If you Think Profit – you will find Profit

I am going to give away a secret to making money in the cattle business, no matter which segment you are in.   You must think profit, and commit to it.   If you hope to make a profit but spend most of your time worrying and/or thinking about losing money the predominant thought will certainly cause you to lose money.   And you already have your excuse handy, its these up and down markets that make it impossible.   There is nothing we can do right.   However, if you commit to making a profit you will find yourself taking the necessary steps to hit that mark.

Here’s my closing thought this week: People are upset and saying silly things like the market is broken and we need government intervention or a bail-out for cattlemen.   I, once again, outlined the market is trying to help us this week.   How is that broken?   We can make money on fats.  We can make money as back grounders.   The cow calf operator can make money with all the different classes of cattle in their inventory.   The market is giving us a chance to make some real money right now.   It’s also giving us the opportunity to lose big.   Our free will and our way of thinking will dictate which side we choose to walk on.

https://farmprogress.com/marketing/black-swan-markets-still-offer-profits

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Don’t Break Rule #1

Raising cattle comes with a lot of rules, but one stands out as most important.

R. P. ‘Doc’ Cooke | Dec 16, 2015

Yes ma’am or sir, there are lots of rules in the cattle and land business. There are several rules that get tagged as Rule No. 1. But the list is topped by one rule which states “Do No Lasting Harm”. Pain often leads to gain. Death does not.

Page 115 of Walt Davis’s book “How Not to Go Broke Ranching” explains a part of Rule No. 1 that needs to be burned into the cerebral cortex of each of us cattle ranchers/farmers. Cattle feeders should have it fire branded on the back of hands as well as minds.

Following one simple rule can avoid a world of hurt to your cattle herd.

The part of Rule No. 1 that I am talking about is “Don’t Make Sudden Changes in Cattle Diets.” Sudden, drastic shifts in rations and/or forage move animals toward a dangerous health cliff.

Remember that cattle do not digest forage or feed. The bugs (mostly bacteria) do the forage digesting and the cattle digest the bugs.

Bacteria that digest the sugars and simple starches found in grain are not the same as the bacteria that digest the sugars and simple starches found in cool season plants and grasses, and are not the same as bacteria that digest the more complex starches (cell wall cellulose) of warm season grasses. Different still are the bacteria that digest woody plants.

The different bacteria needed to digest the various feedstuffs are present in a healthy ruminant (cow). But the numbers vary depending on what the animal is consuming. When feed changes the bacterial species number changes and this change needs time as its major cushion. Major changes need 18-30 days to safely occur.

Fast forage changes especially when moving to higher sugar and simple starch grains, cool season plants, and other immature grasses result in a tremendous ‘kill off’ of rumen organisms (bacteria and protozoa). Performance and animal health head south. Scours is frequently seen as is a lack of cud chewing. The cattle do not seem content. Bad boys (bugs) raise their heads. Clostridial perfringes can take cattle out in a matter of hours, but we can also open up several other ‘cans of worms’ that are expensive.

Plan and manage

Nature tends to work or move in what has been described by Montana’s Ray Bannister as ‘boom and bust’. Walt Davis and I believe and recommend that it is always wise to plan and manage in a way so as to cushion the boom and the bust when it comes to cattle. I think Bannister agrees.

Ionophores (Rumensin and Bovatec) are cushions for high sugar and simple starch feed and forage and cattle health. The same is true of long stem hay especially long stem warm season (C4) hay. The same is true for amounts and time.

Remember that cattle just do not handle sudden changes well if the change exceeds 15 to 20% of the dry matter intake or consumption. Changes from C4 based pasture to C3 based pasture are much tougher than changing from C3 to C4.

Related: Reviewing a few basics might help

Ionophores, C4 hay, and limited grazing time are all more than a good idea when moving cattle onto small grain or pretty fescue, rye grass pasture, etc. The old advice of “never move hungry cattle onto pretty pasture” has not changed. The same is true of grain feeding. Remember that cud chewers take the majority of a month to make successful feed changes.

Cattle health must be and is very important. My phone has been ringing regularly with questions, problems, and sometimes wrecks for most of the last 40 years. Lack of knowledge, planning, and execution are usually evident. The weather often gets the blame when the mirror would reveal the demon.

Optimal health may be less than a necessity; “pretty close” is where we likely need to be almost every day throughout the year. Setting goals for cattle health is a requirement of profitability. Annual profitability is a requirement of sustainability. Goals without execution are no more than dreams.

Walt Davis says that if we don’t know what we are doing it does not make a damn what we do. I agree with Walt but when it comes to cattle we had better know or be plugged into someone who does.

Out in the pasture cattle are made to move and what they ate yesterday needs to be real similar to what they eat today.

