Grazing Grass Podcast sharing Regenerative Ag Stories

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NOTE: There were 2 speakers identified in this transcript.Speaker separation errors can arise when multiple speakers speak simultaneously.

0:00:00 - Cal
Marshall, we want to welcome you to the Grazing Grass podcast. We're excited you're here today.

0:00:05 - Marshall
Thank you, sir. I'm honored to be here. I'm a fan of the show and get a lot out of podcasts, so I'm happy to help wherever I can.

0:00:14 - Cal
Well, thank you, Marshall. To get started, can you tell us a little bit about yourself and your operation?

0:00:21 - Marshall
Sure, I am from Central Texas. I live in a little town called Gatesville. I grew up around this area. I got started in ranching from a very young age. My grandfather owned cell barns, was an auctioneer, ranch, traded cattle, all those things, and when I was a little kid I loved that. You could have asked me if you wanted to be a professional baseball player or a rancher. I would have said a rancher. I idolize those guys. So that's what I did growing up. And when I was in high school my grandfather passed away. We sold the cell barn.

A lot of things changed, but after I graduated high school I wanted to continue my passion in agriculture. So I pursued a degree in animal science at Texas A&M. Upon completion of that I went to go work at 44 Farms where I had been interning while I was at A&M. I worked for them for about a year and I was in charge of nutrition, but more or less I drove the feed truck and I quit to realize after that that's not what I wanted the upside of my education to be.

So I applied to TCU Ranch Management and was accepted into that program and that was really a hard but very influential year of my life where I met a lot of people, found a lot of great mentors, really started my journey in grass management. I come from an area that is almost completely overgrazed everywhere you go and that's just a norm, and when we talked about the big four native grass species, I didn't know what those guys are talking about. So it got me. At that point I realized how little of it I knew and how much more I needed to educate myself, because, as ranchers, first and foremost, we're grass farmers, we're not livestock owners, and caring for that natural resource is the utmost importance and it allows us to be sustainable through the ebbs and flows and the weather changes in the market.

0:02:17 - Cal
Well said there. A couple of things. I hate to even bring up A&M on the podcast. They left the Big 12, went to the SEC. I seem to enjoy it a bit much when they lose being an OSU grad but going through OSU and getting their animal science degree, it's been a few decades for me. We didn't talk about grass. I took a rangeland management class, but really the grass farmer and managing our grasses and soil health like we do now was not mentioned At Texas A&M. Was that starting to creep in or were they still in that traditional academic mindset of here's your input, here's what you get out of it?

0:03:05 - Marshall
Yes, sir, when I was there it was very much the old school, I think. Now they brought in Jeff Goodwin to help a lot with their range science department and I think it's changing so and it's just changing for the better. But yes, my experience was very similar to yours.

0:03:20 - Cal
Yeah, and OSU is doing some changes as well and some of the programs they're doing now. Now when you went to the TCU Ranch Management course, was it more the same or had they adjusted some?

0:03:35 - Marshall
They're very much brass-based. They are managing the ecosystems first and foremost, and you have to understand that foremost, and you have to understand that what they say at TCU is they want to be able to drop you out anywhere in the world and you be able to evaluate the natural resources and the financial resources of the landowner and be able to put together a plan that is going to be not only the best for the land but also the best financially for the land.

Oh yeah, so it was totally different and unique. And yeah, I can't say enough good things about TCU Ranch Management and all that stuff.

0:04:07 - Cal
Oh, very good, Very good. One thing I want to jump back just a little bit before we talk more about ranch management. You said your grandfather owned a sale barn. I love going to sale barns Even now I go and it just immediately takes me back to my childhood. I enjoy it so much and I'm actually disappointed I don't get to go more often. I'm sure you have some of those same things being around it with your grandpa having one.

0:04:38 - Marshall
Absolutely. It was a great place to learn and I still like to go as often as I can to. You know, keep, keep an ear on the market and bigger always. That's really we can talk about grass all. We can go as often as I can to keep an ear on the market and bigger always. We can talk about grass all we can. But being able to adapt and change the market is equally important and then continue to be sustainable and profitable in this industry.

0:04:57 - Cal
Oh yeah, I completely agree. I've just started recently. My dad does this all the time, but he all the time calls me, hey, do you have so-and-so auction on? Because he's watching it on his phone. So I've actually started watching more online as I'm doing other work which is very distracting for me. But that's a great use of technology if it doesn't distract me too much. Anyway, I just want to go on that tangent for just a second about a cell barn, because it was probably my dad would say. We didn't go all that much. I felt like we went every week and it was one of my favorite times.

0:05:35 - Marshall
Yeah, no, definitely. I met a lot of great people and learned a lot. There's a lot of really knowledgeable cattle buyers in there, and you can certainly learn quite a bit about buying and trading cattle in a cell barn yeah, okay, so got that tangent out of the way.

0:05:52 - Cal
Let's jump back to that tcu ranch management and you talked about very grass-based, holistic view of the ranch and what you're doing at the time, were you running any of your own cows or were you focused just on school at that time?

