Management
I have written about each of these—how
they can be managed and how they affect
profitability. It is important to recognize that
there is much interconnectedness between
them. They can have an effect on each other
and then collectively on the “whole.”
We must remember that we are most concerned
about whole ranch profit and not about profit
per animal. Profit per cow can be highly distortive
of whole ranch profit or profit per acre.
A systems thinking perspective leads us to
conclude that we should reduce overheads,
market well and improve three key ratios:
• Acres per cow.
• Cows per person.
• Fed feed vs. grazed feed
I hope that you can see how these ratios are
linked to the determinants of profit and see what
economic power they have. As one example,
if you could reduce the acres per cow by one
half, you would essentially reduce the overhead
costs per cow by one half without changing
the total overheads. Striving for continuous
improvement of land leads us to good grazing
management which can greatly increase the
stocking rate or reduce acres per cow.
So, for profitable decision making and managing
ranch resources, become a “systems thinker.” I
This article was reprinted with permission
from the BEEF Magazine.
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