RANCHING Business
that report. For many producers, their primary questions can be answered by accumulating and analyzing 2 or 3 key pieces of data.” For example, one of the key
indicators of profi tability is per- cent weaned calf crop. To generate that number, an
Good records also help producers to spot
trends, pinpoint cyclical changes and see things realistically.
operation would need to document the number of cows exposed to bulls during the breeding season and the number of calves weaned from that breeding. (A pro- ducer would need records from 2 calendar years be- cause of 15- to 18-month elapses between conception and weaning for a typical cow-calf operation.) A good target for a cow-calf producer would be 85 to 90 percent. “There is no one-size-fi ts-all record keeping system,”
Swigert says. “Producers need to commit to collecting and analyzing the information that matters most to them. Otherwise, they get disillusioned and the infor- mation sits unused.” With that said, a good starting point on the produc-
tion side is a complete inventory. The inventory should include a list of cattle by class, feed, equipment and land. While inventorying cattle once a year is adequate, it’s better to inventory twice, once at the beginning of the fi scal year and once at the beginning of the breeding season. The cattle inventory should include a record of all deaths, purchases, and sales of both raised and purchased animals. “Many producers think that they can keep track of
the number of animals on their places in their heads, but actually less than half of the producers know with certainty the number of cows they have this year ver- sus last year if they don’t write it down,” Swigert says. “A good inventory is a key to being able to determine profi tability.” Additional basic pieces of production data include
weaning weight, sale weight and number of grazing acres.
More than just the Schedule F On the fi nancial side, many producers operate using
their Schedule F as their primary source of fi nancial information, he says. “In my 25-year career, probably less than half of
the producers I’ve worked with have had more than their Schedule F fi nancial information when we fi rst meet,” Swigert says. “At best, Schedule F is a basic income and expense
80 The Cattleman February 2015 Learn more about this topic at the
2015 Cattle Raisers Convention March 27 to 29, Fort Worth.
thecattlemanmagazine.com
statement that has been infl u- enced by IRS tax considerations. It doesn’t measure the profit- ability or fi nancial position of a business.” To measure profi tability and
position, the Farm Financial Standards Guidelines suggest that producers have a balance
sheet with both cost and market valuation; accrual adjusted income statement; cash fl ow statement; and owner equity statement. This information is generated by combining informa-
tion from the producer’s inventory and cash accounting system. Accountants can help set up the cash account- ing system, either by using computer programs such as Quicken or QuickBooks, or in a general ledger. They can also help generate the reports. On the production side, records can be computerized
using a program such as Cattle Max, or they, too, can be kept by hand in a ledger or in an Excel spreadsheet. Computerization makes it easier to compare records across the years, but it is not necessary for success, Swigert says. “At the Noble Foundation, our Outstanding Coop-
erator Award is named after the late Leonard Wyatt,” says Swigert. “He kept the best, most useful records I have ever seen — and he did it all by hand.”
Your information helps with your decisions The key is not how the records are kept, but how
they are used. Gathering the information isn’t helpful unless the data is analyzed and used to make deci- sions, Swigert says. Sometimes producers aren’t sure how to proceed
with the analysis. In those cases, it can be helpful to have the expertise of advisors from organizations such as the Noble Foundation or the Extension Service. “Outside advisors have the benefi t of objectivity and
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