JANUARY 2017 • COUNTRY LIFE IN BC
Staring down the bottom line
Workshops show beef producers what the numbers are saying by EMILY BULMER
KAMLOOPS – Jim Forbes wants BC beef producers to make a profit.
Forbes, the BC Ministry of Agriculture’s regional agrologist in Kamloops, takes this mission seriously enough that he’s developed a workshop in partnership with financial professionals that focuses on the costs of production that ranchers face day to day.
The format of the
workshops is simple, and involve both individual work and group discussions. “We discuss the current cattle market – where it might be going and how they can look at doing projections themselves,” Forbes says. “Then we go into what is the unit cost of production and why producers should calculate it every year.” The focal point of the workshop is an Excel-based cost of production calculator. Producers can input their financial and production numbers into the spreadsheet and get a better handle on the economics of their operations. “It can be intimidating,” Forbes admits. “[We] have the producer gather their financial and production information and we show them where to put those numbers into this calculator so they can get their unit cost of production.”
The calculations use current market prices to let ranchers see if their operations are profitable or if they need to look at changing up how they do things.
“We discuss the numbers from a benchmark standpoint from past cost of production studies that the ministry has done,” Forbes says. “When we use benchmarks in our group examples we can show the participants if you change this factor, here's the effect on your bottom line.”
Since every operation is a little different, Forbes has done his best to adapt the workshop and cost calculator to as many situations as possible.
“A beef cow/calf enterprise really is three businesses – the cow/calf enterprise, replacement enterprise and forage enterprise,” he says. “We got a lot of questions last time about doing some improvements on the forage side of it. The producers want to get into a little bit more detail about what are some of the things they can do to lower their costs or produce more on the forage enterprise.”
This has prompted Forbes and his colleagues to develop a calculator tool that focuses on unit costs in forage production. It’s still in
development, but will be beta- tested with some producers
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A production calculator based on real-time market prices is helping BC beef producers recognize what they’re doing right – and when change is needed. EMILY BULMER PHOTO
later this year. Forbes hopes it will be ready soon after that to include in workshops.
Other adjustments improve the calculator’s analysis of the contribution of calves, feeders, and purebred cattle to operations.
Forbes and workshop partners George Geldart, Bob France and Terry Peterson presented to 120 people in 14 different communities across the province last year. Over 90 ranches were represented. “We also had nine students from the TRU Applied Sustainable Ranching course, and we also had a few bankers and one bookkeeper that attended,” Forbes said. The calculator often surprises producers with the results.
“There are [producers] that, once they fill out the calculator, say, 'Oh my God, I didn't know I was doing that well,’ or, 'Oh boy, I really need to look at making some
changes,'” Forbes says. Many farmers have more than one line of business – say, cattle and horse breeding – and until they start analyzing each line separately, they don’t know which is making them money and which is being subsidized by the more profitable operation.
“The cattle could be making them money, or the horses could be making them the money, and until you start working more with the numbers and hiving off what costs go where, you don't really have an understanding of whether or not one enterprise is making them money or not,” he says. Producers who come prepared stand to benefit the most from the workshops. All registered participants
receive a list of the information they’ll need to bring. To make things easier on them, workshops are typically held in January and February, when most producers have their annual financial info at their fingertips.
“Unfortunately, most producers only keep those numbers because they have to for tax purposes and we are showing them how to use those numbers to make better decisions with regard to how they're running their ranches,” Forbes says. “[But] that's the whole idea – you're going to keep those numbers anyway, so let’s make good use of them!”
Forbes hopes the workshops will make a
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