0:06:07 - Marshall
I was focused just on school. At that time, after A&M, I really thought that I wanted to pursue the seed stock operations, because that's how we were taught.

And we thought that was the highest level and then after I love 44, no knock on those guys. But after seeing that I realized that the commercial side is what really drew me and interested me more. Grass management was really where I wanted to be. I grew up also we had a lot of sheep and goats and I think that's always interested me, just because of the profitability of the sheep and goat versus the cattle. And I've always known from a young age that if you can't make money doing this, it's not going to last long.

So I'm not somebody that has endless pockets, so I had to figure out a different industry that I could be successful in.

0:06:55 - Cal
So, once you finished that ranch management, what was your next step in your journey?

0:07:00 - Marshall
I took a job managing a ranch, probably in western central Texas that was around the area of Rady. It had a very kind of basic rotation. At that point I wasn't I say I was a manager. I managed that specific portion, that part of the ranch, but there was multiple, multiple ranches under that whole umbrella and there was a head manager and I just. It was a great experience but I realized that we needed to be doing more with our grass management. A basic three yard, four pasture rotation, that's just not going to get it done, especially in an area where it forgets to rain too much and with the increasing cost of everything. We have to figure out a way to be able to grow more forage and really truly utilize the entire ranch and with that, increasing our water availability, all those things that congregate with that.

0:07:53 - Cal
When did you start looking for leased land so you could run some of your own animals?

0:07:59 - Marshall
It's something that I've always wanted to do, but as a just getting out of school, I did not have the funds to look at doing that. I really didn't have the time to look at doing that. And I will say that, oh, I've been managing ranches for eight years out of school and as a ranch manager I learned a ton, because, really, when I have to graduate from GCU, you think you know a lot, until you get out there and you start doing it and you realize, hey, you don't know nearly as much as you think you do and you need to continue your education.

And I think that was. That was all. That was a blessing, right? If I would have started right out of the box, I think I would have stopped my toe a lot and I still stopped my toe today a lot, but probably less than what I would have out of the box. But as a ranch manager, you do not have time to try to do things on the side. You need to spend all your time focused on that landowner's cattle and maintaining that landowner's property, because that's what you're paid to do and you need to do that to the best of your ability. Really, my time of leasing land is really very short. Like I said, I've been doing this for eight years, but just here recently, within the last six months, I was able to pick up some close friends' properties who decided to get out of the business and I was able to take that over. So I'm very not new in the cattle industry, but very new when it comes to leasing my own properties. Yes, sir.

0:09:20 - Cal
So just on that leasing land and leasing property, it sounds like it's a prior relationship that, because of that relationship and the other person deciding to sell out gave you an opportunity, there Was leasing land, always a thought that's a pathway in, or was it something that this came up and you're like, oh, I could do that?

0:09:45 - Marshall
No, I learned from when I was a little kid. My grandfather always told me the way that you remain profitable in this industry is by securing, basically, good deals. Good leases is that's the way that you can start out of being successful in ranching and then with that, with those retained earnings, then you can look to buy your own property. My family has a place. It's not, but it's not huge. So I always knew that I was going to have something else to make an economic unit out of everything, and so leasing land was always very important to me. They emphasize that at TCU. They emphasize that in ranching for profit, and that's very true. A lot of times when you're leasing land, you're able to lease that land for less than what you would have an interest payment on buying land. So you will cripple yourself financially trying to buy land.

0:10:35 - Cal
Yeah, and so often people go in and buy land and that sets them back financially from what they want to get because they were so eager in buying land. Of course I'm sure it's this way in your area, but finding land to lease is always, I hate to say, difficult maybe difficult's the right word. It is difficult. The land's in use already by somebody, or if it's not being used for grazing, that person usually has other purposes and they don't always think grazing is a good idea.

0:11:08 - Marshall
Yes, sir, it's very similar in my area. No, urbanization is a, however you want to think of it. I think of it as a problem. I guess it does increase our land values, but we have people moving in to this area of Texas that they just want a small little.

Whatever you want to say, homestead a little ranch to play on and that makes it difficult to get in and lease land. And I will say that my success has just been prior relationships and not being forceful with people, but just always be there to answer any questions they have and let them build that rapport with them and have them start to trust you and little by little they'll sway over to leasing you their property. A lot of times, when you really get to build that relationship, you learn that they're not profitable and most people they love to ranch but they also hate to lose money. So if you can figure out a way to say, hey, I'm going to bring you X amount of thousands of dollars more than you were making prior, they'll listen to you and especially if you can compound that with better management practices than what previously happened.

0:12:15 - Cal
Oh yeah, now one thing just to clarify in my mind where you're located. You said Central Texas, west Central Texas maybe. I saw a deal the other day that said that triangle area of Texas from Dallas to Houston to Austin or San Antonio, that triangle areas one of the fastest growing areas in the US, if not the fastest, I don't remember the exact numbers, but you're west of that just a little bit, if I'm correct.

0:12:40 - Marshall
More or less yes, or a little bit west of it.

0:12:42 - Cal
Yeah, not too far from it, though, correct.

0:12:45 - Marshall
Yeah, Not too far from it though.

0:12:46 - Cal
Correct yeah.

