Grasslands Update: Meet the Ranchers

 

Meet the Ranchers of Grasslands

 

June 2011--Meet the Grasslands Ranchers, our second installment of the Grasslands Story, a project of the Capital Lab's Field Guide to Investing in a Regenerative Economy, illuminates the talents and eloquence of our growing family of Grasslands ranchers. Here they talk about what inspires them and what they struggle with in their daily lives, their insights into holistic management, and their understanding of how their work is contributing to the healing of the land and the rural communities in which they live.   The Grasslands photographs that illustrate this update were taken by Capital Institute Fellow David Nicola on a recent visit to the South Dakota and Montana ranches. 

Reflections on Investing in Grasslands from Capital Institute Founder John Fullerton

As an "impact investor," one of the true and unanticipated delights that has come with our association with the Savory Institute and our management team led by experienced Holistic Management practitioner Jim Howell has been the amazing quality of the people the project has attracted.  A "cowboy ethic" is still alive and well in America, and no doubt throughout the world. It is a combination of the salt of the earth values of integrity, fairness, and hard work, combined with an enlightened ecological awareness and commitment to care for the land and the wildlife.  Some prefer the term "pastoralists," the vast grasslands equivalent of the permaculture farmer.  

As you will see from the comments below, Grasslands is building a team of truly great people making it happen every day on the ground.  Some quite young, some less young.  Like we see with the new breed of organic farmers, there is great hope in the enthusiasm of the next generation to be smarter than us old folks.  Such hope is made a reality by our young team working on Grasslands ranches this summer.  I imagine this can be true in finance as well some day, when finance rediscovers its proper purpose in the economy.  This is likely to come with the next generation as well, rather than from mass epiphanies in the old guard.  

I consider it a real privilege to know my Grasslands colleagues, and to have the opportunity to work with them and learn from them in the years to come.  And I don't just mean learn about managing cattle!  This is the kind of "value" that does not show up in the quarterly statements of one's investment portfolio.  By connecting one's investments with, and in the process building life experiences and careers for, real people doing real wealth creating work connected to the land, an investor experiences a profoundly different meaning in the word "value" than experienced when simply picking a clever hedge fund to invest in.  This is what we mean by the "purpose of capital" at Capital Institute.   -- John Fullerton, Director, Investor, Grasslands, LLC

 

A LOOK BACK ON THE FIRST YEAR OF GRASSLANDS

The “Grasslands” field study focuses on a new, triple-bottom line custom grazing business operating in the Great Plains.  Owned jointly by the Savory Institute; Armonia, the family office of Larry, Tony, and Michael Lunt; and John Fullerton's investment firm Level 3 Capital, the intention of Grasslands is to build a business that generates real wealth over the long term--a solid financial return to investors, meaningful employment in rural communities, abundant, high quality food and fiber--while healing grassland on a vast scale through the implementation of holistic management practices.

At the time we posted our first Grasslands field study in December 2010, Grasslands LLC managed 14,000 acres of South Dakota pastureland (the BR and Horse Creek ranches) acquired by Armonia and Level 3 in April 2010. The start-up had not been able to achieve the critical mass of grazing cattle required to meet all of its financial targets, both due to the late start in the season, and its lack of a track record with potential local custom grazing clients.  Grasslands ranch managers were also riding a steep learning curve as they worked to be better attuned with the unique forage characteristics of their newly acquired properties.

In late 2010, Grasslands was also seeking, as a triple bottom line enterprise, to incorporate monitoring protocols that would objectively measure its financial, ecological, and social progress. Grasslands also planned to acquire additional properties to achieve scale and create diversification so that it could prove its model in other locations. The hope was for its ranches to include a balance of both growing season and winter country allowing cattle to be grazed year round. The longer-term goal continues to be to build a production model that will take ecologically enhancing cattle, harvested directly off of biodiverse, native prairie, all the way to the final consumer. Grass-fed beef build ecoystem resilience, creating a model for grasslands management practice throughout the world.

GRASSLANDS TODAY

Much has happened at Grasslands since our first field study was published 6 months ago.  In early 2011, Grasslands purchased a 38,620-acre ranch on the southeastern plains of Montana to add to the Grasslands LLC managed portfolio.    Eighty five hundred acres were deeded properties, and 30,120 acres were public Bureau of Land Management and state grazing lands (officially known as Montana State School Trust Lands).  Named Cinch Buckle, due to the unique shape of the property, this ranch sits on the border of Powder River County and Carter County, roughly 27 miles due east of Broadus, MT. 

