Basics of management-intensive grazing (MiG) as coined by Jim Gerrish.
Although, Mr Pratt’s focus is often on finance and economics, here he explains simply one aspect of how to manage pastures for regenerative and profitable ranching.
I always chuckle a bit when i type out ‘ranching for profit’ because it’s almost an oxymoron! Yet, David Pratt, owner of Ranch Management Consultants and Ranching for Profit instructor, contends that there is such a beast if we ranchers use sound financial and economic principles.
Mr Pratt’s most recent blog discusses using debt properly. Now, okay, my mind goes immediately to the song, ‘Neither a borrower, nor a lender be. Do not forget, stay out of debt.’ Which then led me to wonder where that came from. I knew it was from Shakespeare’s ‘Hamlet’ (Polonius counsels his son, Laertes in Act-I, Scene-III of William Shakespeare’s play, Hamlet by saying, “Neither a borrower nor a lender be; / For loan oft loses both itself and friend.” But what about the tune?
Completely surprised when i discovered that it was created and made famous on the TV sitcom, Gilligan’s Island, which i watched religiously when i was young. SO FUNNY! It is sung to the tune of the Toreador Song in Bizet’s Carmen.
The Bible also has advice on debt and teaches us to guard against being in debt, likening it to slavery and bondage. However, debt does not seem to be a sin, but a tool to earn money wisely, but counting the cost before taking on the burden.
Solid figures to help me decide whether or not to pursue any land purchases should any come up for sale. Farms in Linn County, MO rarely change hands.
What and Why?
First, do you want to own a ranch or do you just want to be in the cattle business? Did you know that you can enter the cattle business without owning either land or cattle?
You are already thinking, “This guy has lost his mind!” But seriously, you can. You can lease land and take in pasture cattle–i.e. you can pasture someone else’s cattle on leased land for a monthly per head fee. Once you get a reputation for paying your bills and taking good care of other peoples land, ranch lease opportunities will come to you. You won’t have to look for them.
This is an excellent way for young prospective ranchers to get into the business without having to…
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Farmers and Ranchers seldom spend time WOTB, but now that it is too hot outside to be working in the business (WITB) cutting trees, spraying brush, etc, now it’s time to sit back and listen to David Pratt, owner of Ranch Management Consultants, and the dvd i just received entitled, “The Three Secrets for Increasing Profits” and begin WOTB. (Working On the Business).
Happy 4th of July!!! be safe out there!
“If our farms are not fun, not profitable, or are too much work, our children won’t want them…. Romancing the next generation is the ultimate test of sustainability.” Joel Salatin, Polyface Farms
Reprinted in part from Farm Journal, December 2015.
Reassess, Dump Loser Assets
Smart farmers will survive the challenges that arise in 2016. Just as they’ve done in the past, they’ll reassess their spending and recognize cash is king. I also recommend the following:
Understand true cost of production. Account for every dollar. It’s how you’ll quantify whether you’re headed for profit, loss, or breakeven. Don’t overlook your true living expenses, including what you set aside for college and retirement. “Tis the year for living frugally.
Scrutinize every line item in your budget. It’s the only way you can stop haemorrhaging cash and become leaner. Is there a way to cut your overall costs? I challenge you to cut all expenses by 1%. It might seem small, but I’ve witnessed this exercise lead to six-figure savings. Question input costs and negotiate with suppliers.
Be sure to liquidate all non-productive assets. You can generate thousands of dollars by selling losers.
Stay in contact with your lender. They realise down cycles occur. The last thing you want to do in tough times is cut them off.
My comments: Just because an asset is no longer working in your operation, doesn’t necessarily mean it’s a ‘loser’ for everyone. Sometimes our goals change and someone else needs exactly what we no longer need. Of course, if the asset is junk, be sure to sell it that way.