0:12:47 - Marshall
Yeah, there's not a lot of large ranches left in the area that I live in, our average less than 500 acres really. A 2,000-acre ranch is far and few between where I live.

0:12:59 - Cal
Oh yeah, so I grew up. I say I grew up, I actually live right here where I spent my teenage years working on the dairy. But before I was a teenager we lived south of Chelsea, at Bushy Head, and when we lived out there as a kid we were slightly no, just about two miles off the highway on a paved road and we used to tell people or Dad used to tell people, or dad used to tell people we were the third house two miles in. We were the third house. You go down there now and we moved out of there in 85. We moved here in 85. You go there now.

It's houses up on houses. It's just five acres, 10 acres. Maybe it's just every once in a while you'll come across the 40 or something, but it's just five acres, ten acres. Maybe it's just every once in a while you'll come across the 40 or something, but it's just crazy how that area has changed. For where we live now it's definitely larger pieces here, but you can feel the encroachment and obviously as generations pass on and it's passed down, it gets chopped up, like there was an auction the other day and it wasn't too many acres and they're chopping it up into three pieces.

0:14:10 - Marshall
I'm like don't chop it up, but they didn't ask me, so right that's the world we live in today, so we have to learn to adapt right, exactly.

0:14:20 - Cal
So it means we got to do a few other things. Now you said you finished your TCU ranching management and you've managed ranches for a number of years and you got some lease property not too long ago. First, before we talk more about your lease property and how you're going to manage that, what did you really take away from those ranch management jobs?

0:14:45 - Marshall
That ranching, no matter how good of a manager you are, is very difficult. Every year is a new pitch, and it's the weather, it's health, it's market and really, what I took away more than anything was the places that rely solely on income from basically one type of livestock. It's going to be very hard to be successful Year in and year out it's going to be very hard to be successful.

So any way that you can open up and have new revenue sources come in, whether that be through adding a new species that you're grazing by hunting leases, promoting that by carbon contracts, whatever you can do to be able to have new revenue sources come into the ranch, that is going to be paramount to your sustainability and be able to keep that property of the family for a long time, especially when you're forced with land prices just in my lifetime that it comes by times 10 in some places.

0:15:49 - Cal
Oh yeah, I believe the land we're setting on. Dad purchased it in mid 80s or mid to late 80s and I would say if he were to price it right now, it would be at least 10 to 12 X what he paid for it.

0:16:08 - Marshall
Yes, sir.

0:16:08 - Cal
And I think that's the general feel around here. It has really shot up. Yes, sir, now, when you were able to get this lease, you've got all this experience. So what was your plan for this lease land, my plan was to be profitable year one. That should be a goal for more people.

0:16:33 - Marshall
Yes, sir, I knew with the cattle market the way that it is right now. There weren't a lot of good buys out there. So I took the advice of many good books written before me and many people that I've listened to on podcasts before, and we brought in some custom tariff cattle and that just allowed us to be profitable year one and start slowly improving the property, but with profit of paramount importance. Once we get there, once the market shows opportunities, I'll be happy to start investing in it, but right now it's too rich for my blood.

0:17:08 - Cal
Oh yes, just yeah yeah. There's not anything I can add to that, it's just the prices. I see I'm like, oh, maybe I should sell more.

0:17:19 - Marshall
And I think that's what the TCU Ranch Management Ranching for Profit. Having this background in ranch management has allowed me to make relationships and connections where people are willing to send the cattle and trust that you're going to do a good job and take care of their stock for them.

0:17:35 - Cal
And so that brings up the question how did you find cattle to custom graze?

0:17:42 - Marshall
Prior relationships. Prior relationships People that I've worked for in the previous ranks, that I've managed and I've met. Oh yeah, those guys run a lot of stocker cattle and they're always looking to expand and I just happened to be in the right place at the right time.

0:17:56 - Cal
Did you reach out to them, or happen? To be having a conversation and bring it up and it worked out good for you.

0:18:03 - Marshall
Yes, sir, I reached out to them?

0:18:05 - Cal
Do you getting this leased land? Did you go in and do anything to get it set up to manage your grass better, or was it pretty much the way you wanted to go?

0:18:17 - Marshall
The initial place that we've got the cattle on right now is really set up nicely and it's already. It's cross fence, I think. It has 16 different pastures and we're going to continue to subdivide, but it was already set up really nice and that's why I knew that we could make a big change pretty quick. It's just getting the stock of cattle healthy and then being able to graze the way that we want to graze, but health is always this first, when you start getting those little rascals in.

0:18:43 - Cal
Oh yes. So are you moving those on a on a calendar based system, or how are you deciding how to move them and rotate them?

0:18:54 - Marshall
Really just observe and adapt to what we're seeing out there. When we took that place on, it was overgrown, so it's. We're trying to get it raised down a little bit and get the grass a little more palatable where the cattle can gain efficiently on it.

0:19:06 - Cal
So you mentioned there you brought in some cattle to custom graze because you are making sure you can be profitable in the short term. So you get to that long-term part. You'd also mentioned earlier that multiple species are multiple income streams. That would be a better way to say it, because it's not always a different species. It may be carbon, it may be honey, energy different streams. You've got one stream right now. Are you thinking about what you could do to provide a second stream of income from that land?

