RECORD KEEPING DOES NOT HAVE TO BE HARD

by: Clifford Mitchell

Homework is a part of life most thought would go away after the education process. Hours of learning sophisticated formulas, group sessions where certain scenarios played out or programs simulating the problems or success stories where entities could be successful or not often came with that out clause or limiter that could skew what would happen in the real world. Those looking for the easy way out could find the loopholes and sometimes get rewarded.

As calf prices increase and more volatility comes to the input side of beef production, completing the task is more important than ever and some of the loopholes or shortcuts no longer exist when it comes to profitable beef production. For many years the market has been giving operators subtle hints to do your homework, be prepared when it comes time to evaluate the operation.

The rebellious nature of most cattlemen will point to Uncle Sam for dictating a certain depth of record keeping with no reward. The market system or making easier production decisions will speak to the rancher with a different voice of understanding, reinforcing the idea that doing homework is the path to success and will come with a financial reward.

“Most operations have records for tax purposes, it depends on if they can justify going above and beyond that to use information to influence management decisions. With the value of animals now, a producer wouldn't have to have very many to justify a detailed record keeping system,” says Dr. Larry Falconer, Extension Economist, Texas AgriLife Extension, Corpus Christi, Texas.

“Most producers keep records for tax purpose, not management decisions. Management and marketing decisions require more specific records. Operators need to know costs and revenue and break that down into different enterprises,” says Dr. Curt Lacy, Extension Economist, University of Georgia.

Cattlemen, for the most part, are really good at their job. Getting live calves, giving vaccinations, knowing good genetics and getting cows bred back is part of their DNA because most are doing just what they were born to do. Cost analysis and other economic functions directly related to profitability often fall by the way side because operators are spending a lot of time doing a good job raising beef.

“Often times, ranchers don't know where they're at. Records help track each expense or revenue every step of the way. With calf prices and volatility in the cost of production today, each incremental improvement to the bottom line can help,” says Terrell Miller, Cattlesoft, College Station, Texas.

Deciding how sophisticated the record keeping system needs to be depends on the ultimate goals of the operation. Tailoring the record keeping system to management style is no different than deciding when to calve or how long bulls are turned out; these things bring value to the operation.

“Ranchers are making a fairly sizeable investment. Records help a lot in planning and control. Things like liquidity, solvency and profitability all come into play because management is a dynamic process and we need information to make decisions,” Falconer says. “We can do a better job of planning if we know where we start and what the goals are for the operation.”

“How you are going to market the calf crop will probably dictate the level of sophistication of the record keeping system for most operations, but we have to generate information to make decisions,” Lacy says. “Long term goals will drive record keeping and marketing decisions.”

Gathering data or record keeping is a dirty word for most commercial operators. The time consuming process seems burdensome, but for some operators a mental block exists because relevant data already exists.

“The interesting thing with records is, most producers already have the information, the challenge is getting it in one place,” Miller says. “Getting records into the computer or utilizing information on a daily or weekly basis has been hard for producers to grasp. Once they start, it's a hard habit to break.”

“Most producers make record keeping harder than it is,” Lacy says. “It is a boring process, but has to be done and the best way to do it is as you go, maybe not on a daily basis, but at least every week.”

Tools to ease the burden of gathering data are available to most producers. Whether an operator is high tech or prefers a simple system, information gathering can be as sophisticated as the producer's comfort level will allow.

“It doesn't have to be a real extensive computer record keeping system. A log of things that you do from a management standpoint is good information,” Lacy says. “Some of the best records I see are in a spiral notebook. Data like when you calve, castrate and give vaccinations is a really good start. There are calendars available where you can write down management in a timely fashion. Most everyone is familiar with a calendar. There is a lot of help out there with computer programs or spreadsheets if a producer wants to get more specific with the record keeping system.”

“There are tools that will help organize data. Producers have to get into the habit of recording it,” Falconer says. “There are computer programs that will generate individual records at a relatively low cost. The extension office has spread sheets available to help producers with the record keeping system.”

“Producers have records on Copenhagen cans or feed sacks that come from the daily grind. If the producer has an I-phone (you would be surprised at how many do) or another device with a web browser, they can access our software,” Miller says. “In some cases, a producer can record a calving date, sex and ear tag into our system easier than writing it down.”

Once producers master the task of gathering the data, is when some operations will really see the system pay for itself. The value of record keeping starts with gathering the information and organizing it.

“The frustrating part about records is producers can spend a lot of time trying to get information and can't find it in their system. Papers end up in filing cabinets and a spreadsheet shows up as an electronic file. Either way these systems make it hard to generate reports,” Miller says. “With a computer program, it's easy to generate reports and the value in your data comes from generating reports.”

“As producers get data organized, the payoff is using the information. Gathering the data, going through it and using it to support making decisions,” Falconer says. “There comes a point if you're gathering this information and not using it as a management tool, it's worthless.”

Projecting future costs and revenues could be another function of accurate records. Tools of the trade sometimes dictate budgeting for the yearly expenses and trying to handle what “Mother Nature” and the market have to say about the business model.

“Good records help utilize budgeting tools. Can we purchase that cow or heifer to rebuild? Models estimate productivity and salvage value just like we would for a machine,” Falconer says. “There is enough uncertainty in these decisions to begin with, we have to have an idea on lifetime performance and we need records to estimate this. We get radical changes with even small changes in productivity.”

“Knowing how many tons of feed or bales of hay are fed annually goes a long way to budgeting for something like feed and fertilizer,” Lacy says. “Use this information to make decisions. What does it cost to bale one acre of hay? High calf prices may not always be here. It's really important to have information.”

Utilizing the information gathered could benchmark the herd. For instance, certain health or reproductive problems could go undetected without accurate records. Daily questions about raising practice and credibility could also come into play in the near future as the beef industry continues to fight to preserve its way of life.

“Our program can generate numbers or historical data that can help isolate problems when they occur,” Miller says. “You can identify at what point in the process you started having trouble. Was it because of management, nutrition or herd health? You're always one step in front with this information.”

“If you're direct marketing freezer beef, keep some basic records. It's something your customers want to know and brings credibility,” Lacy says. “It's very important to have information to dispute false claims by our enemies. Accurate records from producers will help stop those people who want to eliminate things we use in modern agriculture production.”

Record keeping is one of the more humbling jobs in the beef business. Kind of like a lineman for a star quarterback, record keeping or gathering information helps protect the interests of the operation, but it's difficult to assess an overall value. Whether group data or individual records fit the operation, some sort of system whether it starts with a Big Chief tablet or a Smart phone, doing your homework will stamp its value on the bottom line.

“Our system is a production based program and we can generate group or individual data. We provide historicals for the operation that can be used with spread sheets from the extension office that are very good at predictions,” Miller says. “If you make the right decision just on one time, with today's prices, it's pretty easy to see the value good records have to the operation.”

“Producers have to go above and beyond gathering data for tax purposes only. Even something as simple as an accurate inventory every month will help the bottom line,” Falconer says. “Sharing information about your cattle is potentially worth a lot of money to calf buyers and can help get better prices, but you can't share that information if you don't have it.”

“If you keep records you should be able to supply the information that a buyer wants, but the buyers have to tell you what they need. Records are a package deal,” Lacy says. “The farther you own the calf crop down the marketing chain, the more valuable the information is.”







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