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Common traits of successful ranches

Progressive Cattleman Editor Cassidy Woolsey Published on 19 May 2017
ranchers on horses

While some producers struggle to stay afloat in what seems to be an unprofitable business, there are plenty of ranches defying the odds.

At the Texas and Southwestern Cattle Raisers Convention held earlier this year, Rick Machen of the King Ranch Institute for Ranch Management outlined what he believes to be the key components of successful ranches. Although many others have addressed this topic, his intent was to “package the idea a little differently.”

The term “successful” can be defined as: accomplishing an aim or purpose, and having achieved profit or distinction. Machen also contended “success in the ranching industry is keeping the land and associated resources in some form of production agriculture.” Or, as Machen quoted from a friend, “Success is keeping the ranch in the family and the family in the ranch.”

But how do you do that?

According to Machen, there is really only one trait that makes a successful ranch – and that is stewardship. The people who own or manage successful ranches are stewards or caretakers of the resources entrusted to them. But within that trait, Machen said, is five components that must be stewarded for long-term success.

They are as follows:

1. People

“Ranches don’t run themselves by themselves,” Machen quipped. Whether these people are raised on the ranch or are hired from the outside, the commonality in successful ranches is you have to have people of integrity, a strong work ethic, and they have to be confident, competent and motivated in what they are doing, he said.

Agriculture is not an easy profession – you know that. The work environment is often adverse, the hours long and the profit margins are often slim. Without people with a passion for the industry, it is difficult to make it go.

“It’s easy to be passionate about ranching when the grass is green, the calves are slick or you’re trailing them on horseback, but how easy is it to be passionate about ranching when you have some of the travesties that have affected folks in the [Texas] Panhandle, Kansas and Oklahoma in the last few [months]?” Machen asked regarding the Starbuck fire that burned close to a million acres and killed several thousand cattle. “Those folks have demonstrated what true passion is.”

2. Resources

Stewards of successful ranches know that ranching begins at the soil-water-plant interface. As Machen noted, “Ranchers are actually grass farmers that chose to harvest their crop with livestock and wildlife.” The successful ones work hard in things like grazing management to preserve the soil surface and capture as much rainfall as possible.

“If it rained like it was supposed to, anybody could ranch in places like far west Texas,” Machen said. “We get good years and bad years, and good stewards realize they can’t control how much they get but they can control how much they keep.”

He pointed out that successful ranchers have a grazing plan. Whether it’s continuous grazing or a 100-paddock system, they have a plan that matches the productivity of their livestock, land and wildlife. Successful ranchers also continually work to combat invasive species, and becoming more important today, they look for ways to diversify their operation.

3. Finances

Inevitably, it all comes down to profit. Ranchers that do not generate long-term profit diminish their equity and resource base, and eventually cease to be successful (without off-ranch income). The successful ones watch their bottom line, spend wisely, invest cautiously and save when possible. They also pay attention to numbers and track those numbers for long-term planning.

As an example, Machen talked about weaning weights. He said, “We all like to talk about our weaning weights at the coffee shop or co-op. We say, ‘Oh, I weaned my steer calves at 685; heifers weighed 635.’ Well, that’s all fine and dandy, but what if the weaned calf crop was 70 percent? Or, what if it cost you more to raise those big, strapping, fat steers than what they were actually worth?”

To add to that, Machen asked attendees where ranchers typically spend money – feed and hay, labor and depreciation. The successful ranchers minimize fed-feed costs; they select for easy-calving and easy-keeping females to reduce labor; and they expect and plan for the tough times – just to name a few.

Quoting another cattleman, Machen said, “Never buy what you can lease. Never lease what you can borrow.” Successful ranches limit their purchases to what they absolutely need for the business. He said the excessive purchase of tools, equipment or facilities, otherwise known as “hardware disease,” has been the undoing of too many ranches.

4. Customers

According to Machen, successful businesses focus and continually refocus on the customer. Whether your customer is an order buyer, a stocker operator, a feedyard or packing plant, ultimately all of your customers are the consumer. But the consumer’s expectations have changed appreciably over the past two decades.

During the post-World War II era, Machen explained the consumer was most concerned about affordability. Today, however, they are concerned about who produced it, where it was produced, how it was produced, and was that operation environmentally sustainable.

Machen said, “Our consumers have different questions, yet they have the same expectations of our product – that it’s safe, that it’s wholesome, that it’s tasty, that it’s tender, juicy and flavorful. The successful ranchers never lose sight of their customers, their concerns, and their customer’s demands.”

5. People

Coming full circle, Machen returned to the first component of successful ranches – people. He said, “Ranches in and of themselves cannot, will not be successful without people that have a mind, vision and passion for management. They think ahead; they address the ‘here and now,’ but they are always looking out there in front.”

One of the things he believes is so prevalent in successful ranches is they have done a good job of cultivating leadership to come behind the current generation of management. He discussed the importance of generational transfer and involving kids at a young age. “If we wait until they are 14 years old to let them be involved, we’ve lost them,” he said.

In other words, successful ranches foster an environment where successful people raise and mentor their successors, Machen said. Success doesn’t come by default, but rather through people passionate to “keep the ranch in the family and the family in the ranch.”  end mark

Cassidy Woolsey
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PHOTO: Ranches succeed when people exhibit a strong work ethic, integrity, motivation and a passion for the land and animals. Staff photo.

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