0:19:39 - Marshall
Absolutely. To me, cattle are the easiest to deal with, out of the box Mottled cows easiest Stockers second. But when you start getting into sheep and goats, you really need to understand the property, understand the fences, because they offer a whole nother host of issues that you have to deal with, and you really need to be prepared before you make that, before you pull that trigger. I've seen bad scenarios in that where the property is not ready to bring those species in and it doesn't work. So we're going to use the profit that we're making up front to be able to invest in getting the places set up to be able to handle the species.

Yes, sir, and I think in my area really, sheep and goats are paramount to keeping the savannas open. If we completely take away the browsers, the brush encroachment will kill you and you can't afford to be out there running a skid steer or spraying herbicide, and that's not something I want to be doing anyways. I would rather use livestock to be able to help me with that brush encroachment issue Right?

0:20:37 - Cal
Yeah, I completely agree and you bring up excellent points there. One of livestock to get ready for cattle is probably the easiest, especially if you're leasing a place that's already had cattle on. It Makes it real easy. If you're dealing with sheep and goats, that fencing, especially for goats, is much more difficult and you got to figure that out. Now I'm going to give a plug to if you're in my area. Now I'm going to give a plug to if you're in my area, southeast Kansas, next week I believe it's next week.

Yes, it is Regenity Wisdom with Dale Strickler, greg Christensen, he's having a sheep and goat grazing school. They have a grazing school for a couple days, then sheep and goats a couple days and herd quitter and working cows. Greg was just on both of those talking about his operation, what he's doing. It's very interesting. So if you're in my area and you're thinking maybe sheep and goats, I think that'd be an excellent school. I have not committed to it yet, but I'm definitely thinking I may need to go. Wait, let me reword that. I know I need to go. I may go ahead and cough up the money to go.

0:21:48 - Marshall
Yeah, Greg Christensen, he has a lot of good stuff. Oh, he does, I've read his books and listened to a lot of his stuff.

0:21:54 - Cal
Yeah, he really does. And the way he's utilizing land for goats and sheep. Yeah, I think it would be a really good conference and enough of a plug for them that I need to contact Dell and say where's my affiliate, Where's your discount.

0:22:10 - Marshall
My discount.

0:22:11 - Cal
Exactly, you're right. Yeah, that's why I called Dell and said, hey, I need a discount, because I just plugged you all. Anyway, you mentioned goats or sheep.

0:22:24 - Marshall
Do you have a preference on which way you go in the?

0:22:26 - Cal
future. It depends on the property.

0:22:27 - Marshall
You know sheep and goats are different grazers and a place that has more of an issue with browse and goats would be the answer. A place that really has more weed sheep are the answer.

0:22:40 - Cal
But yeah, everything in ranching is observe and adapt to what you're seeing out there For our grazing section. Today we're going to talk about Conteri Carbon.

0:22:52 - Marshall
So first off, just tell us who Conteri is. Yes, sir. Well, Conteri is a fairly new company in the carbon market. We were formed almost out of the company Vents, Our CEO, Ben Veress. He worked to build Vents into what it is today and when Vents acquired Merkle, Merkle fired Vents Ben saw an opportunity to basically step out and carve out a carbon aspect of the clientele. That he basically got in contact with Vents. They've been around for a year and a half years. We really started in the northwest and they have progressively moved south and east and they're very intelligent guys, really know a lot about the carbon market and how I got brought into the picture was they wanted someone who understood texas and oklahoma and had contacts in texas and oklahoma so we could start to continue to make this push east and get into higher rainfall areas.

0:23:49 - Cal
Yes, sir, so with this into the carbon area, explain what we mean by carbon and what they're doing.

0:24:01 - Marshall
Yes, sir. So basically, when we're talking about carbon, we're talking about your soil, organic carbon, that carbon stored in the soil and it is traded on a basis of a ton of carbon equals claim that they're being carbon neutral, and so the way that they do that is they have to purchase carbon offsets, and one way that you can purchase a carbon offset is by purchasing one ton of carbon in grasslands, or one form of how we can store carbon out of the atmosphere.

0:24:40 - Cal
Question before we dive a little bit deeper into that. One question you mentioned started in northwest us. You expanding eastward. Is it a united states focused company at this point?

0:24:53 - Marshall
yes, sir, as of now, we're just focused in the united states. We are in I believe it is 13 different states in the united states and we are we're making an eastward push. We have ranches in Texas, we have ranches in Oklahoma and. Kansas, but we're working to move east because, quite frankly, it rains a lot more towards the east and that is typically a higher yield in the area.

But we in the future would love to move into Canada and Mexico, but right now we're focusing on North America. Oh yes, right now we're focusing on North America.

0:25:21 - Cal
Oh yes, so you mentioned there about the carbon credit. Companies can purchase that to offset their carbon losses that they're manufacturing or whatever they're doing or causing. So just to a person out here a farmer.

