How To Manage Risk By Creating A Drought Management Plan

The two kinds of risk generally associated with drought are production risk and market risk. Production risk naturally emanates from the fact that drought limits forage production and availability, which directly limits the total productivity of the operation. Increased market risk is realized when those affected by drought act in unison and dump animals on […]

Understanding Feed Costs 

Feed costs represent the largest annual operating cost for most commercial cow-calf enterprises.   In order to maintain an optimum balance between feed costs and production, feeds must be analyzed and these analyses used to formulate rations and/or supplements, according to Rick Rasby and Jeremy Martin with the University of Nebraska-Lincoln.  Feedstuffs vary widely in nutrient […]

Important Financial Benchmarks Every Ranch Owner Should Know 

On a ranch, measuring financial benchmarks is important to give you a true picture of the financial health of your operation.   Regardless of your type of operation, you can use three standardized measures to judge your efficiency, according to the U.S. Roundtable for Sustainable Beef. They include:   Ratios: This includes measures such as the debt-to-equity […]

How to Measure Beef Cattle Benchmarks 

In addition to standard benchmarks measuring financial health, you should also keep track of specific guidelines for beef cattle operations.   These target levels, adapted from Adapted from Texas A&M AgriLife Extension and the U.S. Roundtable for Sustainable Beef, are some suggestions of what you can use. Do what’s best for your operation and financial goals.  […]

How to Determine Your Farm Business Goals & Objectives  

The information you collect on farm efficiency and yield will only benefit your operation if you have a destination in mind.   You want to know that you’re making progress toward your goals. Consider your overall mission, objectives, goals and checkpoints.   This exercise seems obvious, but it will force you to examine short-term and long-term objectives […]

How to Determine the Health of Your Farm Operation 

How is your operation doing?   This Farm Financial Scorecard of ratios and Key Performance Indicators (KPIs) to measure your operation’s financial health from the Farm Financial Standards Council can help you understand the current health of your farm operation.   Select two measures for each category. Then calculate and determine if your measure indicates whether your […]

How to Create an Income Statement For Your Farm 

An income statement shows the revenue and expenses of your operation over the course of a year.   The difference in revenue and expenses is the net farm income. Use this template, adapted from Northwest Farm Credit Services and the U.S. Roundtable for Sustainable Beef, to track these items for the year.   Your income statement is […]

How to Create a Cash Flow Statement For Your Farm 

A series of cash flow statements will allow you to see or project your ability to meet cash payment obligations.   It can also show you when you might have excess cash available to pay ahead on existing liabilities.   Cash flow statements can be completed on intervals tailored for the operation such as monthly or quarterly. […]

How to Create a Balance Sheet For Your Farm 

Your balance sheet is a snapshot of what your farm looks like today.   At a current point in time, a balance sheet will show you what you own and what you owe.   Below is a downloadable balance sheet from Northwest Farm Credit Services, Noble Research Institute LLC, and the U.S. Roundtable for Sustainable Beef, that […]

Are You Running a Marginal Farm Business? 

There are plenty of worthy ideas floating around about ways to improve the economics of the cattle business, and it’s hard to choose which one is most important. According to the National Grazing Lands Coalition, the business of understanding the concept of margin is critically important to improving our economic outcome. The formula really is […]