“Economics” is often a word that many farmers and ranchers might avoid or misunderstand. But Victor Tuschen, who serves in a new role as a state economist with the USDA Natural Resources Conservation Service in South Dakota, is on a mission to change that.

Tuschen says as farmers and ranchers work to be natural resource stewards and implement conservation practices, they are often applying economic principles as they look at efficient resource allocation.

“Economics is a comparison of the trade-offs of different choices,” he says, nothing that economics is not the same as accounting. “Every farm or ranch has different economics because everyone’s operation is different.”

Because of those differences, Tuschen can’t give one-size-fits-all recommendations. But he helps farmers and ranchers better understand and evaluate their own economics through the three-step GPS Method. The steps are similar to planning a vacation with GPS as a guide:

1. Know your current location. Tuschen says knowing your location involves record-keeping to track expenses, inventory and cash flow. It may include details like weaning weights, reproductive rate, winter feed costs and hours of labor.

2. Identify your destination. This means evaluating the goals you have for your operation — and determining the obstacles to overcome as you work toward the future. “By documenting your current situation, red flags often become apparent,” he says. “Once those issues are identified, you can begin to consider alternatives to address those concerns and progress toward achieving future goals.”

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As an example, if winter feeding costs are excessively high, cover crop grazing could offer an alternative to help lower those costs.

Other scenarios might include low weaning rates, poor reproductive rates, and high baling or transportation costs. Options to address these issues might include improving water quality or livestock protection, or grazing crop residue or bales left in the field.

Each farm and ranch scenario is different, economics means looking at which option offers the best alternative for that specific situation.

3. Monitor your journey. This step involves having processes in place to evaluate results of the management practices. This may include body condition scoring, forage analysis testing, rangeland health or pasture condition scoring, or other production metrics.

“Monitoring means, ‘Don’t put the map or plan away,’” Tuschen says, adding that “monitoring various indicators can help with the continual process of improving.”

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And, as with any trip, Tuschen says at times it’s necessary to ask for directions. With regard to farm and ranch economics, he encourages farmers and ranchers to ask for assistance from resources such as NRCS, bankers and mentors. You can reach Tuschen at 605-651-7503 or [email protected].

“There are many resources available to farmers and ranchers, and many are offered at no charge,” he says.