The ‘take home message’ for all of us is to think, learn, plan, execute and don’t forget the rules.

Think and grow rich.

Planning With Purpose

Practical Planning

Components of Intentional Management on a Ranch

Updated 

What is intentional management? It might be easier to describe what it is not than to describe what it is. In an attempt at “tongue-in-cheek” humor, let me describe what intentional management is not.

You might not be managing intentionally if:

  • Your record-keeping system is a shoe box or a file folder in which you keep receipts until tax time;
  • Your marketing plan is to sell the largest calves each time you pen the herd, weaning the calves en route to the sale barn;
  • Your winter-feeding program is to provide cubes a couple of times a week to the herd without knowing the quality of the hay or standing forage on offer;
  • Your stocking rate was set by what the neighbor, your granddad or your real estate agent suggested, and you don’t adjust it until drought forces you to; or
  • You don’t routinely test and analyze your pasture soils, yet you routinely apply fertilizer.

I’m sure you can think of other ways of how we as producers too often go about “running” cattle with little forethought and planning. In favorable years, we can get by easily enough, but in unfavorable years (due to weather, markets or other issues), difficulties arise.

These unanticipated surprises can be costly and often difficult to overcome. Hopefully, most of us learn from our mistakes and failures and, if we survive, can laugh at them in hindsight. The secret is to fail early, fail often, but fail cheaply—and adapt our management so that we do not repeat our mistakes.

 

Manage with intent

Intentional management is the active management of the collective components of an operation toward the achievement of realistic, well-defined goals. It is a holistic and forward-focused management approach in which an operational management plan is created and used as a template to plan and prioritize activities, then to monitor and measure progress toward defined production and economic objectives.

Management plans need to be built to complement the resources of the operation—the land, facilities, personnel and production system(s) being operated. Even though there is always some uncertainty within an agricultural operation, with a management plan in place, a producer has a road map to guide him or her toward a predetermined outcome.

When variations in climate or markets or other surprises occur and force a change of course, having the plan in place helps guide a producer to either continue to navigate toward the original outcome or alter the course toward a new, more realistic or attainable goal, given the circumstances.

 

Planning brings clarity of purpose

For intentional management to be more than a concept, it takes forethought, planning and action. The biggest challenge for most producers is getting started. It is much too easy to get caught up in the day-to-day activities of running a cattle ranch or agricultural operation. It is in the intentionality of developing a management plan where clarity of purpose is achieved.

This is where a manager establishes a vision of a desired future for the ranch, identifies the key management objectives to be accomplished, devises an action plan that addresses the critical aspects of each management component, and integrates these components into the management plan for the ranch that the entire staff will implement.

The management plan for the current year becomes the template for the following year, with continual fine-tuning and adjustments over time while adapting to the changing industry, market conditions and climate variations that will occur.

Through intentional management and use of a management plan, managers are more likely to attain their desired goals, will experience fewer surprises, and are better prepared for the unexpected when it occurs. Then, instead of just laughing at mistakes of the past, we can laugh ourselves all the way to the bank.

 

Components of intentional management

Management plan

First is the management plan itself, which is the compilation and integration of the other six components.

Pasture management

Second is the pasture management plan, which includes the soils, forages and water resources. The management plan is grounded by the pasture management plan, which forms the foundation upon which the other components rest. The pasture management plan is the first component to address in intentional management.

Stocking rate management

Third is the stocking rate management plan, which entails the matching of grazing livestock numbers to forage production as well as managing and adapting livestock numbers as forage production changes within and throughout years.

 

Cattle management

Fourth is the cattle management plan. The cattle management plan includes the breeding, nutrition, health and husbandry aspects of a cattle program, which ideally complements the land resources of the operation.

 

Marketing plan

Fifth is the marketing plan, which leverages the attributes of the cattle and management for optimum economic results. Typically, this means managing the ranch resources so there is an element of flexibility within the stocking rate for retained ownership of calves or other stocker cattle enterprises as well as timing sales with favorable cattle markets and market cycles.

 

Record-keeping system

The sixth component is a good record-keeping system for ranch operations. This is a record-keeping system that allows easy tracking and monitoring of critical production and economic information. It also provides managers the ability to conduct enterprise analyses, prepare financial statements, and develop monthly and annual operational reports.

 

Personnel management plan

Seventh is a personnel management plan, which allows a manager to intentionally develop the skills and knowledge of ranch staff to build competencies and enhance their value to the operation. A personnel management plan addresses the needs of the operation, from onboarding a new employee to rewarding valued and tenured employees. It also includes performance evaluations, goal-setting sessions, training and professional improvement. — Hugh Aljoe,

Noble Research Institute director of producer relations