Do You Own Your Job or a Business? Are You Working for a Lunatic?

David Pratt
Presentation at Southwest Missouri Spring Forage Conference 

Ranch Management Consultants Inc. runs two programs, The Ranching For Profit School and the Executive Link.

"When we work for ourselves, we work at what we are good at." Pratt says. We are doing the $10 an hour job. However, we may be leaving the $100,000 per hour job undone.

Most ranches are likely losing money.

Pratt encourages the audience to subscribe to the Ranching for Profit blog.

What letter is most different?

b? c? d? q?

Look again:


What about the t?

We see things through the lens of our expectations.

What if the t is a threat? What if you didn't even see it? What if the t is an opportunity? It is a lot easier to see threats and opportunities at your neighbor's operation.

Too often, we wait till we are out of time and money to make changes.
We hear the phrase, "If you always do what you have always done you will always get what you've always got." But, in the cattle business, "If you always do what you have always done you will lose your shirt!" Ranching costs continue to go up.

We have to think about our paradigms and values. Nothing will happen until you change your paradigm. You will not do things differently until you think differently.

We develop 20 heifers per every 100 cows (replacement rate is 20%).  Half of our cows have 3 calves or less.
A bred cow costs about $1,800. A cull cow is worth $900. So, the value of $900 divided by 3 calves is $300. So, the average cow depreciates by $300 per year.

We teach our kids that they have to work to make money. Want some extra cash, do chores for mom or a neighbor. We then think that working harder and working more is the key to get more money.

The biggest problem in agriculture is not commodity prices or land prices. Young people blame the older generation for not letting them make changes. However, the younger generation knows with in a matter of months that the older generation is not going to change. So, the older generation may be responsible for the first few months. However, the younger generation is responsible for staying. We put up with bad situations for far too long. However, generational transfer is not occuring. Of the people who want to pass their ranches in tact to the next generation only 30% are successful.

Why does this happen?

• Poor communication and planning (no one want to think about their own demise, no one wants to talk about competing sibling interests, etc.)
• The business isn't viable
• Heirs are incompetent. We teach our kids how to raise calves and tend to crops. We don't teach them how to run a business.

Is your ranch a business or is it a collection of assests and a bunch of jobs?
Does your ranch serve a customer? If your ranch is to serve yourself, it is not a business. Businesses serve specific customers. Are you solving your customer's problems?

Does our ranch work for us or do we work for the ranch? Can you leave the ranch and everything go fine?

What is your reaction to $100,000 ideas? If the response is "We don't have time!", then you are not running a business.

If sold, would we be selling a system or assets?
Do we invest in professional development?

When we say "We ought to run it like a business" we are admitting it is not a business! It is either a business or it is not.

We work ON it, not just IN it. Should we own the cows or should someone else? If we own the cows, when should we be calving?

Does it make a profit? Profit is the breath of business. 

There are 4 ways to make money. Employee, Self-employed (you work for a lunatic), business, or investor.
If you are an employee or self-employed you have to work for your money. If you are a business owner or investor, your money works for you. If you work for money, you manage to avoid what you don't want. If your money works for you, you manage for what you want.

Lifestyle or business? If ranching is a business, the ranching lifestyle improves!

Derek, a Ranching for Profit alum said, "If we focus on business, our life gets better. If we focus on life, we worked our butts off! Now we work our mind much more than our bodies."

You are not there to support the ranch, the ranch is there to support you!

There is a difference between working in the business and working on the business.
Working in the business:
What should I do today? Put up hay? Feed cows?
Working on the business:
Should I own cows? Should I put up hay?

Need to set aside two mornings a week to work ON the business.


We need to work on the business, so instead of 30% of ranches being successfully transitioned between generations so that 70% of ranching businesses are successfully transitioned to the next generation.

Decker's Additional Thoughts
Genetic decisions, including breeding objectives, need to be an important part of working ON the business.

• Should I crossbreed? If so, which breeds should I use?
• Should I use a terminal crossbreeding system? If so, should I be buying heifers?
• How can I use genetics to better market my cattle?
• What are the goals of my breeding program?
• Should I be DNA testing my cattle? If so, which ones?
• Which economic selection index should I be focused on?
• How can I turn over generations faster?
• What data should I be collecting? 
• Who is going to analyze that data for me? Breed association? Private firm?
• Does my breeding program meet my customer's needs?
• How can I provide better customer support?
• Should I be buying my customer's calves?

What working on the business (WOTB) questions related to genetics would you add to this list?

Register for the 2018 Cattle Raisers Convention

Join the Texas and Southwestern Cattle Raisers Association for the largest ranching event of the year at the Fort Worth Convention Center, March 23 – 25, 2018. The 2018 Cattle Raisers Convention and Expo brings the best education and information to cattle industry participants. The event is open to all ranchers, landowners and cattle industry participants. You’re guaranteed to walk away with ideas and energy that will have a profound and profitable impact on your ranching operation.

