Ranch Profitability Workshops address ranch costs and profitability

Published: 2020
By Kari Lewis

Ranches often include multiple enterprises, such as cow/calf, hay production, heifer development, and land operations. Knowing each enterprise’s contribution is essential to determining overall ranch profitability. The Ranch Profitability Workshop Series included three sessions with Tris Munsick of the Plank Stewardship Initiative. The class attracted participants from 14 different ranches representing four local counties. Participants worked through a series of exercises to calculate ranch enterprise production costs. Participants were then able to work through the costs and profitability of their own operation’s enterprises. Through classes and discussion, participants noted their knowledge of key topics increased greatly, particularly for enterprise accounting, their ranch’s costs by enterprise, understanding of their ranch’s profitability by enterprise, and their operation’s cost of depreciation. Ranchers said the most valuable part of the series was breaking their various enterprises down to see strengths and weaknesses of the whole operation, developing a better understanding and use of economic terminology, and learning to plan for depreciation. As a result of the workshop, participants planned to make production and economic changes. A few examples included assessing the strengths and weaknesses of each enterprise on their ranch, investigating the possibility of developing heifers, and eliminate their haying operation. Producers also planned to utilize the spreadsheets provided to annually evaluate enterprises with current prices and regularly evaluate enterprise profitability.