 CDT
Beef Industry Soon to Launch New Campaign Leveraging Consumer Interest in the BQA Program Fri, 06 Sep 2019 10:06:04 CDT
NCBA's Alisa Harrison Highlights the Tremendous Value Digital Marketing Adds to the Beef Checkoff Thu, 05 Sep 2019 10:27:08 CDT
Beef Checkoff Funded Research Helping to Correct the Misconceptions Surrounding Alternative Meat Products Wed, 04 Sep 2019 11:22:41 CDT
American Angus Association Rolls Out New Genomically Enhanced EPD Index Data Set Tue, 03 Sep 2019 11:02:00 CDT
USDA Working on GIPSA Rules After Courts Mandate Rulemaking Process Move Forward Fri, 30 Aug 2019 08:42:30 CDT
One Perspective on Animal ID and the Moving of the Cattle Industry Toward Electronic Ear Tags Thu, 29 Aug 2019 06:16:32 CDT
Dr. Rosslyn Biggs Beef Buzzes About Vesicular Stomatitis with Ron Hays Wed, 28 Aug 2019 14:20:06 CDT
US-Japan Trade Deal Announcement Called Huge News by USMEF CEO Dan Halstrom Tue, 27 Aug 2019 13:50:40 CDT
Placements Surprise in Latest Cattlle on Feed Report- Derrell Peel Explains All Mon, 26 Aug 2019 08:13:14 CDT
NCBA's Sustainability Guru Sara Place Shoots Down the Environmental Misconceptions About the US Beef Industry Fri, 23 Aug 2019 10:29:14 CDT
American Angus Association Rolls Out New Genomically Enhanced EPD Index Data Set Thu, 22 Aug 2019 10:49:14 CDT
K-State's Glynn Tonsor Breaks Down Cattle Market's Surprising Reaction to Tyson Packing Plant Fire Wed, 21 Aug 2019 12:07:53 CDT
NCBA's Allison Rivera Holds USDA's Dragging Feet to the Fire on FMD Vaccine Bank's Implementation Tue, 20 Aug 2019 10:12:11 CDT
USDA Program Designers Struggle to Balance Cost vs. Incentive in Promoting Traceability Participation Mon, 19 Aug 2019 11:59:48 CDT
GIPSA Rule Resurfaces as DOJ Orders Formal Rulemaking Process – NCBA Fighting for Common Sense Solution Fri, 16 Aug 2019 09:41:54 CDT
Have You Heard? Operating as a BQA Certified Producer can Command Up to $17/Head More for Your Cattle Thu, 15 Aug 2019 11:48:16 CDT
Study Shows Cattle from Beef Quality Assurance Certified Producers Command Higher Premium at Auction Wed, 14 Aug 2019 15:24:15 CDT
Tyson Packing Plant Fire Stirs Dramatic Industry Reaction and Speculation with Pronounced Uncertainty Tue, 13 Aug 2019 10:20:31 CDT
USMEF's Dan Halstrom on the Strength of US Beef Exports to Japan Despite Its Tariff Disadvantage Mon, 12 Aug 2019 12:25:23 CDT
Missouri's Meat Labeling Law Draws Backlash from Alternative Meat Proponents Fri, 09 Aug 2019 14:16:29 CDT
Fall Calf Market Expected to be Driven by Higher Corn Prices with Limited Potential for Upside Thu, 08 Aug 2019 10:01:27 CDT
Corn Conundrum Fuels Speculation About Future Profitability in the Cattle Markets Wed, 07 Aug 2019 11:54:46 CDT
WOTUS War Nearly Won as Rule's Final Repeal Expected to be Made Official This August Tue, 06 Aug 2019 12:11:32 CDT
Everything You Need to Know About Trump's Deal with the EU to Increase Market Access for US Beef Mon, 05 Aug 2019 12:18:44 CDT
Blach Says Producers Reaping the Benefits of Their Focus on Better Beef Quality for Today's Consumers Fri, 02 Aug 2019 14:09:02 CDT
CattleFax's Randy Blach Sees Industry Making "Massive Change" in How It Handles Risk Management Thu, 01 Aug 2019 11:04:24 CDT
Checkoff's Impact Continues to Climb - Study Shows Industry Receives $11.91 for Every Dollar Spent Wed, 31 Jul 2019 11:57:16 CDT
As Beef Industry Explores the Marketing Benefits of Traceability, BQA's Potential is Starting to Gain Attention Tue, 30 Jul 2019 10:17:57 CDT
NCBA President Jennifer Houston on the State of the Cattle Industry, Highlights Potential Opportunities Mon, 29 Jul 2019 12:06:11 CDT