0:25:44 - Marshall
How can this help them? As I mentioned earlier, it is another revenue source and to me that is imperative to being profitable year in and year out, and a lot of people we're already wanting to implement these practices. So the really neat thing about Kateri is we're backed by some very large corporations that have already pre-purchased our carbon credits.

So what that does is that allows us to invest in the rancher and infrastructure on your property. It just depends on what every ranch is different, right, so every situation is unique, but if you have large open pastures, we can supply you with vents. Virtual fencing Gallagher virtual fencing. If you need to enhance your water infrastructure, we can enhance your water infrastructure for you. If you wanted to continue to use polywire, we can help further fund that.

One thing that we also do is we provide you one-on-one with a ranch advisor, and I'm talking about people that are really knowledgeable in the regenerative space. So I'm talking to Jim Garrish, alejandro Carrillo, kirk Gazzia, enrique Guerrero, people that are out there writing books and are at the pinnacle of knowledge of amplified grazing, of regenerative grazing, and so I feel like that nobody else is doing that in the industry, and when you start this, when you start this journey, like I did, you're going to make mistakes and to be able to to have someone who has had 30 plus years of experience doing it that that's going to be whether you're going to be successful or not.

And so with us, with us putting forward the reason. The main concern or the main kickback I get when I start talking about amplified grazing is we're not set up for that. We don't have the infrastructure for that. So if you could find a partner like Terry to partner with that is willing to put in that upfront cost or to give you virtual fencing infrastructure costs, set you up with a one-on-one advisor that's really knowledgeable in this, pay for all the soil sampling, pay for all the validation and verification. To me that is a no-brainer deal.

0:27:50 - Cal
Oh yeah, honestly. Now you mentioned there someone who's not doing this, can Terry can help with those costs and get going with that For someone who's already doing it? Is it still beneficial for them?

0:28:07 - Marshall
The way that these carbon credits are recognized is through additionality, so something that you've been doing 15 years in the past, we cannot credit you for what you were doing in the past. We only can credit you for what you're doing in the future. So really it would benefit more someone who's going from a conventional set stock mentality that has changed their mind and has opened up to say hey, I really want to do something else, I want to implement this. They're really our ideal candidate for this, Not to say that we can't help people that are already doing it. We can't. Like I said, we can't pay you for past practices. So our ideal candidate is someone who is in a transition and we help them transition and be successful with that transition.

0:28:52 - Cal
Yeah, so someone who's doing set stocking managed traditionally, them changing to grazing is going to have a dramatic effect on their end result and really make a difference.

0:29:08 - Marshall
And I can say that I've been on a lot of places throughout the Southern Climates. There's not a lot of places that don't have initiality. Most all places could be doing better and a lot of times it's not their fault. They don't have the resources and the funding to really make those changes.

0:29:26 - Cal
So let's say you talk to an individual and they're like yeah, let's get started, talk about that process just a little bit to get started. And what happens that first year?

0:29:39 - Marshall
Sure. So initially we would find someone that we see eye to eye with. They're wanting to utilize amplified grazing, regenerative grazing. We want to truly have an in-depth understanding of your operation, of your goals. What is your footprint? Are you seed stock, are you stocker, are you cow calf, what are your goals? And once we have that initial make that initial relationship and have that rapport, if we feel that this is going to be beneficial for both parties because we're not going to sign anyone up that they have to match what we're wanting to do because both parties have to be profitable.

After that happens, you would send us in some KML maps, I would send it off to our mapping team and they would put it through an analysis where they would analyze your grass cover, your soil organic carbon, the potential improvement of soil organic carbon, how much rain falls in your area, soil type. This is a it's a long process, right, but with that we are able to more accurately make the decision is this property worth us pursuing? Oh yeah, if it is worth us pursuing, we would send one of our team members out there to your property to meet you one-on-one put boots on the ground, because what I was saying prior, that's all through satellites. You need to have somebody out there on the ground actually shoring this up and making sure what you're seeing through the satellite is actually what's out there.

So I would come out, meet with you, really get an in-depth understanding of your property, in-depth understanding of your operation. We would send out a ranch advisor for you to meet with and start working on a plan and we would take baseline soil samples. Because what we find through that satellite data, that's just an estimate. What we really need to do is take that baseline soil sample and we take soil samples a meter deep to really quantify what's going on out there and get a baseline for what the starting process is starting point is One thing with that, you're taking these samples, you're getting this baseline, you're meeting with a ranching advisor I'm not sure what terminology you use there, but they're there to support the landowner.

0:31:48 - Cal
Obviously you've talked to the landowner there to support the landowner. Obviously you've talked to the landowner, you guys, they're seeing eye to eye with their mission as well as your mission, so you're both on the same path. But does that mean that rancher farmer is giving his? Does he have to follow the suggestions given to him or does he still have some management autonomy there in what he's doing?