The addition of the Cinch Buckle property enabled Grasslands, LLC, to fulfill three strategic goals: to scale its impact in the Northern Great Plains, incorporate a landscape with different characteristics and challenges, and grow the team of holistic ranch managers.   The Cinch Buckle Ranch sits in an important wildlife area known for Pronghorn Antelope (the world’s fastest land mammal), mule deer, vast numbers of birds, and other important species.  The Ranch is already in good ecological condition, but the application of holistic management will serve to increase biomass and biodiversity, improve the hydrological cycle, and boost the ecological capacity of the land.    With the purchase of the Cinch Buckle Ranch by Armonia and Level 3, Grasslands now manages close to 54,000 acres  in the Northern Great Plains.  Thirty one hundred grass yearlings, 1520 heifers being bred for replacement stock, 1440 cow/calf pair, and about 80 bulls, for a total of about 6140 head of cattle graze on the land (not to mention three goats, 30 horses, and several dogs!). All 3 ranches are stocked to capacity this year with a few new cattle traders eager to get their cows fed through Grasslands’ holistic management process. 

Zachary Jones, Grasslands’ Northern Great Plains Division Manager, reports that the financial value of the animals grazing on the Grasslands properties is now calculated at approximately  $7 million dollars and the three Grasslands managed ranches now represents nearly $8 million in assets under management. “The relationship with our custom grazing clients is a significant one,” Jones explains, “they carry the cost of significant capital, assume risk, and manage the vagaries of the livestock markets.  Grasslands, LLC focuses on the management of the ecological resource, the crew to manage and live off them, animal care,  the relationship with the grazing clients, and the financial integrity of the land asset and its activities.”      

At the end of the 2010 growing season, Grasslands, LLC ranches in South Dakota had shown improved biomass and biodiversity and the hope is to replicate this trend across all 54,000 acres in 2011.   Although Jones reports that the increase in biomass and biodiversity on the South Dakota ranches has not yet been objectively quantified, a species of grass, Canadian Blue Grass, has proliferated on the Horse Creek ranch this year and anecdotal observation bears out that forage quality is better than last year.  “Last year we consumed  ‘old’ grass which has  ‘freshened up’ the available forage for this year,” says Jones, “Think of eating the leftovers in your fridge up before you make a fresh meal!”  

Jones also notes that because Grasslands’ stocking rate last year was very light in relation to forage available, as it took time to convince ranchers to trust their cattle to holistic grazing practices,  the impact and results on forage compared to the previous year has been modest relative to the potential looking forward.

Jones maintains, however, that the biggest gains for Grasslands over the past year have been in knowledge and understanding of the ranchlands themselves.   “We know what's over the hill, how the streams behave, what reservoirs hold up well, what paddocks provide better and/or worse quality (in context to all paddocks), how our labor could better be deployed,” he reports.

Zachary Jones Talks About the Financial Payoffs of Holistic Management

“In practice, Holistic Planned Grazing confirmed that our initial stocking rate assumptions were very close to being on target.  This changed the "nature" of the business because we are indeed able to run the animals we anticipated, which, when calculated, is resulting in 2 to three times higher stocking rates than historical stocking rates on this land.   Also, we have holistically based ecosystem processes monitoring in place, which will allow us to measure longer term trends (looked at objectively every few years).  Furthermore holistic management and the decisions we made helped us place a good crew with a high level of ownership on our ranches. 

“When you create a Holistic Financial Plan every expense and income decision is made with reference to the ranch’s Holistic Goal.  And, profit, or DCF, is withheld after you figure up your gross profit (income minus cost of revenue available to cover overheads) before you determine your expenses.   Planning profit before expenses helps prevent expenses from eating away all your profit—simple but difficult! 

“The Holistic Financial Planning process allowed us to create an appropriate financial plan for BFLL that only requires 38 percent of gross revenue to cover direct and overhead costs, including management fees.  Sixty two percent of gross revenue is therefore available for investment back into the ranches and as distributable cash flow. Expenses to run a ranch hovering at around 37% of gross revenue is very difficult in a "conventionally" managed ranch given high costs of fuel, harvested animal feed, equipment, other repair and maintenance, and labor per unit costs.  Holistic management allows us to manage in a financially superior manner.   

“What’s more sound holistic management and the hard work of our crew and management team motivated the cattle owners that grazed our ranches last year not only to come back again this year, but also to increase the number of head they brought to us by 50 percent.  That's a cumulative, real-world, observable data point.”

