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Angus Productions Inc.
Copyright © 2013
Angus Productions Inc.

Don't Leave Money on the Table

Speakers encourage fellow ranchers to look for the undervalued assets.

TAMPA, Fla. (Feb. 6, 2013) — The concept of the book and movie Moneyball can be used in the cattle industry, said both Don Schiefelbein, Schiefelbein Angus Farms, Kimball, Minn., and Tom Field, director of the University of Nebraska–Lincoln Engler Agribusiness Entrepreneurship Program and rancher in Colorado. The Moneyball approach can find value in undervalued assets of your operation, they told Cattlemen’s College® participants at the 2013 Cattle Industry Convention in Tampa, Fla.


Schiefelbein explained that for the past 20 years it has been drilled into producers’ heads to be a low-cost producer. However, using his own family ranch as an example, he said the years they had the least amount of costs, they also had the least amount of revenue.


Profit equals revenue minus expense, he said. Bottom line, you must increase revenue. To do that, you must invest in quality and do your research. He urged producers to change their decision-making process.


Ignorance purchases on price; knowledge purchases on value, he said. “You have to spend money to make money! Don’t ever lose that mind-set.”


Schiefelbein gave many examples of how this works on his operation. For one, the operation buys new John Deere equipment every single year, reasoning the equipment has great re-sale value and the company has an excellent service department. They sell every year so the used equipment is still under warranty and thus has even greater re-sale value, and they have earned value rewards with their local dealer over the years.


This turns out to be cheaper than leasing equipment because the equipment is always reliable, Schiefelbein explained. The purchase cost breaks down to $3 per hour for smaller equipment, $5 per hour for medium-size equipment $5 and $10 per hour for the cutter.


They use the same mind-set in feed, genetics and vaccines.


Field emphasized that producers should use information-based systems to maximize profit. He suggested all producers take the time now to establish an estate plan. Once that is taken care of, really examine your operation. His own operation works with the five concepts of stewardship, information-based systems, flexibility, wealth creation and continuous improvement.


Ask the tough questions, and have others ask tough questions of you, Field advised. Those outside the industry can be a source of great ideas from a fresh perspective.


Production practices can increase revenue, also, like low-stress handling, source- and age-verification of calves, and being decisive early in the face of weather trends. Price your feed by the nutrient instead of just by the ton, so you get the most value out of it, he said. Genetics also provide control, and disciplined selection should be used.


“If you don’t have the numbers, you’re guessing, and guessing sucks. That’s why Moneyball is such an important thing to go look at, because it makes you think about how you look at the numbers, how you make choices, and how to find undervalued assets that you’ve been overlooking for years,” he concluded.


Now in its 20th year, Cattlemen’s College has established a reputation as one of the most thorough cattle producer education programs in the nation. Coordinated by the National Cattlemen’s Beef Association (NCBA), the program is sponsored by Zoetis Animal Health (formerly Pfizer Animal Health).



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