0:32:10 - Marshall
What we say at Kateri is observe, collaborate and adapt. The ranch advisor is not going to be out there all the time. He might be meeting with you one to three times a year. So it is the rancher can make his own decisions. We're just helping you in that process. This is not a this is not whatsoever a cookie cutter plan, and I can tell you no cookie cutter plans work. This is not a this is not whatsoever a cookie cutter plan, and I can tell you no cookie cutter plans work. Everything is always changing and we're just simply a partner to help you be successful. We're in this just as much as you are. It is a 70, 30 profit split 70% goes to the ranch, 70% of the carbon credit sales go to the rancher, 30% go to Kateri, to the ranch. 70% of the carbon credit sales go to the rancher, 30% go to Kateri. So if you are wildly successful, we are successful.

If you fail, we fail and I'll say another thing, one thing that's unique about Kateri if you fail, we take all the downside risks. You are not going to have to pay back money if you don't store carbon, and we're able to do that because we already have the funding from large corporations to help you make this change. So it is simply there's very little risk for the rancher in this scenario. And that's what drew me to this company, because I know as an industry, we have to change. We have to start thinking about our environment. We have a lot of people out there saying bad things about us. Lot of people out there saying bad things about us. So if we can use large corporate money to help us make changes that's better for both of us.

0:33:36 - Cal
Oh yeah, yeah.

0:33:36 - Marshall
They're getting. The corporations are getting what they want at a carbon offset and we're able to enhance our management.

0:33:42 - Cal
Right, yeah, well, just that ranting advisor coming down. I'd be a little embarrassed. Jim Gary should come down to my farm because I know he'd have quite the list of what I need to do differently. But just think of the potential value from that. If you just lean heavily on that and be like they're the expert, let's do what they're suggesting and if it doesn't work then we'll discuss it. But let's lean heavily on that. That could make a big difference.

0:34:13 - Marshall
Absolutely, and I would say that with my experience in ranching, if you're not willing to listen to others' advice, you're not going to be successful. Right, sometimes advice might not work, but if you ask three people a lot of times, they've made the mistake that you're getting ready to make. So this is the same thing.

0:34:33 - Cal
It's just we're using people that are really influential in the industry and have a lot of knowledge to help you with those decisions. Yeah, I think that's really beneficial, and just go off different opinions. A beekeeper saying is you ask 10 beekeepers how to do something, you get 12 different ways. So there's multitude of ways out there and just having that expert guru there is really beneficial. Now, when we talk about this, is this something that just happens over a couple years? Is it decades? What's the time frame?

0:35:05 - Marshall
Our contract is for 30 years. It is in two phases a 10-year practice change and then, from year 10 to year 30 is a conservation phase. We would hope after you start implementing these adaptive grazing principles, you'll see that this is beneficial not only to an additional revenue source, but it's beneficial to increase stocking rate, health of the cattle umpteen different, umpteen different.

0:35:31 - Cal
Tons of benefits there, sir.

0:35:33 - Marshall
So you would continue on with this practice. So theoretically you can be paid for 30 years on carbon credits. But at year 10 if you decided, hey, we're going to make this property into a hunting ranch, you don't have to commit to adaptive grazing for 30 years At year 10, you could stop, change that property over and go back to doing what you were doing prior, as long as you don't materially disturb the soil. So no plowing, and hopefully you're not going to build a neighborhood on it. But as long as that soil is not materially disturbed, you're not going to owe anybody back.

0:36:06 - Cal
Now, when you talk about a practice phase and a conservation phase, what's the difference between the two phases?

0:36:14 - Marshall
The practice phase is where you're actually implementing a practice in your management. You're actually implementing the practice change in your management. So you're switching, you're creating a delta, you're creating a change in the management. So you would go from set stock to amp grazing, the conservation phase. What I'm submitting by that is you don't have to graze cattle anymore. The soil carbon that we stored in year one through 10, that is in the soil and we're just wanting to conserve it. At that point you can continue the practice changes for all 30 years and receive carbon payments for 30 years. But what we're trying to do is not make it such a burden on the landowner to say I have to do this for 30 years. It's really a 10-year commitment of rotating your stock a certain way.

0:37:01 - Cal
Oh, okay. So let me paraphrase this and just make sure I have this correct Marshall, so it's a 10-year period, but you are committing to 30 years of not disturbing your soil. Basically that is correct. Yes, sir, selling carbon credits, but the period of time he's like he won't even we can't even really discuss it, because it's too far, too long for him. He's like I'm not saying what you all have to do to the land in 30 or 40 years.

0:37:41 - Marshall
That's totally understandable. This is not for everyone. If you're someone who's thinking about selling in the future, this is probably not for you. Really, what we're trying to be able to keep large ranches in the family people that don't have any desire to sell. They want to improve their management and they want to be able to bring in another revenue source.

0:38:00 - Cal
That's really who we are, oh yeah, so to me, and not to exclude anyone but younger ranchers or farmers who's getting started, or maybe another generation's coming on. So you know, it's the plan for the foreseeable future. This really works in, really good for them.

0:38:18 - Marshall
Absolutely People that are really wanting to, people that are wanting to make a change. This really, to me, is something that is something you should at least do your due diligence and research, because it's something that can help you make that change and fund that change.

0:38:36 - Cal
Now I know in other research, other conversations about carbon credits, planting of trees was one thing that was encouraged or required for some. Do you want the landowner to plant some trees or just focus on the grass there?

