By Caitlin Richards
Detailed ranch records can help ranch managers make decisions with confidence. Records allow ranch managers to conduct an overall analysis of the operation to identify the strengths, weakness, and opportunities for growth.
Any rancher can follow a professional ranch manager’s lead and tap into the power of good recordkeeping. Standardized Performance Analysis (SPA) is a tool that cow-calf producers can use to convert their records to data-backed decision-making guides. Using an operation’s production and financial records, SPA conveys an operation’s overall performance.
The more detailed a producer’s records are the more they will get out of SPA. Stan Bevers, King Ranch Institute for Ranch Management economist and owner of Ranch KPI, a ranch management consulting company, shares how producers can take their records to the next level.
Improved production records
The basic production records that producers might consider keeping are inventory numbers and weaning weights. With these records, ranchers have the basic figures to analyze their operation. More detailed inventory numbers can help ranchers dive deeper and spot areas of efficiency, losses, and growth potential.
Bevers suggests basing the herd inventory on the cow-calf production year instead of the calendar year. This allows producers to incorporate an adjusted exposed female figure by classifying females relative to the production year.
“This is where good inventory records are essential,” says Bevers. “I can ask somebody how many females were out there when they turned the bulls out, and their first thought is ‘that was only a few months ago.’ What I am really talking about was a year-and-a-half ago.”
When thinking about the 2019 spring calf crop, which will be weaned in the fall of 2019, producers need to know their female inventory numbers from May of 2018. Rather than tallying a basic female count, Stan suggests breaking the female inventory number down to improve the record.
At the beginning of the breeding season, Bevers suggests, classify all the females that the bulls were turned in with as exposed females. Then, note the cattle that will be culled this year and will not be in this year’s breeding herd. This allows producers to take a cull cow into account while she still may have a calf from the current calf crop on her.
After the breeding season, Bevers suggests pregnancy testing the females to determine inefficiencies within the herd.
At this point, most producers decide to either sell the open females that were intended to be bred or to purchase more females. The female inventory record would show open or bred cattle sold, which he calls “opens out” and “breds out,” or open or bred cattle purchased, called “opens in” and “breds in.”
Bevers says, “The open females that a producer sells will now stay in the adjusted exposed female figure. The producer wanted her to get bred and she didn’t. So that identifies an inefficiency and is held against you. At the same time, if a producer identifies females that are bred and decides to sell them, those females are taken out of the adjusted exposed female calculation because you managed your bulls and females correctly to get the females bred.”
It’s now the new calendar year and calving season is about to begin. It is hoped that all the females in the pastures are bred, maximizing the efficiency of the herd. Once the females start calving, the female inventory should record “pairs in” (purchases) and “pairs out” (sold). Again, tracking the ins and outs allows producers to account for any sales or purchases that they may be making.
“Now at this point, I can do the math and come up with the adjusted exposed female number,” says Bevers, “and that is the number I use to determine all the production results like calving percentage, weaning percentage and pounds per acre.”
With new calves on the ground, the inventory record should include a calf count. The final piece to incorporate into the inventory record is calves weaned in the fall.
When the inventory record for the 2019 calf crop is finished, Bevers reminds producers that the inventory record for the 2020 calf crop is just beginning.
“That is where it can get complicated,” he says. “At the same time, you are already starting a second production cycle. So that becomes something producers need to think about and account for.”
The calf inventory number is often the most significant number for producers because it generates revenue. It, too, can be broken down further to determine losses and efficiencies. Besides a basic calf count and then a weaned calf count, Bevers suggests adding a record of the number of calves born live and dead.
“Not everyone can get this number, but it’s important because if you are trying to determine where loss is occurring, it identifies it more accurately,” explains Bevers. “We know the bull worked, the female was bred and carried the calf full term, but then something happened.” When a producer begins to problem solve, they have more of a starting point when the calf inventory record is improved. By having that additional calf inventory number, Bevers says, the overall inventory record becomes more accurate and so does the analysis.
Improved financial records
The basic financial records needed for SPA are a beginning balance sheet starting Jan. 1, a 12-month income statement and an ending balance sheet ending Dec. 31. From these records, the SPA can determine a return on assets and cost per breeding female. However, improved financial records equip producers with a better understanding of their bottom dollar.
“Where it gets complicated is that the SPA analysis in itself is just a cow-calf analysis,” he explains. “So, if someone is running yearling cattle in addition to their cows, the SPA analysis just wants to look at the cow cost.”
Therefore, he suggests improving financial records by earmarking funds based on their use. Excluding expenses and revenues from other sources, whether it be yearlings or a wildlife enterprise, improves the financial record to determine a more accurate picture of the cow-calf operation.
“It is important to get into the details even if it gets complicated,” says Bevers. “We want to drill down so we can actually have some useable information for the analysis.”
Taking the time
Improving records or even starting records can seem daunting. Getting a record-keeping system established takes time. Bevers encourages producers to start where they are now, even if it isn’t ideal or where they want to be. Consistency is the key with record keeping.
Records give producers the opportunity to be on the offense instead of the defense in the cattle business. Instead of letting a volatile industry dictate decisions, a producer can use records and analysis tools like SPA to make decisions.
“Producers are better prepared to make decisions with improved records,” Bevers says. “A cow can only give you so much. The externalities producers are faced with are challenging when we think about the future. So, we better be professional ranch managers and that starts with having a good idea of where your ranch is with good record keeping and analysis.”
More Records is excerpted from the June 2019 issue of The Cattleman magazine. Join today to start your subscription.
Please take a second to visit our Bull Buyer’s Guide and Ranch Services Guide Advertisers.