Primary Blog/Profitable Agriculture/Profitable Ranching is More than Marketing

Tuesday, April 04, 2023

Profitable Ranching is More than Marketing

Your success in ranching is equal to more than the money you make on a sale. It’s more than the quantity of dollars in your ranch account. Profitability is all of the elements of your ranch working together to build your wealth AND your happiness.

You’ve got the drive and the dedication to make your ranch a success. You’ve got history behind you and big dreams ahead of you. You’ve laid out a good marketing plan and you’re getting yourself up for growth. You raise a good product and you’re ready to sell it. But do you know the basic stewardship principles that underpin all of your profitable ranching success? The kind of success that has you feeling secure in your space and creates a foundation that the next generation of ranchers, your kids and grandkids, want to come back to and build upon?

Ranching is a unique life that blends lifestyle and business, and it demands the best of the men and women that pursue it. Here are just a few of the principles I have learned over the past 4 decades, at my father’s side, in the fields on my own, and at the feet of experts who have gone through the hard work of distilling the lessons of Hard Knock University into lesson plans that increase our profitability.


Lesson One: Know Your Ecology

Every rancher dreams of lush grass, full streams, and peaceful pastures: but we work in the real world where drought, flood, deep snow, heat waves, and a host of weather patterns and pests threaten our lifestyle of choice. Achieving profitability in spite of those challenges is a direct result of good stewardship. We increase our herds on good years, and we implement our destocking plan when our land has reached its capacity. This requires that we know our land from the ground up. We know what our soil needs. And we act as a liaison who facilitates communication between the needs of the land and the demands of our customers. We keep our business partners apprised of where we are in the cycle of grass management, and we put in the hours of labor to ensure we always have feed: even in harsh years. Stewardship plans ahead for difficulty and reaps the reward of profitability, even on a down year.

Lesson Two: Cattle Management

This should come as no surprise, but to be a successful rancher, you’ve got to know cows. We need to know which cattle phenotypes and genotypes thrive in relationship to the ecology of your ranch. Phenotype is what we see on the outside: color, naturally polled or horned, large or compact, tall or short. These visual traits matter in the context of our ranch environment. Genotype refers to what is happening on the inside of the bovine, or their DNA: growth capacity, muscle quality and mass, calf birth weight, etc. These are the traits they are going to pass onto their calves. There’s so much more to consider than just the breed we like best. Good stewardship requires that we consider which breed is best suited to our ranch. That’s good cattle management.


Lesson Three: Economics

Profitable ranching requires that we understand what economics are and how they impact our operation. You have to know your numbers inside and out. Do you know which of your ranch enterprises are profitable? Wage earners have a clear idea of how much they make per hour, but it can be trickier with a business like ranching. You need to know the true cost of each animal on your ranch, from birth to finishing. You also need to understand how your time impacts those economics. Are you doing $10 work or $100 work each hour? You need to clearly know the difference and make sure that your time is spent on what increases the profits of each of your enterprises. Economics also includes the individual components that make up your ranch income, and an understanding of their strengths and weaknesses. Do you know which enterprise budget (cow/calf pairs, stockers, finishers, etc) is costing you more than they bring in? Is one enterprise subsidizing all the others? And if it is, is it bringing in enough to make up the difference for losses in other areas. Knowing your economics inside and out is key to profitability.


Lesson Four: Financials

Just like ranch economics, your ranch financials are about money. However, they are completely different from your economics. Your financials include your cash flow, your budget, and your business plan that can actually be financed. A good steward has a plan that is solid enough that a bank would consider that plan worth the risk. It includes a plan for getting cash flow even on down years, and stable goals for annual growth.

Lesson Five: People

Most ranchers get into this business because of people. People we’re related to, people we’ve worked for, or because of the hopes of people we love. People are WHY we pursue ranching and are the most important part of our stewardship and profitable ranching. Good stewardship consists of knowing who our people are, what we are responsible for in our relationship with them, and how to maintain those relationships. Profitable ranching includes incentivising the vision of our ranch for our families and employees. It includes nurturing loyalty, building up individual skills, and balancing time, costs, and needs of our people with the land and the animals that define our lifestyle.


More Than Marketing

Why are these elements of profitable ranching so important? Because your success in ranching is equal to more than the money you make on a sale. It’s more than the quantity of dollars in your ranch account. Profitability is all of the elements of your ranch working together to build your wealth AND your happiness.



See other posts like this one:

Monday, April 10, 2023

Winter Calf Loss vs. Profitable Ranching

Saturday, April 08, 2023

Can a Family Farm be Profitable?

Thursday, April 06, 2023

Where Have All the Farmer’s Gone?

Wednesday, April 05, 2023

What is Good Farm Stewardship?

Tuesday, April 04, 2023

Can Regenerative Agriculture Feed the World?

Tuesday, March 28, 2023

Winter-Proofing Your Cow/Calf Operation

Tuesday, March 28, 2023

When Did Regenerative Agriculture Start?

lb-logo1.png

ABOUT

About LaunchBoss

Community

Media

PROGRAMS

Books

Courses

Coaching

CONTENT

Blog

Newsletter

Podcast