Addressing Public Policy Roadblocks with Triple Bottom Line Payoffs

As Grasslands expands further into the Great Plains the business anticipates acquiring leases on more Bureau of Land Management and State School Trust Lands.  This is both the nature of the business, given the scale we intend to operate at, but also represents a strategic necessity in order to influence public land management policy.    BLM and state land leases come with close restrictions on the number of cattle that can be grazed per acre due to the conventional wisdom that cattle are "the problem" due to over grazing. These strictures inhibit the HM business model, which because it restores biomass so effectively, makes it possible for more head of cattle to be profitably and sustainably grazed per acre, and for ecosystem resilience to actually be enhanced in the process.  Happily, Grasslands is already making considerable headway in convincing public authorities of the virtues of Holistic Management, as this story related by Zachary Jones illustrates…

“A group of about 35 Montana School Trust Lands officials came to my family's ranch, Twodot Land and Livestock, south of Harlowton, Montana, at the end of May 2011.  Their purpose was to see a holistically managed ranch and observe the effects and ecological benefits said management have on State Lands. They were also curious about the social and financial dynamics.  They said there are three types of lessees:  (1) really bad ones that hammer the resource and don't respond to communication; (2) decent managers that ebb and flow, some good, some bad, and (3) outstanding ones, good for all dynamics, and role models.  From their observation of our family ranches they are seeing Holistic Management, properly practiced, as being able to shift more producers to category number 3.  

“What’s more, if holistic management can indeed increase stocking rates while maintaining and paradoxically increasing the ecological integrity of the resource, then increasing stocking rates makes complete sense to Montana State Lands. That’s because the more animals their lands, managed by lessees, can sustainably/regeneratively graze, the more revenue they generate to help pay for the operation of public schools across the state.  And, they want hunters, recreationalists,and conservation groups to be happy too.  (Good management of the land benefits wildlife populations in a big way.   Therefore, there’s more wildlife to hunt and observe. ) And they want to be happy themselves.  And, they want the ranchers (the lessees) to be happy too.   It's actually a really simple situation-- we have to manage for what all want and in this case we all want the same thing (sound triple bottom line profit); we just need to agree on the means to achieve it, and ranches like Twodot and now Grasslands, with holistic management, can be a unified voice in the dance.”

The Grasslands Ranchers Share Their Stories

Colin Boggess, BR and Horse Creek Ranches, Newell, South Dakota

I first became interested in “Holistic Management” upon hearing Ian Mitchell-Innes speak at the Virginia Biological Farming Conference back in February 2010. However, I have been living within the general paradigm and philosophical framework of holism and interconnectedness for much longer, since the age of 17.  But after hearing Ian speak, I decided that I wanted to work with my friends at Mountain Run Farm, a 1000 acre ranch practicing Holistic Management in my home county of Bedford, Virginia. While there, I assisted Ranch Manager Ben Coleman with the High-Density “Mob Grazing” of his 400-head cattle operation. We moved the herd 1-2 times/day, with pasture sizes averaging around 4-5 acres (approximately 80,000-120,000 lbs. of animal per acre). I also co-managed Mountain Run’s pastured poultry operation of 1200 meat chickens, 100 turkeys, and 60+ laying hens. In my free time, I grew a garden, hand-milked the Coleman’s family Jersey cow, got up firewood, planted trees, and tended to the pigs.

I had a fantastic year at Mountain Run Farm, but after hearing Fred Provenza speak at a forage and grasslands conference in February, I decided that I wanted to be part of a much larger project. I researched dozens of ranching opportunities but settled on the Savory Institute upon reading Jim Howell’s book and exploring the Savory Institute website. And I sure am glad that I did! The potential of the Grasslands project to change the world simply astounds me, and I cannot think of any other opportunity that would better fulfill my need to both pursue my passion and offer valuable service to the world. I am truly honored.

Just to communicate the general spirit with which I pursued this position with Grasslands, here’s an excerpt from my response (March 5) to Jim’s email describing the internship:

Let me start out by saying that you have not scared me off. In fact, I am even more excited and intrigued than I was before. This is exactly the kind of opportunity that I have been hungering for and dreaming about. That “slowly building fire in your gut” that you alluded to perfectly epitomizes the way I feel. I have been ruminating on dozens of potential next steps throughout these winter months, but none resonate so deeply and on so many levels as this one.  I want so much to work with and learn from the Savory Institute, and I am willing to go anywhere and do anything for that opportunity. I know it’s not Virginia – I know it will be neither easy nor comfortable. Quite frankly, that only makes this internship even more appealing to me, for I know that it is under the toughest, most testing conditions that I grow the most and feel the closest to myself and my purpose. I’m ready to step outside of my comfort zone. I’m ready to be challenged. I want to stretch until it hurts.

