April 9, 2020
As I sit to write this, I am thinking of three things: 1) the excitement I see in some ranchers as they embrace management ideas that have great potential to improve their profitability, quality of life and family legacy; 2) the reluctance I see in others (even those losing money) to change or even consider ideas beyond just getting a little better at what they are currently doing, and; 3) the uncertainty of a future following a pandemic that will have profound economic effect.
In reverse order, the pandemic will certainly have devastating health effects on many people, causing many deaths. I pray for government leaders who are making decisions with the best information they can muster—certainly knowing that the decisions will not perfectly fit the less-than-perfectly predictable situations.
The loss of life to the COVID-19 virus will bring great sadness and loss to those most closely affected. However, I fear that the loss of life to suicide or failing physical and emotional health along with the loss of hope, purpose, and job and business success from a disrupted economy may possibly be a far greater consequence.
Inflation most assuredly will happen, but its impacts will not be equal across products—inputs, commodities, consumer goods, etc. Ranchers will live in a different world. My guess is that it will be less friendly economically. I hope I am wrong, but I would manage as if my guess is right.
The reluctance to change is frightening. Since the high cattle prices of 2014 and 2015, rancher profitability has not been good. Ranch foreclosures or selling to avoid foreclosure to preserve the remaining equity have increased, balance sheets are too often in a state of decline, and young people too often are not coming back to the ranch.
Managerial changes need to be made for economic survival and the pressure is going to increase. Just getting a little better at what you currently do is seldom good enough. If you are struggling economically, a change of mindset that leads to changes in “what” you do rather than “how” is needed. It’s time to become a possibility thinker.
The hesitance to change comes in many forms: 1) “This is the way we have always done things;” 2) ranchers are so busy in the daily grind that they don’t have or take time to see, study and learn new ways; 3) just plain stubbornness—“We’re smart people, we know how to do things;” 4) laziness—sometimes it’s easier to work physically on things that you know how to do than to study, think and analyze on things that are new or different, and; 5) the fear of getting laughed at by the neighbors when you begin to use practices that are new or different—we have an ego-centric need to be accepted.
My guess, nearly a promise, is that many of those who don’t change will find it more and more difficult to make a living as full-time ranchers and many will go out of business and/or find a job in town. So, try to change the mindset. Become an open-minded observer and learner.
It is truly refreshing to see a growing number of ranchers who are looking at, thinking about and attending events that emphasize soil health, grazing management, no-till farming, cover crops, selection of calving season, cost reduction strategies, year-round grazing (sometimes not quite), overhead reduction, enterprise selection and stacking of enterprises, marketing, etc.
Occasionally I hear someone of the younger generation say, “Progress here happens one funeral at a time.” C’mon, Dad/Grandpa. Don’t let this happen at your place.
Start blending your thoughts with those of the younger generation. Your wisdom and experience combined with their enthusiasm and thirst for ideas and effective change can make great progress if you will put ideas on the table, discuss pros and cons (pros first), evaluate ways to minimize risks or enhance the profit of the new idea, take some well calculated risks and move ahead.
Why do we discuss the “pros” of a new idea first before the “cons?” It is easy for us to be a naysayer and see the downside or potential risks. Look to the positive side first. You will make some mistakes and learn from those; but don’t let the mistakes keep you from moving ahead. There are many ideas that, if carefully implemented, have minimal downside risk and huge upside potential.
I have seen many ranches in the last 10-15 years that are nicely profitable every year. Only a few were fortunate or smart enough to start out right and then continue to improve from there. Most had to have a change of mindset and then start the learning and doing process to make very significant changes to their lives and bottom line.
Not only are these ranchers profitable with resilience to weather droughts, poor markets, etc., they also enjoy what they do. If they ever express a regret, it is that they wish they had made changes faster.
Teichert, a consultant on strategic planning for ranches, retired in 2010 as vice president and general manager of AgReserves, Inc. He resides in Orem, Utah. Contact him at [email protected].
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