Ranches are complex businesses. Focusing too much on one aspect can leave the rest of the operation stuck in the mud.
Greatness in our society is usually achieved by those with a single-minded focus and dedication toward a singular goal. Olympic champions, scientific breakthroughs, and great businesses are usually created by passionate people with a single-minded focus.
The same can be said for success in agriculture. It is a special challenge in agriculture, though, when one considers how many different areas we are supposed to be experts in. The reality is that nobody can be an expert in all things. We rely heavily on others for our herd health and nutritional programs, because we simply don’t have that kind of expertise.
In fact, for nearly every aspect of our management program, we find ourselves relying on the expertise of those individuals who have focused on specific areas. That’s because the level of expertise required in every area seems to be growing exponentially.
We are in the age of specialization; generalists are rarely valued and the ultimate objective of marketing can largely be boiled down to one word – differentiation. So it is understandable that most operations find their unique advantage and focus on it.
However, regardless of what area of management you select, it is not easy to find those who have become exceptional in that area and have become quite successful by focusing on that area. I hear producers talking about 30% or 33% gains in efficiency and profitability. Those are huge numbers and it is not surprising when someone develops a single-minded focus to achieve those results, whether it be financial management, becoming a low-cost producer, range/grass management, genetics, marketing, or anyplace else. Tremendous opportunities exist to revolutionize the profitability of an operation by fine-tuning a specific area of production.
Yet, we should also be aware of the dangers or pitfalls of developing too much of a single-minded focus in any of these areas. Low-cost producers can actually get so focused on reducing costs that they reduce profits as well; there is a major difference between reducing costs and simply reducing outlays.
Neglecting nutrition or health requirements can also greatly reduce profitability. We love genetics, and we have seen the phenomenal gains in profitability that accompanies genetic improvement. Exploding cost structures and increased prices have doubled and sometimes tripled the value of genetic improvement, but we have been guilty from time to time of focusing too much on genetics because that is our expertise and that is the area where we have seen and documented revolutionary improvement.
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How many times have you seen an operation that has outstanding genetics, but an inappropriate cost structure or terrible marketing plan that caused it to fail to capitalize on its genetics? I was talking to another cattleman I really respect who has been implementing improved range management and grazing systems and is beginning to see significant improvements. They were also making changes to their herd health, marketing and genetic programs.
What surprised me was that in this pursuit, they were sacrificing in several other areas. A lot of the positives they were gaining from their grass management were eventually going to be cancelled out by their neglect in the other areas. Fortunately, they had seen the light, and were continuing to make improvement in other areas while emphasizing the grass side.
However, I think they are somewhat of an anomaly in that it is not uncommon for one to entirely neglect one or more components of their management as they passionately pursue another.
Balance has never been as “sexy” as extremism; optimization never as fun as maximization.“Optimum” genetics are rarely the best genetics for the packing plant, nor does it maximize profitability for the cow/calf operation if they are viewed separately. Today we are seeing producers pursue genetics and at times take a lackadaisical approach to costs; we are seeing producers emphasize grazing and use terribly ill-advised health or genetic programs. Going forward 20 years in one area shouldn’t mean going back 15 years in another.
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