The biggest ecological challenge that I’ve faced here at the BR Ranch is the trampling of our forage, the inevitable result of saturated soil and pacing yearlings.  Yearlings always tend to pace incessantly, but this behavior is exacerbated in the event of high rainfall, high winds, or any other environmental stressor. Although this trampling effect has compromised both the quality and quantity of this year’s available forage, it will undoubtedly have immense long-term benefits, due to the sheer amount of organic matter – and kinetic energy!! – that was incorporated into the soil.

Fortunately, BR’s biggest social challenge doesn’t involve our custom grazing clients, or our neighbors, or even the BLM. It does, however, involve me. While I believe in the Grasslands project and its unprecedented potential to change the world, I struggle every day with the nature of my involvement. I DO want to live and work on the land – to serve the earth-- but I also want to live and work amongst people – to serve my human community. It is within this context that I truly come alive and into alignment with my passion, my gifts, and my purpose.

These are simply the BR’s two BIGGEST challenges. There are, however, innumerable other challenges: extreme weather, long hours, hazardous work conditions, All Terrain Vehicle issues, quantity and functionality of fencing materials, etc.

Although few in number, my connections with our neighbors have been fun and good-hearted. I recount one of these experiences (with neighbor Gary Donahay) in a blog posting titled “A Social Sunday.” Another good connection was with Will Lindsey, my neighbor just across the county road. Will, 24 years-old, is the sole manager of his family’s 50,000 acre ranch; he assumed this daunting responsibility following his father’s sudden death in 2009 of a heart attack. Will is currently continuing the “traditional” practice of set-stocking, but he certainly understood and resonated with the ideas of Holistic Management that I shared with him. He even commented that he’d like to try splitting up one of his big pastures this summer.

Just to give you a better idea of who I am and what I’m passionate about, here’s a list of some of my interests: Holistic Land Management, Permaculture Design, Transition Towns, Indigenous Skills & Lifeways, Nature Observation, Ethnobotany, Wildcrafting, Herbalism, Foraging Wild Plants, Seed Saving, Cooking, Nutrition, Animal Husbandry, Hand-Milking, Line Breeding, Low-Stress Livestock Handling, Value-added Animal Products, Natural Building, Homesteading, Ecovillages, Appropriate Technology, Fermentation, Brewing, Fungi Cultivation, Horsemanship, Animal Power, Nonviolent Communication, Consensus Decision Making, Inter-Disciplinary Dialogue, Community Organizing, Public Networking, etc.

And here are some quotes that I carry inside always:

  • "Whatever your hands find to do, do it with your might."
    - Ecclesiastes 9:10
  • "Until you do what you believe in, you don't know whether you believe it or not."
    - Leo Tolstoy
  • "Don't do what you think the world needs. Do what makes you come alive. Because what the world really needs is people who are alive."
    - Howard Thurman
  • "Once you have glimpsed the world as it might be, as it ought to be, as it’s going to be (however that vision appears to you), it is impossible to live compliant and complacent anymore in the world as it is."
    - Victoria Safford
  • ‎"Those who bring sunshine into the lives of others, cannot keep it from themselves." -- James M. Barrie
  • And my own personal mantra: Find your passion and your path will find you!

Brandon Dalton, BR and Horse Creek Ranches, Newell, South Dakota, and Management Consultant

My initial interest in Holistic Management stemmed from my training as a biologist, seeking ways to attain true sustainability on western rangelands.  My father-in-law was managing a 30,000 acre ranch using Holistic Management Planned Grazing, and achieving eye-opening results in terms of land health and wildlife, all while substantially increasing stocking rates and improving the financial picture of that ranch.  My passion for conservation coincided with this concrete example of HM in action, and I knew that I needed to pursue this direction.  After completing my M.S. from Washington State University in 2006, I worked with as many people versed in HM as possible, meeting many wonderful practitioners in the process.  When the Grasslands project began in 2010 and I had the opportunity to be intimately involved, I knew it was a great fit.

There have been two major challenges this year:  managing five herds on two properties, and excessive rain in late May.     We are running livestock in several herds because it was not possible to find enough animals to stock the South Dakota ranches unless we worked with multiple livestock owners.  Thus, we have several different classes of cattle (yearlings, cow/calf pairs, replacement heifers) each with different owners, which necessitate running them in separate herds.  For simplicity sake, it is usually best to minimize the number of herds, as each herd must be moved to fresh pasture frequently whether it is a large herd or small herd.  So a couple of large herds are easier to manage than several smaller ones, even if the overall number of animals is similar. 

