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ENLARGE
Shelby Filley
The word “profitable” in agriculture sometimes elicits a chuckle among ranchers and farmers. But of course it is no laughing matter.
Many agricultural enterprises struggle to make a profit. Some lose a great deal of money, but others are quite successful. What factors are responsible for the difference between success and failure?
Although profitability is a complex issue, there are some things producers can control. One of those things is management of the business. Management — the adoption and implementation of certain practices of a farm or ranch — has a huge impact on profitability. University studies have determined which management practices have a positive affect on production efficiency and profitability.
Dr. Harlan Hughes, an agricultural economist from a university in the Midwest, wrote an article a few years ago that profiled the profitable beef producer. Dr. Hughes found that there was a high correlation between good management practices and profitability. The beef producers who followed a lot of good management practices had high profitability, producers who followed less of these had lower profitability, and those who followed little of these management practices routinely lost money.
Oregon State University Extension Service has been helping producers understand and implement good management practices since the early 1900s. Today, the Regional Livestock and Forage program in Douglas County, which has the whole university system to back it up, offers information, educational programs and consultations on livestock nutrition, reproduction, marketing, forage production and other topics to assist producers in identifying proven production management practices.
Along with using proven production management practices, an evaluation of production costs is needed. The practice of separating individual parts of a ranch into business segments called enterprises can help a manager identify and isolate costs that should strictly be applied to one part or another.
For example, the pastures and hay ground (forage produced by the ranch) should be a separate enterprise from the beef or sheep enterprise. Since profit is a function of revenues minus input costs, producers should not only know how much they receive for their product, but also the true unit cost of production (UCOP) or dollars to produce a unit of product ($/lb of beef, for example). Extension Service has handy tools called enterprise budget sheets and can assist you with completing an assessment.
Other opportunities for improving production management include publications such as “Critical Control Points”, which includes a self assessment to identify practices needing more attention. Educational programs are always on the calendar.
For example, from 10 a.m. to 2 p.m. Jan. 4, there is a special interactive video conference at the OSU Extension office dealing with profitability called the “2010 Cattleman's Update: Strategies that Pay.” Special guests from around the United States will be presenting information.
Contact the Extension office to learn more about the conference and to sign up for this opportunity. Space is limited. The $10 fee includes lunch.
Shelby Filley is the regional livestock and forages specialist for OSU Extension Service of Douglas County. Filley can be reached by e-mail shelby.filley@oregonstate.edu or by phone at 541-672-4461.
Many agricultural enterprises struggle to make a profit. Some lose a great deal of money, but others are quite successful. What factors are responsible for the difference between success and failure?
Although profitability is a complex issue, there are some things producers can control. One of those things is management of the business. Management — the adoption and implementation of certain practices of a farm or ranch — has a huge impact on profitability. University studies have determined which management practices have a positive affect on production efficiency and profitability.
Dr. Harlan Hughes, an agricultural economist from a university in the Midwest, wrote an article a few years ago that profiled the profitable beef producer. Dr. Hughes found that there was a high correlation between good management practices and profitability. The beef producers who followed a lot of good management practices had high profitability, producers who followed less of these had lower profitability, and those who followed little of these management practices routinely lost money.
Oregon State University Extension Service has been helping producers understand and implement good management practices since the early 1900s. Today, the Regional Livestock and Forage program in Douglas County, which has the whole university system to back it up, offers information, educational programs and consultations on livestock nutrition, reproduction, marketing, forage production and other topics to assist producers in identifying proven production management practices.
Along with using proven production management practices, an evaluation of production costs is needed. The practice of separating individual parts of a ranch into business segments called enterprises can help a manager identify and isolate costs that should strictly be applied to one part or another.
For example, the pastures and hay ground (forage produced by the ranch) should be a separate enterprise from the beef or sheep enterprise. Since profit is a function of revenues minus input costs, producers should not only know how much they receive for their product, but also the true unit cost of production (UCOP) or dollars to produce a unit of product ($/lb of beef, for example). Extension Service has handy tools called enterprise budget sheets and can assist you with completing an assessment.
Other opportunities for improving production management include publications such as “Critical Control Points”, which includes a self assessment to identify practices needing more attention. Educational programs are always on the calendar.
For example, from 10 a.m. to 2 p.m. Jan. 4, there is a special interactive video conference at the OSU Extension office dealing with profitability called the “2010 Cattleman's Update: Strategies that Pay.” Special guests from around the United States will be presenting information.
Contact the Extension office to learn more about the conference and to sign up for this opportunity. Space is limited. The $10 fee includes lunch.
Shelby Filley is the regional livestock and forages specialist for OSU Extension Service of Douglas County. Filley can be reached by e-mail shelby.filley@oregonstate.edu or by phone at 541-672-4461.
