Category: management

Wealth really comes from sunshine

Improving the life processes that convert sunshine to energy on the ranch or farm can increase all forms of wealth.

Walt Davis 1 | Feb 18, 2020

Ranching is different things to different people but like all types of agricultural endeavors, it comes down to converting sunlight into wealth through green plants and photosynthesis.

This wealth can take several forms aside from money. Grazing animals, especially ruminants, can convert vegetation that is inedible to humans into high quality food. This can be done, without machinery, on land that is unfit for cultivation. Lately this has been getting press under the guise of “upcycling.”

There are other beneficial products, but one desperately needed in today’s world is improved water management. In some situations, if grazing management is used properly, it can double or triple the amount of precipitation captured and used to grow vegetation. This management will also greatly increase the amount of water that accumulates in the soil and in subsurface aquifers.

Proper grazing decreases the likelihood of flooding and increases the usefulness of precipitation. These advantages come about through creating the conditions that allow water to enter and be held by the soil. Foremost amongst the conditions is keeping the soil surface covered with organic matter.

I was on a ranch recently in the hot dry summer when a four-inch rain fell in about four hours. This was followed several hours later by a two-inch rain. This ranch is rolling sandy loam with sandy clay subsoil and has some steep slopes. Little, if any, water ran off the ranch while the neighboring areas had heavy runoff of muddy water.

The difference was the amount of bare ground on the two areas. The ranch with good ground cover absorbed the rainfall to the degree that the tanks (ponds to those of you not from Texas) caught no water. Twenty-four hours after the rain stopped, clear water began to flow from springs into the tanks.

What is the value of six inches of rain stored in the soil rather than running down the creek? There are millions upon millions of acres world-wide that are totally ineffective in capturing and storing rainfall. Water shortage for crops but also for humans is already critical in many areas. Good grazing management can dramatically improve the water cycle of these degraded areas while producing food and profit.

A second condition critical to improving water capture and retention is soil organic content. Organic matter that has been processed by microbial action can seize and hold many times its weight in water. Soil life is dependant on soil organic content, and plants are dependent on soil life. Soil life, especially mycorrhizal fungi, produce the organic compounds – essentially the glue – that holds soil particles together in aggregates and gives soil the porosity and permeability that allows it to take in and hold both water and air.

A big portion of soil organic content comes from root exudates – mostly carbohydrates – pumped into the soil by living plants. In a classic example of symbiotic relationship, the root exudates nourish the soil lifeforms which nourish the plants that provide the root exudates.

Given the opportunity, natural forces promote life to the benefit of the whole soil-plant-animal complex. This is not always a straightforward process. Drought can cause an explosion of grasshoppers by killing the fungi that normally limit the viability of the hopper eggs. When normal weather returns, the fungi will return, and balance will re-establish in insect populations. If we intervene with insecticides spread over large areas, the ecology of that area becomes unstable with ongoing wide swings in both populations and numbers within populations.

Catastrophes such as wildfire, drought and flood happen in the natural world, but only man prolongs the effects of these events. Millions of acres of grassland have been destroyed by holding stock on areas that can no longer feed them. The diversity of life from plants, animals and microbes provides stability and productivity, but it is destroyed when management focuses on “kill the pest” rather than on fostering the conditions that promote health through out the local environment. This may sound sophomoric, however it is not only possible but much more effective financially, ecologically and to human benefit than what is common practice over most of the world.

Education of One’s Self

“Our past shapes us, but it does not have to define us. Trust the timing of your life while focusing your thoughts and energy on what is in your control.”

To venture deeper into your inner spirit, you have to humble yourself and acknowledge what you do not know. The more questions you have about life, the more you will improve and grow. When focusing on a change I break down the goal into the most manageable action and then I build a strategy from there.

Focusing on evolving each day becomes a unique opportunity to remove the walls in our life while liberating our minds. Educate yourself every day until your last breath. To excel, you must have the courage and discipline to show up at my very best. You compete with one person and one person only, yourself. You compete to be the greatest you can be.

On our self-discovery journey, we must free ourselves from automatic judgments that arise with every experience we have. Attempt to understand other people’s perspectives. The world unveils its secrets to us very slowly. We never know anything for sure. So roll with the discoveries while being patient and open to connecting with new people who might not look and think like you.