The weather has also been a challenge.  We received well over twice the monthly average precipitation (7+ inches) in May, which led to flooding on our Horse Creek Ranch and disrupted the grazing schedule.  We were also trying to receive cattle at Horse Creek at that time, but had multiple delays as it was too wet to get cattle trucks to the ranch; we ended up unloading cattle and trailing them five miles to get them onto the ranch.  But now that the rains have past, we are reaping the benefit of all of that moisture, and growing lots of grass.  So the disruptions attributed to excessive rain, which are relatively minor in the big picture, are well worth the security of knowing we have more than enough grass for all of our animals!  We certainly would rather have excessive rain than little or no rain.

Every community in which I have worked (in Montana, Wyoming and South Dakota) in the past few years has people that are interested in many of the concepts embraced by HM.  Many of these people have not necessarily embraced HM itself, often due to lack of direct exposure (most people have heard of HM, but not necessarily had any formal introduction).  However, most communities do have at least one practitioner and in some places there is a veritable HM community.  Overall, there is a vast potential for HM that simply needs to be developed, as everywhere I have been I have found that most people genuinely want to improve the health of the land, have profitable and stable land-based enterprises, and have strong communities.

HM ties into the community aspect in several ways.  While the decision-making framework formally addresses how an action or decision affects communities across scales (from local to international), perhaps the most important contribution is indirect.  Many ranching communities have been losing population over the past few decades, due to many factors but including the reality that traditional ranching practices are not very profitable despite the high risk and long hours.  Many young people simply leave for better pay and more attractive lifestyle in the cities.

HM provides a way to make land-based enterprises like ranching attractive to the people engaging in them, young and old alike.  By enhancing the financial potential of ranching, it makes more sense for young people to come back to the ranch (or to get into ranching despite growing up in town).  By enhancing the health of the land, people build genuine bonds with the land, and with others working under similar circumstances.  HM practitioners are striving toward their ideals, which creates tremendous positive energy directed toward those in the community with whom they interact.

Ron Goddard, Cinch Buckle Ranch, Broadus, Montana

My wife Kathleen and I were introduced to the HM model in 1985 on the Mountain Island Ranch in Colorado and attended our first HM school in Albuquerque in 1987.  Since then I have struggled to practice HM on ranches I have worked on, managed and leased with varying levels of cooperation from bosses and owners.  When I was approached about the Grasslands project I jumped at the opportunity to work with the people who invented what I have been trying to do for so long.

Our operational challenges have been jumping headlong into a new situation, learning the ground, running multiple herds, slowly acquiring the tools needed to manage the cattle, sharing facilities w/the previous owners' crew, having a boss once again and from March to June almost commuting the 267 miles from here to the ranch in S. Central Montana where my family was living and taking care of another herd of cattle.

On another level it has been and will continue to be a struggle to adjust to living so far from our two older children and most of our closest friends.  The remoteness and frequently very difficult access to/from this ranch sometimes weighs heavily.  It is hard for my wife, Kathleen, to get motivated (once again...I have moved her many times in the past 25 years) to make a home of a house and grounds that have been run down and neglected for so long.  She and I both came west (I in my teens and she in her 20's) to live in the mountains and while we recognize the benefits of running cattle on the plains we also miss the rocks and pines.

Many, but by no means all, ranchers have by now heard of Allan Savory and HM but it is still more common to hear all the reasons why "it won't work here" than to hear genuine interest in what we're doing.  While I have seen a gradual acceptance of some of the tenets of HM over the last quarter century I have come to believe that radical change is unlikely.  My hope is that my kids and other youth who have grown up seeing and hearing about better ways to live will be able to make what is now rare into the commonplace.  I seldom try anymore to convince those of my generation that we know what we're doing.  The Grasslands Project seems to me an excellent way to show our neighbors (and their kids) what we do and that ranching actually can produce not only "a pleasant life in the country"...as Allan Nation puts it, but can also produce the wherewithal to enjoy other things that life has to offer besides hard work outdoors.

Jacob Goddard, Cinch Buckle Ranch

Now that is it is summer and it gets hot real fast we get up around 4 or 5.  Usually that early we move the cows, cows move a lot better when the weather is cool. Usually sometime in the middle of the day we come back and eat lunch and go out and build fence. If it is a slow day I will ride colts for me or for other people that gave them to me to train.  By then it is evening and Mom feeds us supper and we usually go to bed pretty early.

Later on if I am running  a place I want to run it like this. The older generation, they kind of do it like Grandpa did it. I think there is a lot more, I have a lot of buddies who just went to college and any time you bring up Holistic Management or Allan Savory they have heard about it and know the basic idea.  So I think there is a better chance to get my generation doing this than it is my Dad’s generation.