Profit Points

Where The Dollars Are

Ralph Pelaez (right) and daughter, Stephanie Pelaez Fowler, believe a focus on profits helps keep a ranch sustainable for the next generation, in this case, McKinley.(Progressive Farmer photo by Becky Mills)

Ralph Pelaez and daughter, Stephanie Pelaez Fowler, cherish their time on their Okeechobee, Florida, operation, especially when Fowler's 2-year-old son, McKinley, is in tow. But, make no mistake, this ranch is a profit-oriented business.

"We have to be profitable," Pelaez says. "This family lives off agriculture exclusively."

The 2,400-acre ranch was founded in the 1950s, when Ralph's father, Abel Pelaez, came to South Florida from Colombia. While it takes a number of factors to keep this operation in the black, these six are always top of mind.

1. Reproduction. Without a doubt, herd reproduction is the most important thing on the Pelaez agenda. "We have to have a high percentage of cows weaning a calf," Pelaez says, noting that number is currently 86.2%. Mature cows average a 93 to 94% conception rate after a 75-day breeding season, heifers an 89 to 92% rate on a 105-day breeding season.

"Cows that are only breeding 75 to 85%, that's a killer," he continues. "There are people who keep them for another year and re-expose them, but we don't. We cut our losses." They will, however, move an open cow from the fall- to the spring-calving herd. It's a one-time thing. After that, if she's open, she's gone. And, they won't keep a heifer calf from her as a replacement.

There are equally high standards for yearling heifers. Only those females that become pregnant the first 60 days of the breeding season stay. Others are sold as bred.

The high reproduction rates are built on a strong nutritional foundation. "We don't cut corners on nutrition," Pelaez says.

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For around 120 days during calving and breeding season, Pelaezes supplement their bahiagrass, star grass and Floralta hemarthria pastures with a home-mixed ration of citrus pulp, cottonseed meal and corn gluten feed.

"We monitor their body condition and adjust up or down, as needed," he adds. For yearling and first-calf heifers, they want an average body condition score (BCS) of 6.0. For mature cows, they strive for a BCS of 5.0 to 6.0. To ensure first-calf heifers stay in acceptable body condition and breed back on schedule, their calves are weaned early—at around 75 to 105 days.

"We've been doing this for quite a few years," Pelaez says. "The calves do quite well, and the heifers breed like nobody's business." He says the heifers start cycling and usually breed within 30 days after their calves are weaned. Normally, they have a preg rate in the high 90s.

Those early-weaned calves go on a 20% protein ration of soybean meal, citrus pulp and corn gluten, developed by John Arthington, director of the University of Florida Range Cattle Research and Education Center, in Ona. Pelaez calls the conversion "terrific" and says they will ship those calves in the summer, normally earning a $5-per-cwt bonus because they are weaned.

2. Genetics. The right genetics play a tremendous role in profitability. For the Pelaez family, that means Brangus.

"We've been breeding our cows to Brangus bulls for 25 years," Pelaez says. "My dad was a wonderful cattleman and my first teacher. Brangus stabilizes the percentage of Brahman and Angus in a fashion that is friendly for us and simplifies our breeding program. It gives us a female that is adapted to our environment and a product that works for the consumer. It is also composite so we're getting a little hybrid vigor."

Bull selection is another area where Pelaez doesn't cut corners. His selection process is rigorous. "Once we get a sale catalog, we look at the bulls whose EPDs [expected progeny differences] meet our requirements. We make a spreadsheet, then do a visual appraisal."

Pelaez adds they don't emphasize any one particular trait. In general, they want below-average birthweights, average milk production and a lot of weaning and yearling weight. With carcass traits, they look for above-average marbling and a minimum of 1.1 square inches of rib eye per 100 pounds.

There is a price to placing such a high emphasis on bull genetics. Pelaez says they usually have to spend the equivalent of five or six steer calves for one bull.

3. Animal Health. Putting special emphasis on keeping death-loss numbers low is an obvious boost to the profit side. Pelaez says they supplement first-calf heifers daily during calving and breeding season, and watch closely for any stragglers. Help is immediate if they find a heifer having trouble calving or a sick calf.

Strict management and vaccination protocol for calves is followed. Cows are vaccinated against trich (trichomoniasis), vibrio (vibriosis) and lepto (leptospirosis). When calves weigh around 250 pounds, they are given a modified live virus (MLV) vaccine against respiratory diseases, an eight-way blackleg plus somnus vaccination, dewormers and implants for steer calves. In addition, heifer calves are vaccinated against lepto. Calves get a second round of vaccinations 30 days later, at which point Pelaez likes to use an MLV vaccine from a different manufacturer. "We hope those labs use a slightly different culture, and this will provide additional protection," he says.

4. Limit Full-Time Labor. Pelaez and Fowler run a bare-bones operation regarding labor. They have one full-time employee and rely on contract labor whenever possible. That includes labor for fencing, spraying, fertilizing and cow work.

5. Power Of The Group. Pelaez and Sons is part of Florida Heritage Beef (FHB), a group of central- and south-Florida ranchers that pool calves for sale. Flint Johns, FHB chairman, estimates the negotiated contracts during the last five years earned members more than $5 per cwt above comparable cattle sold on video or internet auctions.

Pelaez adds they get performance and carcass data by the pen through the arrangement. The last three years, calf-fed feeder heifers from the ranch averaged a dry matter conversion (DMC) rate of less than 6-to-1. The percent Choice and Prime averaged 71 to 89%, with weights ranging from 1,172 to 1,206 pounds.

6. Keeping Count. Few producers will get excited about a good set of records, but when it comes to profitability, the Pelaez operation makes this a priority.

Proof of his diligence is Pelaez and his daughter's participation in the Academy of Ranch Management, sponsored by the University of Florida College of Veterinary Medicine. It provides participating ranches with a management-information system that calculates Key Performance Indicators (KPI). One KPI used in class is pounds of calf weaned per cow exposed. At Pelaez and Sons, it's 524 pounds -- well above the target of 460 pounds.

(AG/SK)

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