Adaptability Key to Changing Industry
by Kindra Gordon for Angus Productions Inc.
NASHVILLE, Tenn. (Jan. 31, 2012) — “Markets will continue to be volatile, and farm and ranch business operations will need to find innovative ways to operate,” said Jeff Geider, director for the Institute of Ranch Management at Texas Christian University.
Jeff Geider Photo by Kasey Miller
Geider spoke Jan. 31 at a workshop prior to the kick-off of the 2012 Cattle Industry Annual Convention in Nashville, Tenn. The workshop focused on the New Age for Forages and was sponsored by Dow AgroSciences.
“Changes bring challenges, but also opportunities,” Geider said.
Going forward, Geider said he anticipates an expanding emphasis on forages to add cheap gains to cattle. He predicts, “The value of gain on forage will remain more competitive than gain on grain-based feedstuffs.”
As the industry adapts to the rising costs of grain, Geider offered these suggestions for farm and ranch businesses:
- Do more with less. “The need to increase outputs with the same or even fewer inputs will be necessary to create efficiencies,” Geider said. As one example, he encouraged producers to transition wherever and whenever possible to forage-based animal growth.
- Decrease overhead. Get rid of non-revenue-producing capital assets, Geider suggested.
- Increase flexibility. “Volatility can be a good thing if you learn how to capitalize on upswings in the market,” stated Geider. Flexibility allows for those opportunities to be realized, he added.
- Utilize accurate asset allocation to optimize returns. Examples of this, Geider said, may be investing in fertilizer applications or weed and brush control if they allow you to grow more grass and ultimately increase stocking rates.
- Push the pencil. Geider concluded that in the future it will become more important than ever for farm and ranch business operations to be savvy about efficiency and economics “Focus on a detailed budget and breakeven for each of the farm or ranch enterprises,” he said. If you determine that there are enterprises in your business that aren’t making money, Geider advised, “Stop doing them.”
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