0:38:55 - Marshall
We're primarily focused on grazing lands. Enhancing your grazing management is where we, where we feel we can make the biggest improvement, and I'll say that we also go further in. If you have some dry land farmland or irrigated farmland that you've decided this is too expensive to continue on, we can fund the conversion of that previously tilled land back to native grass, and that is a huge, oh yes benefit for people, because it's very expensive when you go back to planting native grass oh, yeah, yeah.

0:39:25 - Cal
well, marshall, I'm trying to think of a intelligent question here. Most of the time, my best questions happen at 2 am, so I wake up and be like, oh, that's what I should have asked, but I think this is really interesting and as I think about your model and what you've said, I immediately think of a lot of people that could benefit from it, of people that could benefit from it but one thing my initial thoughts are when I look around at land ownership in my area it's all well, so my dad's got land, so he's a generation older than me and I'm 50-something.

And my grandpa we're going to celebrate his birthday on Sunday and he's only turning 98 and he still has got a large track of land up here. Some of those things will be changing in the near hopefully not in the near future, but they will be changing in the future. But as this gets going, that may be a possibility for whoever that next generation is. Or if the land is sold or something. Is there a minimum acreage size you all want to look at before you even have the discussion?

0:40:43 - Marshall
Yes, sir, our largest expense is the soil testing. Oh, yeah, and we're working to try to decrease those costs and I think as the technology improves we will be able to decrease some of that soil testing costs. But right now I would say we're looking at ranches. 2,000 to 3,000 acres is probably our minimum.

And a lot of it does depend on rainfall.

As we move east deep east Texas, where it rains 50 inches a year that size can decrease, because the yield of carbon would be drastically higher than what it would be eastern New Mexico.

Yes, sir, one thing that I want to bring up is one thing that we do that kind of sets ourselves apart from other people in this industry is we require the cattle to be GPS tracked, and the reason we do that is we want to hold our standards up to the absolute highest level. Carbon markets are under a lot of scrutiny and when that tide goes out we don't want to be caught with our pants down. So we want to hold our credit to the highest, absolute highest standard. That way, those buyers can look at our credit and say we have proof, we have data behind what's actually happening. We can prove these changes are actually happening, and not only is that beneficial from a buyer's aspect, for the rancher, we can sit there and prove hey, this methodology we were using to raise them worked or it didn't work, because we have the data to back them. We can prove these cattle were in this pasture for this long, and that opens up that's endless opportunity really for being able to enhance your management on your ranch.

0:42:21 - Cal
Yeah, just the amount of data you're getting from that, and I assume you guys are doing that with Vince callers so that you're able to do that, or are you doing another way?

0:42:32 - Marshall
Vince is one of our options.

0:42:34 - Cal
So for virtual fencing.

0:42:35 - Marshall
we worked with Gallagher, we worked with Vince and we kind of custom tailor this program to what the rancher wants. If you are in Western Oklahoma with 10,000 acre pastures, that's really rough. Vince or Gallagher might work for you. If you are in East Texas with 100 acre pastures, that's not necessary. So we also work with other GPS tags and we work with movement. That's a GPS tag, it's just simply a tag that looks just like a basic cattle tag that goes to the ear. 701x.

We're looking at working with HerdX. So we can custom tailor this program to what the rancher is wanting. If all you're wanting is you're after technology you don't really care about the carbon payments we can fund you with as much technology as you want. We can give you the Gallagher or eShepherd virtual fencing. We can provide you with enriched ag cameras. We can provide you with flux towers, Everything that you want. And then, on the other hand, if you're someone that is only interested in the carbon payment, we can make a cheaper program. To where maybe you don't need a ranch advisor. We can use the basic movement tag. So basically, this whole system is to benefit you and we can custom tailor to what your wants, needs and goals are. Oh yeah.

0:43:46 - Cal
Now, now one thing I probably should ask a little bit earlier. You talked about in that first year. You're going out and doing some soil samples. You're getting some baseline. Are you coming back yearly to do soil samples?

0:43:57 - Marshall
We come back every three to five years to take soil samples.

That's what quantifies this change that's actually occurring. Yes, sir, we also pair that with those enriched ag cameras. And the enriched ag cameras are really neat. They are constantly. You can put them on your four-wheeler, your buggy. They're constantly taking photos of the rangelands, they estimate the forage curve, they can tell how much diversity you have in your pastures, they can help you set your stocking rates. And that also allows us to see is there a change going on? That we can also pair with those soil samples.

0:44:34 - Cal
Now, most of the vendors and products you mentioned I'm familiar with, at least passingly, but this Enriched Ag Vision or Ag.

0:44:45 - Marshall
Camera. Yes, sir, enriched Ag Vision Camera.

0:44:49 - Cal
I'm not familiar with it at all, I just pulled it up here, very neat technology. The way technology is advancing, it's going to be amazing what they can do if we can survive it. Yeah, very interesting. I'm going to have to do a little deeper dive on that, because that does look really interesting.

0:45:09 - Marshall
That's one positive thing about Kateri. We pay for all of this technology. But one thing I'll say about the enriched ag cameras. Coming from a ranching background, a lot of this stuff is art, right, looking at grasses and estimating forage and quality of forage, all of these things.