The road towards self-mastery is a marathon, not a sprint. As we begin to acknowledge and dismantle the self-limiting and disempowering barriers in our lives, we allow for a more authentic version of who we are to emerge. Our past shapes us, but it does not have to define us. Trust the timing of your life while focusing your thoughts and energy on what is in your control. While you may not control everything life presents, you can refuse to be reduced by it.

— Coach George Raveling

7 Steps to Creating a Successful Ranch Management Plan

7 Steps to Creating a Successful Ranch Management Plan

By Hugh Aljoe
Director of Producer Relations

Posted Jan. 1, 2020

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.
  • You don’t routinely test and analyze your pasture soils, yet you routinely apply fertilizer.

I’m sure you can think of other s 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.

Cattle in pasture

7 STEPS OF INTENTIONAL MANAGEMENT

1. MANAGEMENT PLAN

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

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

Overcoming Barriers to Entry for the Next Generation of Ranchers

By Dan Childs
Senior Agricultural Economics Consultant

Posted Nov. 6, 2019

 

The U.S. Department of Agriculture has been saying for years that the average age of the American farmer is going up. The latest estimate of the average age is 59.3 years, as the baby-boom generation gets older. As a result, it has been estimated that 70% of the land in agriculture will change hands by 2031. This is a startling forecast and one worth contemplating in terms of how the transition will occur.

The number of farmers and ranchers in the United States has been decreasing, with the latest estimate just a bit more than 2 million in total. Fewer children are being raised on farms or ranches, too, and many of those who have are choosing other occupations, with no plans to return to the farm or ranch. Young people who have developed an interest in agriculture but do not have farm roots face a variety of barriers to entry as beginning farmers.

According to the balance sheet of agriculture, the total value of all U.S. farm assets is just over $3 trillion. When divided equally among the estimated number of farmers in the U.S., the average investment per farmer is $1.5 million, with the majority of that being in land. So how does an interested young person get started, when the day one could buy land and expect to pay for it by working it is long gone?

70 percent of the land in agriculture will change hands by 2031. This is a startling forecast and one worth contemplating in terms of how the transition will occur.USDA estimate

LAND: OWN OR LEASE?

It is generally agreed that the biggest barrier of entry to agriculture is the price of land. When the price of land prohibits entry into agriculture, what is the best alternative? Typically the answer is to lease it from a landowner. Lease payments are usually much lower than land payments, even in today’s low-interest-rate environment. However, leasing does come with challenges. Often landowners will only negotiate one- to three-year terms. It is usually not feasible to develop infrastructure through permanent structures or invest in long-term soil health improvements with lease terms no longer than three years. Aging farmers need to be more amenable to longer term-lease agreements or willing to recognize improvements lasting longer than the lease term by cost-sharing or including a refund clause if the lease is terminated.

OPERATING CAPITAL AND DEBT CONCERNS

A second barrier common among many people wanting to have their own farm is operating capital. Granted, there is a greater awareness by some lenders such as the Farm Service Agency and the Farm Credit System, which have created special credit standards for young, beginning and small farmers and ranchers to be able acquire financing. However, then debt becomes a concern. As noted in the below figure, U.S. farm income has been somewhat of a roller coaster. Managing debt in such an uncertain landscape can be very difficult.

ChartU.S. Net Farm Income 2000-2019 Source: USDA, Economic Research Service, Farm Income and Wealth Statistics

PROFITABILITY AND RISK MANAGEMENT

This brings us to a third barrier: the lack of consistent profitability. The perils present in production agriculture are many. At the end of each day, every agricultural producer must be an astute risk manager. First and foremost, weather risks could be at the top of the list, with markets or commodity prices not far below, followed by government policy, including regulations, trade, tax and labor laws. Many other risks exist that challenge consistent profitability. Considering all these factors, it becomes apparent that agricultural producers truly have a genuine passion for the work they do and the contribution they make to feed the world, despite the risks.

ENSURING THE FUTURE

The U.S. has not had to depend on another country for food, and that is a great blessing. We have achieved national food security because of the work ethic and productivity of American farmers and ranchers. Yes, there are obvious reasons for the U.S. to trade with other countries and benefit from our comparative advantage. Fair trade between countries helps both consumers and producers.

Much work lies ahead for the U.S. as we navigate the transition of farmland to the next generation. It is paramount that the transition is made to people who have the same passion and dedication to production agriculture as past generations, who have made U.S. agriculture the envy of the world.