Education 

This year’s high-powered, practical education will allow you to choose from a powerful lineup of educational sessions and seminars on topics that matter to you. The Cattle Raisers Convention and Expo will offer 35 hours of practical instruction, for beginners and advanced operators, that will provide you with the practical, real-world information you need to help improve your cattle operation. Along with this, the Expo will host a demonstration area with live cattle demonstrations to showcase tools and techniques you can take home and put to work.

New this year, the Convention will offer Livestock Handling Workshops on the evenings of Thursday March 22 and Friday, March 23. These workshops will feature in-depth livestock handling instruction and a special Ranch-to-Retail Workshop showcasing how beef carcasses are transformed into the retail cuts valued by consumers.

Cattle Raisers Expo

This year will feature the largest Expo in the history of Cattle Raisers Convention. With acres of equipment, technology and information under one roof , it’s a true showcase of the latest and greatest from the region’s leading agribusiness companies. From our indoor shooting range to world class exhibitors, the Expo has something for everyone.

Registration and Free Day Pass Code

To register for the 2018 Cattle Raisers Convention and Expo, visit www.cattleraisersconvention.com or call 800-242-7820. Get your free expo day pass online at www.cattleraisersconvention.com and use code EXPO2018.

Every Tool on the Belt

Written by Jackson Barry.
Canton, MO, Canton FFA, Shamrock 4-H in Clark County

To me, being a beef breeder in the 21st century means using every tool on the belt of the cattle industry. The goal? Produce the highest quality, most efficient cattle. Genetics is our biggest asset, because even the best management cannot overcome inferior quality. I will elaborate on the many potentials for higher production and profit through better genetics, record keeping, use of technology, and effective management.

First, genetics. We can and will select those cattle who produce the most for the least. To be more specific, instead of looking at output per cow, we must look at output per unit of land, as in pounds of beef that make it to the rail compared with acres used. The fact is, a larger cow will often produce more than her smaller contemporary. However, if we step back and see the big picture, we can run more moderate sized cattle on a given pasture than larger cows. Also, it has been proven that smaller cows have the capacity to wean a higher percentage of their body weight. So per unit of land, we may conclude that smaller cows can produce more pounds of beef, and lighter weight cattle attain a higher price per pound so the benefits are compounded.

An additional genetic strategy we must take is planned cross breeding. Economists will tell you there is no such thing as a free lunch, but they’ve apparently never raised crossbred cattle. Crossbred stock have the best production in the least heritable traits, namely fertility. In the case of a crossbred market animal, it will outgrow its peers on the same feed and exhibit superior health. In the case of the crossbred cow she will, on average, wean approximately 20% more compared to her straight bred counterpart. Additionally, longevity is a strong quality of the crossbred cow, meaning she may remain productive for additional years. If it takes $1500 to raise a heifer, and $500 to feed and vaccinate her through her life as a cow, she will become profitable at around six years old. The cross bred cow (weaning more) will come profitable sooner and have a higher first years profit. On average they will remain productive two extra years meaning more profit in the lifetime of a cow. Considering crossbred cows re-breed earlier and more often this disparity could potentially be larger.  To further illustrate the value of cross breeding, pretend we operate two herds of 100 cows for one century, one of purebreds and one of F1 cows bred to a third breed. This will be ignoring inflation, based on $800 per weaned calf per straight bred cows, and 20% higher value of weaned calves for crossbred cattle. Over the course of this time the straight bred cattle will incur $300,000 more in expenses (8 year vs. 10 year life) and the crossbred cattle will produce $1.4 million more in revenue. Divided back out this means $170 more per cow per year. Free lunch after all.

Keeping track of actual production and losses per cow paints a clearer picture of which cows are truly driving the profit in our herds. In the future, selection must be based on indexes and must include a big picture view, rather than selecting one trait such as growth or milk. Selecting either of these traits alone will produce animals inferior in the other category. Indexes can show which animals best combine traits and which compare favorably with their peers.

This idea of terminal vs. maternal brings us to our next topic: technology. Artificial insemination allows producers to import outside or superior genetics selectively, affordably, and easily. An even better option is sexed semen. A producer could utilize sexed heifer semen to breed replacements and clean up bulls with strong carcass merit and propensity for growth. This gives us the best of both worlds, a group of heifers to keep, and a group of calves to feed out for our consumer base. Innovations and benefits that pertain to artificial insemination and embryo transfer are numerous and have profit potential. We can also use these technologies to breed cattle that are more efficient and thus have a lower impact on the environment. I look for assisted reproduction to become an even more integral part of our industry as time goes on.

