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Animal Health Notebook

Natural model can help with profit per acre

We need healthy soil and net profit every year to stay on the farm.

 

Cattle sales give us the ability to profit from the excesses of soil health, plant productivity, moisture and sunshine.

Soil and plants require cattle and cattle require plants. The natural model gives us the rules by which we strive to understand and utilize. We do not break nature’s rules. They break us. We are here to tweak nature not argue and/or fight the Creator.

Cattle operations historically have a record of sea-sawing up and down across an economic line known as “breakeven.” Stay below the line for a long enough period and we might land back in town. A lot has been said and written about cattle performance and profitability. Many facts and figures and approaches have been and are often used, and routinely result in confusion.

In my opinion profit per acre is the only important figure that I actually have real interest. It requires that we know and figure all the cost and all the receipts. High profitability per acre must be an annual event due to the nature of our business. Our ranch must be profitable every year because the million dollar deal is just not gonna  happen prior to our exit.

High production typically lies on the near opposite side from high profit per acre. That is why I have little interest in high production.

Soil health is the basis for high profitability per acre. That is why I have so much interest in soil health. Soil health is the basis for animal health. Animal health is a requirement of high profitability per acre. Ditto the same for plant health and productivity.

Like many of ya’ll, I have spent a lot of years in monoculture farming with emphasis on the growth of one, two, three or four particular plant species. Some years are normally good and others are a wreck. There are a lot of in-betweens but the wrecks usually trump the goods and wash our effects south in the direction of, or below the breakeven line.

Most performance data fails to account for profitability per acre. The same is true for most advertisements. “Super cows” and good cows have one thing in common and that is death. They are all going to leave. But good cows are often profitable for many years. This is seldom true of super cows.

My friend Walt Davis recommends strongly that all facets of the ranch/farm be broken into different profit/loss statements. I agree.

It should be rather easy to break the cow/calf, stocker, grass finishing, hay, fruit and row crops into separate businesses on paper and figure each on a per-acre basis. Some equipment is used in more than one part of the entire operation, but many times we use equipment because we own it -- not because we need it.

The take-home message here is you need profit per acre every year.

If soil health is improving, plant health and diversity are improving and animal health is improving, we should be headed for increased profits per acre.

When inputs and costs per acre are eliminated or reduced drastically this is almost a no-brainer.

By the way I do not think there is a law requiring us to spend every penny we earn and it is legal to save a portion every year. Mississippi grazier and veterinarian Gordon Hazard says it takes discipline to accumulate and keep the pile weighted down. I agree.

Incidentally, we'll have Hazard and Beef Producer editor Alan Newport and several others helping us put on 2016’s best Ranch college at 499 Ranch in middle Tennessee in September.

Of the 2.3-day event, 60% will be outside in intense small groups. E-mail us at [email protected] or give us a call at (931) 761-5001 if you have serious interest. We have a rather complete outline. Enrollment is limited to 60 participants.

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