Clay Mathis with King Ranch Institute for Ranch Management Explains How to Find Profitability in Today's Cow Calf OperatonsThu, 14 Nov 2019 16:54:18
Radio Oklahoma Ag Network Farm Director Ron Hays sat down with Dr. Clay Mathis, Director of the King Ranch institute for ranch management at the recent American Angus Convention in Reno to talk about some of their management decisions on how they can be profitable. Mathis says it starts with understanding where you can find leverage in your production system. “We know if we are strictly focused on profitability we can look at the cost side of the business and know that its going to boil down to labor, feed, and depreciation, and collectively those will make up more than 50% of the total cost to the enterprise.” Mathis says if we know that, and know how to drive revenue in terms of reproductive performance then producers can look to balance those things together to find that recipe, and it’s a different recipe for every operation.
The cost of maintaining the mama cow has been going up, and its harder than ever for producers to make sure they are making money. Mathis says we have to think “How do we respond to these rising costs more? And really we have to take a close look the uniqueness of each production system and figure out what’s it going to be in the future that is going to make the difference?” Mathis goes onto say that ranchers are going to have to be willing to look deeply into what the challenges that each ranch faces to find a solution that’s high leverage to fix the problems.
The drought in the Texas/Oklahoma region that occurred a few years ago really changed the mama cow herd, and changed the way ranchers look at profitability. During that time, it was not just the drought that was challenging, there were also very high prices, and so much volatility in the markets. Mathis says “When we look down the road producers will have to be paying attention to those fixed costs on the ranch and how we can maximize cow inventory so that there is enough revenue to cover those fixed costs, all while still managing those natural resources appropriately as well.”
With programs like Beef Quality assurance and Sustainable beef the focus is on traceability and the ability to understand how our animals flow through the pipeline. Mathis says its very important the way we manage the animals. “Anything we can do to make sure consumers and those that question our industry that they understand how dedicated we are to the care of these animals. Anything we can do that helps us add consumer trust to our business is only going to be a good thing in the end."
Click on the LISTEN BAR below to hear more from Clay Mathis as he talks with Ron Hays in today's Beef Buzz.
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