Lastly, management will play a large part in our ability to continue to produce more and more cattle on ever shrinking acres due to losses to residential developments and row crop production. I believe that management techniques such as intensive rotational grazing, tighter calving windows, low stress handling techniques and low stress working facilities are the way of the future. Research shows we can run at least 50% more cattle per acre on good rotational grazing systems, and in some cases, more. In addition to higher productivity of pasture, we allow the grass time to rest and regrow. Steep pastures will go without cattle for periods of time, reducing erosion.

A tighter calving window results in more calves of a uniform age and size which are more efficient to feed and will earn a premium when it is time to sell them. This keeps buyers happy and production of beef fast. The most recent Genex Catalog contains an article stating cows are most susceptible to miscarrying or aborting a pregnancy during the early portion of the first trimester. Unfortunately, this is when many cattle receive vaccinations, are affected by pinkeye and endure heat stress. What can we do to solve this? Heat stress is unavoidable but stress from human contact certainly can be prevented. Simply improving the corral used to sort and handle the livestock can play a big part in less stress, as no running or yelling is required. Supplements like Multimin®90 boost micro-nutrients and can help strengthen stock for periods of stress like summer.

My goal, long term, is for all producers to have one singular goal: efficiently produce high quality cattle with a lesser impact on the environment and consumer checkbooks. Not everyone will get there in the same way, but that is one of the great things about the United States: private ownership and individual producers stimulate innovation. This is where I believe the beef industry is heading in the 21st Century.

2018 ReproGene Sessions Announced

Written by Duane Dailey

Beef-cow herd owners will learn new ways to raise better calves at three University of Missouri meetings in March. The sessions lead producers from proven breeding to new uses of DNA.

MU Extension animal scientists David Patterson and Jared Decker will lead the ReproGene Meetings.

Management of fixed-time artificial insemination allows more live calves and more uniform calf crops.

New DNA tools make rapid advances in beef quality. Genomics allow breeders to predict traits of the next generation.

Traditionally, breeders use expected progeny differences (EPDs). Now, new EPDs add DNA data. Pedigrees and production testing are still used; however, genetically-enhanced EPDs give more accuracy. A simple DNA test with blood or hair samples replaces years of production testing.

With GE-EPDs, the added DNA speeds improving traits, whether for maternal or meat market ends.

Recent high premiums at packing plants signal demand for more high-quality beef. The USDA prime/choice price spread is the new guide to follow.

Consignors at fall and spring Show-Me-Select Replacement Heifer sales learn the value of maternal genetics. Heifers bred by fixed-time artificial insemination (FTAI) bring higher prices than bull-bred heifers. AI allows use of top proven sires on any farm.

Repeat buyers want more SMS heifers. With heifer breeding management, conception rates rise and death losses drop. Adding genetics improves quality.

Meeting times, places and local MU Extension livestock specialists:

• Mar. 8. Joplin Regional Stockyards, Carthage. Eldon Cole, Mount Vernon, 417-466-3102.
• Mar. 21. Mills Center, Laclede County Fairgrounds, Lebanon. Andy McCorkill, Buffalo, 417-345-7551.
• Mar. 26. Recklein Auditorium, 202 N. Smith St., Cuba. Ted Cunningham, Salem, 573-729-3196.

The events run from 4 p.m. registration with program at 4:30 p.m. Dinner is at 6 p.m. with a farmer panel at 8:15 p.m.

Patterson, MU Extension reproduction specialist, will lead with a review of fixed-time AI for heifers and cows. He will tell of improved breeding of 2-year olds.

Jordan Thomas, MU research assistant, will tell of his work using sex-sorted semen and split-time AI. New protocols improve conceptions.

Jared Decker, MU Extension geneticist, gives basics of EPDs and genomic predictions. Then he will tell how genomics increase profits.

With Decker's help, a new class of heifers has joined the SMS heifer sales. Heifers with GE-EPDs are called Show-Me Plus. Those rank above Tier Two heifers in price premiums.

The best part will be farmer panels, Decker says. Area farmers tell how they combine use of AI and genomics.

"We have lots of experience out there with Show-Me-Select Replacement Heifers," he adds. "We extend that resource. You don't have to be a SMS member to benefit from those protocols.

Taking a DNA test at birth provides a lifetime benefit in a cow herd. DNA does not change with age. The use of genomic tests was greatly simplified with the development of indexes. A producer does not have to look at a lot of different EPDs. Now a dollar value is added to each trait and those are combined into a monetary value. All animals in a breed, or a herd, can be ranked. That makes culling decisions easier.

"A big failure would be to buy the tests and not use the data," Decker says. "There is zero gain in doing that. No profit potential."