RANCHING Business
Keep and Use Ranch Records to Increase Profi tability By Lorie Woodward Cantu
M
OST PRODUCERS RECOGNIZE THE VALUE of good record keeping, but only a small percentage actu-
ally make record keeping and analysis a priority for their operations. Those who do tend to enjoy long-term success. “In my 25 years of experience, it has
become apparent that the most suc- cessful producers are those who keep the best records,” says Steve Swigert, an agricultural economist consultant at the Noble Foundation. “They know where they are, where they have been and where they are going. Plus, the re- cords allow them to make operational adjustments in a world that is always changing.” Good records also help producers to
spot trends, pinpoint cyclical changes and see things realistically. “Farmers and ranchers are optimists by nature
and have an innate ability to move forward,” Swigert says. “While this is a good thing for continuity, it can be problematic. Agriculture tends to be cyclical and people need a good handle on the past to make deci- sions about the present and the future.” Events in recent years, including extended drought
and record prices, have made the necessity of good records crystal clear. “Drought affects an operation from top to bottom,
making every decision more critical,” Swigert says. “The historically high market tends to camoufl age rising costs. If costs aren’t controlled, losing money is always a possibility.”
A complete picture Producers need to keep both fi nancial and produc-
tion records to get a complete operational picture, he says. Complete records can help producers accurately
determine the answers to questions such as “how far can prices fall and still allow me to participate in the business”? Using records, producers can determine whether the historic market is a good time for expand- ing their inventories or whether they will benefi t more from paying down debt, building up collateral or in- corporating another strategy into their operation, such as retaining ownership of a calf crop. Although complete records enhance a producer’s
ability to adapt to current conditions and prepare for the future, many are reluctant to begin because they mistakenly believe that a record keeping system has to be complicated to be good, Swigert says.
Keep it simple “For producers who are just starting a record keeping
system, my advice is to keep it simple,” says Swigert. “Envision what you would like to see in a report and then fi gure out what data you need to collect to generate
Editor’s Note: T is is the second installment in a 12-part series on “T e Realized Value of Management Decisions” that was developed in conjunction with the advisors in the Consultation Program of the Agricultural Division of the Samuel Roberts Noble Foundation. T e independent, non-profi t Noble Foundation, headquartered in Ardmore, Oklahoma, assists farmers and ranchers and conducts plant science research and agricultural programs to enhance agricultural productivity regionally, nation- ally and internationally.
tscra.org February 2015 The Cattleman 79
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