Every day, no matter who we are, we make decisions. We make a decision about what time to get up in the morning and what time to go to sleep. We decide what to eat for breakfast, whether or not to feed the livestock, do we go to work or go fishing, do we cut the hay or turn the bulls in with the cows, and I could go on and on. Each decision we make has a series of consequences that result from that decision. Even the decision to do nothing has some type of result. I would like each of you to take a hard look at the decisions you are making. Is there a reason you are you doing XYZ or is that the way it has always been done? Do you know the actual cost or benefit of doing XYZ? Is there a better way to do XYZ? Do you absolutely love doing XYZ?
Sometimes I think, that as land and livestock managers we get bogged down in the rut of doing what we’ve always done. We forget to look at the bigger picture. We forget that change can be enlightening and refreshing. We get stuck in the everyday operation that is keeping the livestock alive and healthy, and the land producing grass. We have been brought up to work hard for everything we want, and there is comfort in knowing that if we work hard we will be blessed. However hard work, while satisfying, may not always be profitable.
I would like to challenge you to also analyze whether or not you are actually making money doing XYZ. Maybe this year you are, but is that the norm? One way to do this is through a Unit Cost of Production Analysis for each enterprise in your operation. This powerful tool can help you see where you are doing well in your business and where you may need to make improvements or changes. It is not an easy analysis. Math will be involved and it may take some time for the process to be fully learned. Won’t it be worth it to spend some time learning to fully understand where your operation is succeeding and where it may need improving? I certainly think so. And just think, if you hate doing XYZ and it is not making you any profit, maybe you can figure out a way to not do XYZ, which will give you more time to do what you really love.
It all comes down to decisions and it may be time to answer the question: Are we making the correct ones for ourselves and our operation?
Check out this video series by colleagues Dallas Mount and Aaron Berger on how to calculate a unit cost of production. Still have questions? Contact your local Extension Office for assistance.