Category: Economics & Finance

Game Changer?

Income – costs = profit, right? The answer is “sort of.” It’s a little more complicated than that because we need to adjust for inventory changes, consider non-cash costs like depreciation and non-cash income like retained heifer calves. But over the long haul, for the most part, income – costs = profit. The obvious conclusion […]

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Low Hanging Fruit

Someone called me asking if I was available to do some consulting. I explained that even though our name is Ranch Management Consultants, we actually do very little consulting. After folks have been to the Ranching For Profit School they may need some coaching, but they usually don’t need consulting. When we consult, we only […]

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Smart Debt

A lot of people tell me that they want to be “debt free.” They are tired of making big interest payments on land, livestock, machinery and their operating note. They have had too many sleepless nights worrying about making the next payment. They believe that if they didn’t have to borrow money they would be […]

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Free Money Can Be Expensive

Letting government programs dictate your management and set priorities can be costly. The most obvious example is probably the emergency feed program. In drought impacted areas, this program incentivizes ranchers not to destock. The result has been severe overstocking during drought, when the impacts of bad management are intensified.   Even programs like EQUIP (Environmental […]

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What Would You Do With $1,000,000?

In a recent Three Secrets For Increasing Profit® workshop I asked participants how much profit they want to make. It is an important question because you can’t hit a target that doesn’t exist and it’s impossible to build an intelligent plan unless you have measurable goals. But it’s an unfair question too. It’s unfair because […]

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Going Around In Circles

Rotational grazing doesn’t work. It doesn’t work for at least two reasons. One reason it doesn’t work is that, rather than rotationally graze, most people rotationally overgraze. They get overstocking and overgrazing confused. Overstocking happens when you have more animals than you have grass to support them. Overgrazing happens when you keep animals in a pasture […]

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Overheads Are Fixed!

What would you have to do to increase profit in a business where you couldn’t control costs? You’d have to increase production per animal, increase the number of animals you carry and hope for higher prices. These are the strategies most ranchers have followed, and Universities have recommended, for generations. It’s a logical approach if […]

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The 3 Secrets For Increasing Profit™

There are three, and only three, ways to increase profit in any business. Stan Parsons called them The 3 Secrets For Increasing Profit™ and introduced them to Ranching For Profit students in 1980. Lately I’ve seen more and more articles by industry pundits that incorporate the 3 secrets in articles and conference proceedings. They rarely […]

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You Might Be Ranching For Profit If …

You might be ranching for profit if your spouse doesn’t have to work in town so you can have health insurance. If you are making a profit you ought to be able to pay yourself whatever it would cost to replace yourself and the business ought to be able to provide a benefits package, including […]

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Monuments to Tax Avoidance

We have our end of the year tax appointment next Monday. That reminded me of a ranch I visited a few years ago. The owner’s son showed me around. As we pulled out of the yard we passed a big aerator they’d bought to crush sagebrush. If you aren’t familiar with aerators, the drum is […]

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