“If you always do what you’ve always done, you’ll always get what you’ve always got.”

This quote by industrialist Henry Ford is one that Dallas Mount likes to share with fellow ranchers as he challenges them to evaluate and improve their production practices.

Mount, owner of Ranch Management Consultants in Wyoming, spoke during a recent Ranching for Profit workshop in Belle Fourche, S.D. He told producers you can’t get different results without making changes.

Mount said most coffee shop conversations — and cattle industry programs — tend to dwell on three topics: weather, market and government. “What do these three things have in common?” he asked. “We can’t do anything about them.”

Instead, Mount advised those in agriculture to stop being a victim, dive into their operations management and “look at what you can fix,” adding that management is the biggest factor determining profit or loss.

Working ‘in’ or ‘on’?

Mount differentiated between working “in” vs. “on” management. He explained that “working in the business,” or WITB, includes activities such as feeding, fencing, fixing and other daily tasks. Essentially, these are the $20-per-hour physical jobs that take a lot of time, but perhaps don’t result in much change.

Conversely, “working on the business,” or WOTB, are the projects that require mental focus, planning and decision-making. Falling into the $200-plus-per-hour category, these tasks include strategic planning, marketing plans, drought plans, succession planning, economic forecasting, financial analysis, customer relationships, and even investments in education and personal development.

Mount said ag owners and operators often get so busy working in the business that they fail to work on it. As a result, the big-picture planning and financial improvements don’t always become a reality.

He admitted falling into this trap on his ranch by being too busy to address a necessary change. When he finally did, the project took half a day and resulted in a $40,000 difference in savings over the next six months. “It is not about working harder in the business; it is about taking the time to work on the business,” he said. “Producers need to step back and realize being productive doesn’t always mean being profitable.”

Actionable advice

Mount said he’s cautious about giving blanket advice to any ag producer, noting that every operation is different. “There is not a prescription on how to run a profitable ranch,” he said.

That said, he does encourage ag producers to look at their business by enterprise or division, and figure out what is working and what’s not. He said this might mean looking at hay production, cattle production and direct meat sales as individual entities. Then within those entities, look at gross margins and include costs for using land, paying yourself or taking draws for the family.

Mount said two indicators can give insight into a ranch’s finances. The first is pounds of hay fed per cow annually. “It’s not just about the cost of feed, but how many animals are being fed that feed,” he said. He likes to see operations that can support grazing 11 months out of the year most of the time.

For the second indicator, Mount likes to compute gross product per full-time employee. On average, he suggests about $400,000 is needed per employee but emphasizes these benchmarks may be different depending on each ranch.

In a parting comment, Mount said if he were to create a slogan to put on Ranch Management Consultants ball caps, it would be: Ranch Weird. He explained that the bottom-line advice is to think different and look outside the norms to find opportunities for holistic success across production, finances and lifestyle.

Upcoming events from Ranch Management Consultants include a Young Adult Ranching for Profit School in mid-July near Sturgis, S.D., for individuals up to age 26. Learn more about RMC and other educational opportunities at ranchmanagement.com.

Gordon writes from Whitewood, S.D.

2 ways to enhance ranch management

Wyoming rancher Dallas Mount, who advises other ranch operations through his company Ranch Management Consultants, offers two easy tips to enhance ranch management:

1. Create office space. Many ranches handle millions of dollars’ worth of transactions. Mount said that type of business deserves more than a kitchen table to go through paperwork. He believes a dedicated office space can help individuals focus more on managing the ranch like the valuable business it is. Also, having a specific office space may help separate ranch work from family time, which can be beneficial.

2. Look inward. Mount says it’s often easy for ranchers to point out what their neighbor should or shouldn’t be doing. He suggests looking at your own operation through the eyes of your neighbor and asking, “What are they probably saying I should be doing?” Mount said this can give ranchers a fresh set of eyes on their own management and may help challenge existing practices.