It would be amazing to have technology that could also give you another set of eyes that is not skewed, to whatever's going on in that current year. You know how it is we're in a drought, things might to you look a little bit better, but if you can go back and say this is what it actually looked like in 2021, that's a huge benefit for the rancher.

0:45:40 - Cal
Yeah Well, just relating that to my marriage, I hide all the old pictures of me, so my wife doesn't look at those pictures and say, oh, this is what it looked like, and now this. So yeah, I think pictures are very important, but having that another set of eyes, even if it's AI and I'm going to say this, and I don't know that this product is, but if there's some AI in it that helps figure out that stuff it's just another tool, and that's one thing we have to remember. These are all tools for us to use the data to make good decisions. They don't just provide you all the answers, absolutely.

0:46:18 - Marshall
Absolutely.

0:46:19 - Cal
Marshall, before we move on to the famous four questions, is there anything else you would like to add about Conteri?

0:46:34 - Marshall
Kateri. I feel, kateri, compared to the competition, we are holding ourselves at the highest standards, but we also truly value our connection with the rancher. We want you to feel that you can reach out to us anytime and we are really there fighting in your corner. If you need me to come out and evaluate something on your property, I'm just a phone call away, and so we just want to work really close hand in hand with the landowner, have a great relationship and we both want we really both want to be successful.

0:46:58 - Cal
Very good. I do think it sounds very interesting and it's definitely something I would check into for our own farm here if the situation was different. I know my dad's not interested in it at this point, but maybe sometime in the future it may be something we're interested in, because I completely agree about multiple income streams. And how are you planning for profitability? Yes, sir, well, marshall, it is time for us to transition to our famous four questions sponsored by Kenco Farm Fans. They're the same four questions we ask of all of our guests. And, marshall, I hope you've studied, so we'll find out. The first question Marshall, what is your favorite grazing grass related book or resource?

0:47:43 - Marshall
Multiple answers to that. I've read Dirt to Soil Holistic Management. I've read Brad Beauty's books, but the one I continually pull back out is Thoughts and Advice from an Old Cattleman, and you know that has some grazing management in it. But I think it shows you a lot of history of what's happened in the cattle industry and it's definitely my favorite.

0:48:05 - Cal
Is that Gordon Hazard's book?

0:48:07 - Marshall
Yes, yeah, I was turned around here. I thought I have it on my bookshelf right here, but I'm not seeing it. He talks about regenerative practices before regenerative was a thing. Oh yeah, he was ahead of his time.

0:48:20 - Cal
Yeah, I enjoyed his book. Excellent selections there.

0:48:31 - Marshall
Our second question what is your favorite tool to use on the farm? Mine is probably unique to any other answers, but those would be my herding dogs, my border collies. I could not get by without them. They allow me to work a lot by myself. It's hard to find good help sometimes, and when I get frustrated, they're there to cool me down. Yeah, they are my favorite tool.

0:48:51 - Cal
I am so glad you brought that up, Marshall. Let's go ahead and move to our third question. What would you tell someone just getting started?

0:49:00 - Marshall
Don't be afraid to make mistakes and you're not going to ask a stupid question. I feel like there's too many people in this industry that are looking over their shoulder at what their neighbors are doing. People in this industry that are looking over their shoulder at what their neighbors are doing, and a lot of times that might not mean that he's successful just because he's doing something, because he's just trying to match the status quo. So be willing to go out there and make mistakes, ask a lot of questions and be willing to educate yourself through conferences, Ransh for Profit, whatever that may be. Tcu Ranch Management is a year-long commitment and that might not be for everyone, but everyone can go to Ranch and take a week off and go to Ranch for profit, and that opens your mind, it allows you to meet so many smart people and you have access to tons and tons of knowledge.

0:49:43 - Cal
So that's what I would tell someone starting out. And I agree, marshall. One thing I want to throw in there sometimes when someone's getting started and they look at that cost and they look at being gone that long, it's difficult. There are some online resources. That's not quite up to that level yet, but that's definitely a starting place as well.

0:50:05 - Marshall
Do some online courses until you're able to go. And I would say, with the ranching for profit, making a move and marketing cattle or screwing something up is a lot more costly than going to that school.

0:50:15 - Cal
Oh, yeah, yeah, I think you're right there. Yeah, very good, marshall. And lastly, where can others find out more about?

0:50:24 - Marshall
you, Acid and Kateri. We have a website and that is wwwkatericarboncom, and Kateri is spelled K-A-T-E-R-I On that website. We have a lot of the stuff that we talked about today. We have umpteen different blogs, a lot of good resources about regenerative management. I'm also on Facebook. If anybody ever wants to ask me a question, you can find me at Marshall Worley on Facebook.

0:50:50 - Cal
Very good, Marshall. Really appreciate you coming on today and sharing.

0:50:55 - Marshall
Yes, sir, hopefully everybody enjoys this and do their due diligence to at least look at what a carbon contract can bring them and how it can enhance their management on the property.

0:51:08 - Cal
Very good.

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