Principles Not Practices
Most of your neighbors think in terms of practices. Should I feed this or that? Should we run this type of cattle or those other ones? Do we calve in this pasture or the one over there? It is easy to understand why we spend so much time talking about practices. Everywhere you turn someone is preaching why doing this or that, will increase your profit or improve your life. At RMC, we teach principles. It is your job to figure out how to apply those principles to your business.
While eating lunch today I had a local rancher approach me asking, “Do you think I should split up my irrigated ground into smaller pastures and move my animals every few days?” My response was, “I have no idea … Are your plants getting adequate rest in between grazings?”
One of the grazing principles we teach, is that recovery period depends on the rate of growth. Getting the recovery period right is a principle that applies no matter where in the world you ranch. It surprises and frustrates me that some well-meaning people still approach good grazing management like it is snake oil. The principles have been steady for generations. Does anyone really think that desirable plants being grazed over and over again without the opportunity to recover, is a good thing? Now, a lively discussion about what the appropriate rest period is for your ranch during the different seasons is certainly a great conversation to have, once we have agreement on the principle.
On the economic side of the ranching business we have been teaching the Gross Margin Analysis for decades. It is based on the economic principles of calculating your Gross Product (the value of your production) and subtracting Direct Costs (those costs that increase proportionally). The costs can be cash costs, or non-cash costs, but they all represent value leaving the business. The remaining Gross Margin is the contribution of that enterprise to servicing business overheads and the profit target. The principle is that you must be able to compare the relative value each enterprise is creating. When we represent Gross Margin on a per unit basis, we have an extremely useful way to compare the performance of each enterprise, relative to the next, and project the scale necessary to meet our objectives.
At the Ranching for Profit School we don’t tell people what type of cow to run, when they should calve, or what bull to breed to. Heck, maybe cows are not even the right enterprise in the first place! We do give people time tested principles to follow that will lead them to their own discoveries of a plan.