Have you ever stopped to consider what is unique about your operation making you profitable while other producers struggle? What assets do you have that are most important for generating profitability? Is it your cow herd or the grass you produce? Is it the machinery needed to harvest forages? Maybe it’s the fencing materials you use to split pastures or the new bull who’s going to transform your genetics? What is the secret weapon in your operation? What is the most important asset you possess?
Most cattle producers' first instinct is to identify their cows as their money makers. After all, why wouldn’t they be? We spend the majority of our time caring for, feeding, vaccinating and checking on them. They are what we haul to town to sell, after all. So why wouldn’t they be our money maker?
But what about the forages? Many cattle producers will tell you they are really grass farmers, not cattlemen or women. This seems logical as their primary crop is forage and the cow is just the harvesting mechanism. It really doesn’t matter if you use mama cows, stockers, horses, sheep, goats or some other four-legged creature to harvest it.
Maybe you think your secret weapon is technology. Throughout my career, I’ve seen producers chase many “silver bullets” they thought were the latest and greatest. Silver bullets take the form of new varieties of forage, new equipment, new vaccines or a new biologic fertilizer believed to solve all their problems.
The manager’s edge
Throughout my career, I’ve had the opportunity to work with many different types of operations and get to know the people who own and operate them. Do you want to know what I believe your secret weapon is? Are you ready for it? It’s you! You are your most valuable asset and the key to your profitability.
Many years ago, when I took Farm Management 101 in school, I learned every producer needs access to land, labor and capital. They don’t have to own them, but every operation needs access to each of them to function. But at the center of those three resources (land, labor and capital) is the manager. The manager decides how to put the resources together in the right combination to maximize profitability.
Lately in my writings I’ve been discussing the importance of creating the optimal business model for your operation. It is the responsibility of every man or woman, as the manager of your farm business, to unleash its true potential.
We have a PowerPoint slide in our grazing schools which declares 1+1 = 3. While you might initially think I can’t do first grade math, you’d be wrong. A quick review of grazing management concepts reveals when you add the grass (1) to the cows (1) in the right configuration, the sum amounts to much more than the individual parts on their own (1+1 = 3). I’ve seen many producers with exceptional cows lose money. (The cows weren’t the secret to profitability.) I’ve seen operations with tremendous forages struggle as well. (The grass wasn’t the single answer either.) However, when good managers combine them in the optimal configuration, the system turns profitable. The manager is the secret weapon. You are your most valuable asset and the key to creating profitability for your farm.
So before buying more inputs or trying to get a better price for what you are selling, make sure to take time to invest in yourself and ensure you are the best manager you can be. In farming or ranching, there will never be enough hours in the day; something else is always waiting to consume our energy. But a little time spent developing your skill set as a manager is often the most valuable investment you will ever make. Good luck designing your system!
